The following study is part of an Arts in the Age of Covid research team project. This study is compiled from the research conducted and summaries articulated by Clara Pérez Alfaro and is being published as a three-part series. This case study about La Liga is part 2 of 3. Read part 1 for an introduction to the research and part 3 for a case study about the NBA.
Overview
As arts organizations look to provide digital experiences to engage audiences, there are lessons to be learned from sports leagues that have restarted seasons and successfully broadcast them to international audiences amidst the Covid-19 pandemic. One example is La Liga. The Spanish league most commonly known as La Liga is one of Europe’s top five soccer leagues. The tournament features 20 teams that play two games against each other, totalling 38 games per team per season. Each win is worth three points, a tie is worth one, and a loss does not add points. At the end of the season, the team with most accumulated points is crowned champion. Traditionally, the season runs from August through May and is crossed by other other competitive tournaments in which La Liga teams participate, such as the UEFA Champions League and the Copa del Rey.
Although La Liga is based in Spain, it has massive outreach around the world. In 2016, the league announced that it would reach over 170 countries in the 2016-2017 season (La Liga, 2016). According to Javier Tebas, La Liga president, the league is stronger in Latin America and comes in second place to its British counterpart in the Asian and Southeast Asian markets. La Liga has nine physical offices around that world and over 40 international delegates, showing the league’s commitment to reaching an international audience (Güemes, 2018).
The league’s effort to expand its international viewership is supported not only by the league’s ambitions to reach other countries, but also by the talent they showcase in each game. Out of the last six UEFA Champions League competitions—the most competitive in Europe, which feature teams from across the region—La Liga teams have won five. Real Madrid and FC Barcelona, both part of La Liga, are constantly recognized as the best teams in the world, with Atletico Madrid occasionally making the list. Additionally, the league showcases Lionel Messi in FC Barcelona -one of the best soccer players in the world - and up until two years ago had Cristiano Ronaldo playing in Real Madrid. Together, both players total 11 Ballon D’Ors, the most recognized accomplishment in the field.
The 2019-2020 season kicked off on August 16, 2019 and was set to go until May 2020. As normal, teams were scheduled to play in their stadiums with a live audience and generate matchday revenues. However, as the world—and Spain specifically—saw the rapid growth of Covid-19, the league was temporarily suspended for two weeks. As the virus progressed and the crisis escalated into a pandemic, the league was indefinitely suspended on March 23 (RFEF, 2020).
The suspension of La Liga came with an enormous negative economic impact for Spain. The league itself accounts for 1.37% of the country’s GDP and is responsible for the creation of approximately 180,000 jobs (Straus, 2020). Although several loans and credit lines were made available for Spanish clubs to survive the crisis, and some player cohorts even took salary cuts, the impact of a season cancellation for the national economy would have been substantial (Agini, 2020). Due to this, the Spanish government and La Liga have worked together to find the safest way to restart the league.
On May 23, Javier Tebas, La Liga president, announced that the league would resume on June 11 after almost three months of suspension. La Liga, with the campaign entitled #BackToWin, was the second major European league to resume, following the German Bundesliga. All team and staff members were required to follow strict safety protocols to ensure the wellbeing of those involved. Additionally, all games were played behind closed doors to follow social distancing guidelines. Although the league was successfully completed on July 19, Tebas believes that it will take at least two seasons before soccer in Spain to returns to normal (Agini, 2020).
Image 1: The #BackToWin Campaign was featured on cities around the world to promote the return of La Liga. Source: SportsBusiness.
Revenue
La Liga is the second highest revenue-generating league in the European soccer market, second to the English Premier League and followed by the German Bundesliga (Ajadi et al., 2020). According to Deloitte’s Annual Review of Football Finance report, 86% of the revenues from the “big five” European leagues come from broadcast and commercial revenue streams. The remaining 14% come from matchday revenue streams, including ticketing, vendors and other matchday channels.
During the 2018-2019 season, La Liga saw a strong growth in revenues driven by the commercial powerhouse of Real Madrid and FC Barcelona. This amounted to a 10% increase, approximately €300 million (Ajadi et al., 2020). It was previously anticipated that the 2019-2020 season would bring an additional 20% increase in the value of La Liga’s domestic and international broadcasting rights (Ajadi et al., 2020). Before the Covid-19 pandemic, these predictions showed great promise for the league to continue growing and expanding its reach. Additionally, the top clubs from the league grew commercial revenues by 7%, with FC Barcelona accounting for 88% of that increase (Ajadi et al., 2020).
