The European Super League - Controlling their own destiny
The formation of the European Super League (ESL) is real and not just a veiled threat to UEFA and the Premier League. It isn’t a manoeuvre or an act of brinkmanship. This is what the 12 clubs want or fear missing out on. It is about financial security. It is about certainty of outcome.
For the Spanish and Italian clubs, it is also about jealousy of the Premier League. The protagonists have long been frustrated with how the big revenue generating clubs fail to receive a bigger share of revenue from UEFA and control over commercial rights. This is a gripe long held by the likes of Real Madrid, Barcelona, Manchester United and Liverpool. Arguably, this is the main motivation of the 12 – to escape the power levers of UEFA and control their own destiny. The impact of the pandemic, the appeal of controlling their commercial rights and building a Netflix style broadcasting structure has created the perfect storm. Here’s a scenario -Liverpool FC has a fan base of over 80 million, if each fan pays a subscription of £2 per match of which the club receive 100%, they can generate £160m per match. The numbers are astronomical.
To defend these clubs, yes, I will attempt it, we have underestimated just how big these clubs (brands) are in terms of the globalisation of the sport. Many were bought as a business and they act like a business… Why pay rent on an apartment when you can just build and sell your own apartment complex and not pay rent? Is this not just acting financially responsible if resources permit? One noted ‘benefit’ in the ESL’s ‘constitution’ is the opportunity to achieve an equal playing field within the league. This has proven almost impossible across Europe’s domestic leagues. ESL club spending on transfers and salaries has a cap of 55% of income. This is an attempt to curb failures in the Financial Fair Play model as all clubs would receive the same consistent risk-free income stream. This means they can control their costs. Other sports such as Formula 1 has introduced similar spending caps to nurture a level playing field.
Football clubs are social and cultural institutions, but the plot of this story is money. If regulators had stepped in a decade ago and implemented a spending cap in the Premier League, there would have been dissent. The problem is the regulators e.g. UEFA & The FA are part of the product. They are competition organisers and want the best teams playing in them. They were more than happy riding the gravy train of the growth of ESL clubs but this now compromises their position. Let’s not forget, if platforms such as social media existed in 1992, there would have been similar uproar about the formation of the Premier League, the role of the FA and the negative impact it had on the English Football League.
The main issue with the ESL lies with the ‘closed shop’ nature of the format. If allowances are made to enable qualifying via domestic leagues, then it will become more palatable. Yet, it still fails to address the main flaw – the removal of possible peril and jeopardy for the founding clubs if participation is guaranteed. This goes to the heart of the integrity of the sport and is something fans value. The impact on domestic leagues will be stark, and significantly for the Premier League, La Liga and Serie A – quantifiable. Will broadcasters be willing to offer such lucrative broadcasting deals if the product is largely redundant or diminished? Why would they provide the billions they do now if a large proportion of the matches played do not matter? ESL clubs could finish 10th in their domestic league and the implications for them will be negligible.
The snowballing of this scenario is significant. Less money at the elite level means less money through the football pyramid. This gets to the crux of the problem – the motivations of the ESL club owners. Many of them will wonder why it is their responsibility to look after everyone else. Do we take their promises of wealth distribution through the pyramid at face value?
The main priority of ESL club owners is safeguarding their investment and reaching new markets - ruthless but expected. Juventus and Manchester United are floated on the Stock Exchange. They have obligations to shareholders rather than the football community and the failure of regulation in elite football has compounded the issue. Such mechanisms as the 50+1 governance model in German football has made Bayern Munich and Borussia Dortmund think twice and ultimately reject the ESL proposal – a model to protect the interest of fans. The ironic aspect of the ESL is it reduces the likelihood of its clubs being successful in Europe – you know, winning trophies. But is that something these owners value anymore?
Senior Lecturer and Course Leader in Sport Business Management. Neill's academic and professional background lies within the business of sport. Prior to pursuing a career in academia Neill worked in a number of roles including national governing bodies.