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Six teams and a place in ‘hell’: what is the cost of descending to Second?

Date: October 4, 2023 Time: 16:42:37

90 minutes can decide the future of a team. They are the fine line between rubbing shoulders with the twenty strongest entities in Spanish football or leaving the category and having to deal with a spiral, which has sometimes meant an end for historic clubs. This Sunday, La Liga Santander faces its last assault. And it does so with one of the most exciting endings on record. With the European tickets already awarded, with the exception of the Conference League, all eyes will be on the war for salvation. Up to six teams -Cádiz, Getafe, Valencia, Almería, Celta and Valladolid- will fight not to fall off the same precipice to which Elche first succumbed and then Espanyol.

Without subtracting emotion from the beautiful fight to play in a European competition, the fight to achieve permanence puts the hearts of six fans on edge, who face a last game with much more to lose than win. At a competitive level, being relegated to LaLiga SmartBank means taking a step back and saying goodbye, for at least one season, to the main competition of our football, but on an economic level, what is the impact of a relegation for a First Division club?

To calculate the economic cost of a relegation, a series of factors must be taken into account, which can vary greatly depending on the situation of each team. Here the distribution of audiovisual income plays an important role. As established by Royal Decree Law 5/2015, 90% of the money obtained from the joint exploitation of the audiovisual rights of the LaLiga competitions goes to the First Division teams, while the remaining 10% is distributed among the clubs of the silver category.

Faced with this scenario, an entity like Valencia CF, who entered after consuming the relegation. Well, in Segunda, the biggest piece of cake that was distributed last year was 9.78 million for the, then recently relegated, Real Valladolid.

In addition to the reduction in income from audiovisual rights, the drop in category brings other problems under its belt, such as the decrease in operating income from ‘ticketing’, season ticket campaigns and commercial sponsorships, which are affected by the loss of category by affecting directly into your visibility. However, the commercial impact is not so strong the first year, but is appreciated “gradually during the years that the team spends in the category,” explains Ángel Nogales, commercial manager and expert in sports sponsorships. “Once relegated, the club has to try to minimize those ‘anti-relegation’ clauses so that the team is more competitive in the new category, and that benefits both the entity and the brand,” he details.

As far as the field of play is concerned, the relegation brings a headache to the team leaders, who must try to find a balance between preventing the flight of their talents on the field and adjusting elite contracts to a salary cap much lower To better understand this difference, the salary limit that LaLiga has established this season for the overall calculation of the First Division increased to 3,022 million euros, while in the Second the accumulated total was reduced to 203 million.

A ‘descent insurance’

In order to alleviate this deficit, La Liga created the so-called compensation fund several seasons ago, through which the clubs that leave the category receive financial aid to adapt their capital to the reality of the new scenario in which they enter. This ‘relegation insurance’, which was born with the purpose of promoting the return of the entities to First Division as a boomerang, does not distribute the same money to the three descended.

As stated in Book 8 of the LaLiga General Regulations, the amounts to be received are determined by three scales: 20% of the income received in the television distribution of the last five years, 5% of the average total income of the five last seasons and 0.035% of the net income from television for each course that they have played in the competition consecutively, up to a maximum of 25 years. Thus, the program tries to reward the teams with the most income and history in the competition. To date, the team that has benefited the most from this aid is RCD Espanyol, who received close to 30 million euros after being relegated in the 19/20 season.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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