As is the case with most sporting leagues, La Liga makes most of its revenue from the sale of distribution rights. In 2019, it was expected that the 2019-2020 season would exceed US$2.07 billion in revenues from TV income, a 10% increase from the previous year (Impey, 2019). The broadcast rights are distributed between two major partners. Telefónica won the bid in 2018 for the main broadcast package for domestic distribution at US$1.09 billion per year, while Mediapro renewed its international distribution agreement with La Liga through 2024 for a sum of US$4.98 billion (Impey, 2019).
The revenues from national and international broadcast deals are distributed between the different clubs through a system created by the Spanish government in 2015. 50% percent of the revenue is equally distributed between clubs, 25% is distributed according to performance over the past five seasons, and 25% is based on social influence, which includes income from season tickets, gate receipts and average TV audiences. (Ross, 2019).
According to a study done by KPMG, Europe’s five biggest soccer leagues were threatened to lose €4 billion if they did not resume the 2019-2020 season, which amounts to 25% of the 2017-2018 season (The Economist, 2020). Additionally, it was predicted that La Liga would face an €800 million loss if fans were kept out of stadiums (Agani, 2020). Given that the sale of broadcasting rights is one of the biggest sources of income, there was uncertainty about whether broadcasters were going to be reluctant to pay. Industry executives were worried that this changed product might not meet their expectations. (The Economist, 2020). The restart of the league did, however, ensure that money from broadcasting contracts would be collected. Still, it is clear that the Covid-19 pandemic will highly impact profitability in the 2019-2020 season as revenues fell dramatically while costs did not (Ajadi, et al., 2020).
Broadcasting
Despite growing health concerns and many unknowns about the virus, sport fans were eager for the return of live sports. Most TV networks filled their programming grids with archived content or virtual interviews to give fans and viewers original and entertaining content. However, according to a survey conducted by NextWave consultancy and ESPN, young males in the Gen Z and Millennial age range said they miss watching sports with friends and family the most during the Covid-19 pandemic. Of all participants, 38% said sports are what they miss the most, versus the 32% who miss social interaction the most (Impey, 2020). These numbers show not only the loyalty of sports fans, but also the big role sports play in people’s day-to-day lives. According to Impey, this report suggested that when live sports return, there will be a boost in the demand and viewership for live content (Impey, 2020).
As the decision to return to games was made, however, there was controversy about how leagues and networks would work together to create a unique product that would draw audiences. Fans in stadiums play a big role in making sporting events not only exciting to watch, but also marketable as a product made for entertainment. The viewer experience will be drastically different if live games are played without fans, providing an opportunity for both teams and content creators to innovate and find ways to make stadiums feel less empty (Burnes et al., 2020).
In order to bridge the gap created by the lack of fans in stadiums, La Liga focused on adding crowd noise to games. According to Phil Orlins, an ESPN production veteran, many producers, including himself, were initially baffled by the idea of adding artificial noise to a sports broadcast. The main argument was that it lacked authenticity, something essential for many sports spectators (Ourand, 2020). A study conducted by ESPN showed that nearly twice as many fans would prefer to watch televised sporting events without crowds than waiting for fans to return to stadiums. Overall, this study showed support for resuming live sports without spectators (Adler, 2020). As time went on and the first sporting events started to be aired, however, producers like Orlins realized that watching a game with no crowd noise was “disorienting” (Ourand, 2020).
Before resuming the competition, La Liga confirmed two major partnerships that would allow them to deliver a great viewer experience. The first of these partnerships was with EA Sports. The creators of the FIFA video game partnered with the league to supply producers with crowd noise. An important part of the video game is an extensive audio library that EA Sports recorded in stadiums and has been digitally adapted to be implemented in real time (Carp, 2020). La Liga provided its international broadcasters with two separate feeds: one with artificial crowd noises and the other one with the original noise that players and coaches hear in the stadium. Some broadcasters, such as beIN Sports in the United States, decided to broadcast both options to their audiences and allow them to decide which audio track they want to listen to using the secondary audio programming (SAP) options (Silverman, 2020).
The other major innovation presented by La Liga was the use of augmented reality (AR) to feature virtual fans seated in the stands. In order to do this, La Liga partnered with Vizrt, a Norweigan firm that specializes in AR (Silverman, 2020). The main goal was to “fill” empty seats and offer to-scale images of fans wearing the colors of the home team. The use of AR provides an opportunity to create a product that is as similar as what viewers already know (Corrigan, 2020). Furthermore, additional camera angles were put in place to provide tighter shots that focus on the pitch so fans will not see any empty stands. This innovation allowed the stands to transform into a canvas that could show institutional or sponsorship methods while the game is stopped (Carp, 2020).
