Club news

FINANCES: THE TV CONTRACT

04 Jun 2014
The promotion to Primera means that Depor’s incomes for next season will rise to €34 million; the club still has to negotiate some issues and close the next TV contracts, one for the season 2015-16 and the other is the collective contract with la liga.

Great news for the financial situation of Deportivo; the promotion to Liga BBVA will raise the incomes ahead of the season 2014/15 to €34 million, this since the signed TV contract will report €21 million to the club. This contract with Mediapro lasts only for one more season (2014-15).

But there are some issues that need to be fixed before negotiating the future contracts; there’s a clause in the current contract with Mediapro penalizing the club with €5 million after suffering a second relegation. This clause was considered as part of the not privileged debt after the club went into administration.  The initial idea of Deportivo and Mediapro is to negotiate a one-year extension and include this clause in the agreement. Probably the amount will be rested from the money to be collected, though president Tino Fernández will try to reduce it or even eliminate its effect.

Later, for the season 2016-17, the model in Spain will change as the TV contracts will no longer be negotiated individually by the clubs, but by the LFP as a whole. Taking in mind the penetration in the Asian market the estimations are that the global income will pass from €800 million to €1,000 million per season. This amount will be distributed among the clubs, mainly the ones competing at Primera División.

It isn’t clear yet how this money will be distributed, but newspaper La Opinión A Coruña calculated that Deportivo could increase the TV income to €30 million without considering other clauses, like prizes and rewards. This new model will be on since the season 2016-17. Therefore, before using this new distribution and sealing a contract as part of the LFP, Deportivo need to negotiate a one-year contract for the season 2015-16.

It’s expected the amount for this single season can reach the €23 million. But these figures are only possible if the club is competing at Liga BBVA; so it’s highly important to clinch the permanence for the coming two seasons, especially during the campaign 2015/16, because one year later the new collective agreement will be sealed.

OTHER ISSUES
The club is also pending to close once and for all the agreement with the banks and the Treasury, a negotiation that remains open as the main creditors haven’t agreed yet how to distribute the €21 million that remain frozen. These agreements will final determine the final composition of the privileged debt and only then the club will exactly know the exact amounts that will be yearly paid to the main creditors

It’s a basic condition to know the amount of money in disposition of the club in order to build up the squad, though the club already has an estimation about it as coach Fernando Vázquez stated on Monday that Depor’s salary cap for the new season will be around the €12.5 million (for the present Segunda campaign the salary cap was around the €5.5 million)

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