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European Super League: A case of greed, or brinkmanship?

Twelve of the wealthiest clubs in world football have announced the creation of a new breakaway league. Is this the death of football as we know it?

Liverpool and Real Madrid are among 12 European clubs to announce a breakaway Super League.
Liverpool and Real Madrid are among 12 European clubs to announce a breakaway Super League. (Getty Images)

On the night of 18 April, 12 of the wealthiest football clubs in the world, all from Europe, announced the formation of a new breakaway league with a statement. “Twelve of Europe’s leading football clubs have today come together to announce they have agreed to establish a new mid-week competition, the Super League, governed by its founding clubs,” it read. “AC Milan, Arsenal FC, Atlético de Madrid, Chelsea FC, FC Barcelona, FC Internazionale Milano, Juventus FC, Liverpool FC, Manchester City, Manchester United, Real Madrid CF and Tottenham Hotspur have all joined as founding clubs. It is anticipated that a further three clubs will join ahead of the inaugural season, which is intended to commence as soon as practicable.” Of the continental powerhouses, Germany’s Bayern Munich and Borussia Dortmund, and France’s Paris Saint-Germain have so far refused to join the Super League. The Super League aims to have 15 permanent clubs in the tournament.

On the face of it, the announcement on the night was as innocuous as it was earth-shattering. Innocuous, because it has become fairly common for new tournaments and mini-leagues to crop every year under the auspices of UEFA and FIFA (the international bodies that govern European and world football respectively). The crowded football calendar in Europe has become a bit of a joke. The statement was earth-shattering because the Super League—a closed group of mega-rich clubs overseeing their own private tournament—is potentially the most destabilising event that has modern football has ever faced.

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For starters, it completely dispenses with the idea of merit in sport. Unlike normal football leagues, there will be no relegation or promotion: the 12 clubs are guaranteed their place in the tournament every year. It will undercut the UEFA Champions League, Europe’s premier club tournament. Probably the world’s most popular football tournament after the World Cup, the Champions League comprises the top ranked teams from Europe’s domestic leagues. Qualification for the tournament is based on the clubs’ domestic league standings, and, therefore, based on merit. By devaluing the Champions League and the promise of additional revenue and status that comes with qualifying for that tournament, the Super League also takes away one major rationale for domestic leagues. If there’s no financial point to qualifying for the Champions League, because the wealthiest and the most globally popular clubs are cornering all the lucrative TV money, then where is the motivation for a Leicester City (in England) or an Atalanta (in Italy) to compete? The Super League plans to allow five clubs from outside the permanent elite to qualify for the tournament annually, based on their achievements in the past year.

The 12 clubs that have announced a breakaway Super League.
The 12 clubs that have announced a breakaway Super League.

The new competition also does away with any semblance of independent regulation, because the clubs will also govern the tournament. Real Madrid’s president, Florentino Pérez will be the chairman of the league, and the vice-chairmen will be Joel Glazer of the American Glazer family that owns Manchester United, and the Italian businessman and chairman of Juventus, Andrea Agnelli.

It was revealed that the tournament will be financed by the investment firm JP Morgan. The Super League statement says, “Founding clubs will receive an amount of €3.5bn solely to support their infrastructure investment plans and to offset the impact of the Covid pandemic.” The breakaway league also predicts that the founding clubs will generate over €10 billion in “solidarity payments” over time which will “provide significantly greater economic growth and support for European football”.

Fans of the 12 clubs are protesting against the decision taken by the owners.
Fans of the 12 clubs are protesting against the decision taken by the owners. (REUTERS)

Despite their revenues, the elite clubs of Europe are struggling in the aftermath of the economic devastation brought about by the covid-19 pandemic. 11 of the 12 clubs posted combined losses of £1.2 billion for 2019/20 before player sales (Liverpool hasn’t published its accounts). The losses will likely be higher for 2020-21 since only the final three months of the previous financial year was affected by the pandemic. Reckless financial mismanagement has also left many of these super clubs with debilitating debts. For example, according to KPMG Football Benchmark, Tottenham Hotspur has a net financial debt of £591.8m (as per June 2020). Manchester United has a debt of £452.7m, while Barcelona has a debt of £274.2m. A Super League windfall would give them all some breathing space; a financial sleight of hand which the clubs hope will make their worries disappear.

The greed of the clubs is centered on TV money. With the pandemic continuing, club revenues have shifted entirely to that earned from broadcast deals. The Super League is indicating that with a dedicated global fanbase, these 12 clubs could earn more from global TV revenues than from hometown fans watching matches in their stadiums. The Super League calls the latter “legacy fans” and are more interested in the growth in the number of potential global fans. After all, the logic runs, a Manchester United fan in China or India would rather watch the club play Barcelona than Burnley; maximum spectacle yielding maximum revenue.

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A study published in November last year revealed that more TV viewers watched Liverpool and Manchester United play each other than any other matches in the Premier League between 2013-2019. A league clash between the two giants on 17 January broke Sky Sports’s paywalled viewership records, pulling in an average of 4.5 million viewers. The owners of Liverpool, Manchester United and the other ten clubs feel that they should, therefore, get a greater share of the TV revenue pie. And if global audiences can watch Juventus play Real Madrid every week, thus maximising TV revenue for the clubs, then why bother with competitive leagues? Instead, the Super League plans to distribute its largesse to the rest of the “football pyramid” by way of handouts, as long as the elite clubs are allowed to reign unchecked. It’s a cash grab of epic proportions.

The owners and chairmen of the 12 clubs that have formed the breakaway Super League.
The owners and chairmen of the 12 clubs that have formed the breakaway Super League. (AFP)

The announcement has met with massive uproar from fans of the clubs, who feel betrayed, and from UEFA, which, despite such plans being around for 25 years, see the move as an existential crisis. Countries such as England are mulling laws to prevent the Super League from getting off the ground, while national football associations may respond with punitive action against the rebel clubs. UEFA denounced the Super League, and threatened to ban players from the 12 clubs from representing their national teams at the 2022 World Cup. Some European analysts are convinced that the Super League is an act of extreme brinkmanship, designed by the clubs to gain greater financial and other concessions from UEFA. It is unclear how this story will end, but in using the cover of the pandemic to make such an avaricious move, owners of 12 of the world’s most prestigious and storied clubs have dragged their club’s heritage into dirt.

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