Fans & Viewership
The innovations put forth by La Liga and broadcasters were met with mixed feelings by fans. Prior to the return of the season, a poll conducted by Morning Consult showed that over 70% of the surveyed audience was likely to prefer natural sound over the artificial crowd noise. However, after viewing an example of what both options would look like, this percentage dropped from 74% to 67%, with two out of three sports fans preferring natural game sounds. Still, the study shows that 58% of sports fans agreed that adding crowd noise helped to create a more familiar viewing experience and 50% stated that it made the game more interesting and engaging (Silverman, 2020). Overall, Morning Consult’s poll showed that although fans prefer natural sound, they respond positively to artificial crowd noises.
Figure 1: According to Morning Consult, sports fans prefer watching games with natural sound rather than artificial crowd noises. Source: Morning Consult.
When it comes to inserting virtual fans into stadiums, there has been more controversy. Before the league’s return, a Morning Consult poll showed that 13% of surveyed sports fans were in favor of adding virtual fans, while 43% opposed the technique (Silverman, 2020). Once the league resumed, many critiques came from the sense that some of the graphics produced by Vizrt were outdated (Mayo, 2020). Additionally, viewers commented that “fake audiences” looked like a mesh from Wii or the FIFA 2008 games. Although fans were excited for the return of the league overall, the computer generated images left a lot to desire for some viewers (Mayo, 2020). The main reason for this unrest was that the virtual fans were not CGI representations of individual humans, like in most up-to-date video games, but rather a static texture that acted as a blanket on the stands (Byford, 2020).
Other fans, however, argue that the effects created by Vizrt coupled with the EA Sports sound track are good enough to be convincing (Byford, 2020). The illusion of normalcy was broken from time to time, however, given that the virtual crowd only appears from the main camera angle. Shots that show players close up and some aerial shots reveal that the stadium is, in fact, empty (Byford, 2020).
It is important to point out that, from an entertainment standpoint, the return of La Liga was extremely successful. Graham Hunter, an ESPN reporter, summed up his experience with words of gratitude, and exclaimed that “we owe our sport and its people a standing ovation” (Hunter, 2020). Although there were important financial imperatives for bringing La Liga back, executives, players, and all staff took incredible risks to do this. Hunter also argues that although some fans “can't bear the idea of artificial crowd noise with [their] football from empty stadiums, the fact remains that it has been popular, it's edited in tune with the match events, and even the "fake" crowd (which admittedly disappears if the camera moves are too swift) help the viewing experience” (Hunter, 2020).
A spike in La Liga’s international viewership reflects not only the fans’ desire for the return of live sports, but also the value of the product La Liga and its broadcasters were able to create. Across Europe, there was a 56% increase in viewership. The first matchday of the restart of the league saw a 48% increase in international viewership. Some regions saw a greater increase than others. According to Nielsen Sports, viewership in Africa increased by 73% and in India increased by 72%, both territories where La Liga was looking to expand at the beginning of the season (LoRé, 2020).
Conclusion
Despite the uncertainty surrounding the coronavirus pandemic, La Liga was one of the first major sporting leagues to successfully return to play. Not only was La Liga successful regarding health and social distancing guidelines, but also with creating an appealing product that engaged fans and viewers worldwide. By partnering with EA Sports and Vizrt, La Liga was able to add crowd noises and virtual fans on stands to create a broadcasting experience that resembles “normality.” During this unprecedented situation, La Liga was able to develop a strong competitive advantage that allowed them to meet their original expansion goals, an accomplishment that the arts can learn from.
Overall, the extensive levels of viewership during the restart of the league show tremendous promise for the league and the sports broadcasting market. La Liga’s resilience and adoption of new technology also shows La Liga’s potential to keep expanding and embracing future innovations. According to Deloitte, 5G is the future of sports broadcasting. Especially in socially distant times, 5G presents the opportunity to revolutionize the requirements for camera crews since cameras can be connected and controlled through wifi, an innovation that can also be applied to the arts (Ajadi et al. 2020). The pandemic allowed La Liga to not only keep being one of the most competitive leagues in the world, but to also showcase its resilience and openness to innovation.
Resources
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