Differentiation strategy at heart of La Liga's battle with the Premier League

Professor Simon Chadwick

Posted: August 24, 2018

For much of the last twenty-years, commentators have often referred to league football’s ‘Big-5’: England, Spain, Germany, Italy and France. The last decade has seen the debate narrow, to discussions about the ‘Big-3’ and now the ‘Big-2’: England’s Premier League and Spain’s La Liga.

The Big-2 battle gets played-out both on the field and off it. A glance at UEFA Champions League winners over the last decade shows how dominant Spain has been on-the-field, with seven of the last ten winners being La Liga clubs. Off-the-field, it is a different matter; for example, ten of the twenty clubs in the last Deloitte Football Money League were from the Premier League.

It is a confrontation that will continue rumbling and may even intensify, especially if La Liga’s proposal to stage games in the United States (US) comes to fruition. Players from Spain are vehemently objecting to this development, though it could be a game-changer for European football if an agreement can be reached.

In the same week as La Liga’s announcement about the US, Manchester United played a Premier League away game against Brighton and Hove Albion. As is now the norm at United matches, there was a considerable number of overseas fans in attendance. Many of them had travelled from as far afield as China, Japan and India, which was no doubt a costly undertaking (one imagines something like at least £2,000 per fan).

Yet it was an abject United performance, from a team that is reportedly in a state of disarray. For the overseas fans, whom some observers refer to as transnational fans, this will have been their only chance this season to watch their heroes play in a stadium (as opposed to on television in the middle of the night, in Beijing or Tokyo). For European clubs operating on the basis of one-shot engagement opportunities like this, failure is not an option.

All of which provides an insight into La Liga’s desire to take some of its league games overseas. In terms of fan engagement and overseas development, the intention is to take football to the fans rather than expecting fans to come to the football. The Premier League itself has pondered such a development too, with its ‘39th game’ proposal still simmering gently in the background.

Otherwise, the International Champions Cup, and the likes of the Supercoppa Italiana, which this year was staged in Riyadh, Saudi Arabia, signal where football’s global future is heading. However, there is something more substantial about La Liga’s proposals than simply playing games in a US market where there is a large Hispanic population. Indeed, Spanish football’s governing body has introduced several other important measures.

For instance, although one might see it as a relatively minor scheduling change, the kick-off times of some La Liga games have recently been brought forward to Saturday lunchtimes (from traditionally later slots in the day, on both Saturdays and Sundays). The essence of this move has been to make it easier for Asian television audiences to engage with Spanish football. After all, 1pm in Madrid is a primetime TV slot in Beijing and Shanghai.

La Liga is determined to go head-to-head with the Premier League in its off-the-field battle, and is desperately keen to clawback market territory from its English rival. Even the most cursory glance of speeches made by senior La Liga officials reveal the kind of aggressive bullishness one would normally associate with Atletico Madrid’s Diego Costa. As such, one might argue that aside from Brexit, La Liga is currently the biggest competitive threat facing the Premier League.

This not only raises issues of how the Premier League responds to the threat, but also of how La Liga continues to attack. In this context, it is worth contemplating Michael Porter’s four competitive strategy types– that is, the basis upon which organisations compete with one another. In particular, it is worth paying close attention to differentiation strategy.

Differentiation strategy can be defined as ‘the way in which an organisation seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price’.

In the Premier League’s case, collectivism rules; televised rights sales are egalitarian in nature, the revenues subsequently generated being distributed across the league in a much more progressive way than in La Liga where, by and large, Real Madrid and FC Barcelona effectively rule. In turn, the Premier League is a more competitively balanced competition, which delivers matches that have far greater uncertainty and therefore excitement.

This is a problem for La Liga, as what is essentially a duopoly is a competitive weakness compared to its English rival. Notwithstanding Spain’s moves to address this deficiency, in competitive strategy terms it does mean that La Liga officials have had to look elsewhere for points of differentiation. Taking matches Stateside and playing Saturday lunchtimes are evidence of this.

Otherwise, La Liga has been trading heavily upon the power, prestige and imagery of its constituent parts. Hence, the iconography of Real and Barca is often at the forefront of the federation’s marketing campaigns. So too of the league’s most famous players, Lionel Messi and Cristiano Ronaldo having loomed large over the last decade in La Liga’s push into overseas markets.

This was always a risky strategy, as Ronaldo’s move to Italy has proven, and may help explain why La Liga is now looking towards other avenues of overseas growth. In the Premier League’s case, there is no ‘star strategy’ hence, if Kevin de Bruyne or Mohammed Salah were to sign for an overseas club, it would be far less problematic.

Yet the Premier League faces its own challenges, not least the potential confusion and undermining effects that Brexit could bring. Furthermore, the impending departure of its Chief Executive, Richard Scudamore, may bring a period of transition during which a shrewd, skilled and assured incumbent will be needed.

It might seem like a disservice to the Germany’s Bundesliga or France’s Ligue 1 for this piece not to have considered their role in this competitive battle. However, everyone is playing the same game and needs to have a sense of strategy and direction. Rest assured though, league football is no longer simply an on-field contest; competing for big off-field wins are now just as important.

 

 

About Professor Simon Chadwick

Simon is Professor of Sports Enterprise at Salford University in Manchester (UK), where he is also a Co-Director of the Centre for Sports Business. He is also a Founding Co-Director of the China Soccer Observatory and a Senior Fellow of the China Policy Institute at the University of Nottingham (UK). He has worked in football across the world, for various organisations including companies, federations, and governments. He tweets via @Prof_Chadwick