I had been planning to write up something today on the plans to remake European soccer into a Super League that followed traditional American sports lines — a handful of wealthy team owners share most of the money, everyone else can go pound sand — but then the whole project crashed and burned dramatically yesterday, just two days after it was announced. Still, there are a few useful takeaways before we head to the sentencing phase:
- Sports owners love a monopoly: Defector’s Billy Haisley aptly summed up the Super League idea as being “like if the Knicks, the Lakers, the Celtics, the 76ers, the Bulls, and the Clippers found it intolerable that they were not guaranteed deep runs in the playoffs every season because other, less historically important teams have done better on the court, and so they were breaking away from the NBA playoffs to form a new postseason, called the Super Finals.” The idea here was twofold: Not just to guarantee the more famous teams a spot in the playoffs (in this case the Champions League, which isn’t exactly a playoff but is as close as European soccer gets), but also to guarantee them the TV money that goes with it, without having to share with two-bit teams from Turkey or Slovenia or what have you just because they played well. As has been noted time and again, the main difference between European soccer and American sports is that in the U.S. team owners form a cartel whereas in Europe anyone can win their way into the top leagues — assuming they can afford to pay for the best players, which most still can’t — and certain European owners looked longingly at the American model.
- This was largely driven by American owners: The chair of the abortive Super League was to be Real Madrid‘s Florentino Pérez — ironically, not even the team’s owner but the elected president of a fan-owned club — but the vice-chairs were to be Liverpool‘s John Henry, Arsenal‘s Stan Kroenke, and Manchester United‘s Joel and Avram Glazer, better known in the U.S. as owners of the Boston Red Sox, Los Angeles Rams, and Tampa Bay Buccaneers, respectively. These are billionaires who cut their teeth on the American monopoly model of sports, and they were presumably itching for the guaranteed-cut-of-profits-even-if-you-trade-your-best-player they were familiar with from back in the States.
- There’s a stadium angle, naturally: While stadiums didn’t play a direct role in the Super League fiasco, it was no doubt on some team execs’ minds: Tottenham Hotspur just spent £1 billion on a new building, Real Madrid is spending €570 million on a renovation of its stadium, and F.C. Barcelona keeps putting off plans for a €600 million redo of its own home. All of the teams were putting up their own money to pay off construction costs, because that’s typically how it works in Europe, and planned to repay it out of increased revenues. But as the Covid crisis made clear, this only works if you’re sure the revenues are going to flow, and while you can’t control the arrival of the next pandemic, if you can at least assure that you’ll get a cut of big TV money even if your team is lousy for a year or three, that’s the next best thing.
- Owners will say the craziest things when windfall profits are on the line: U.S. sports owners grubbing for stadiums have nothing on Real Madrid’s Pérez, who declared on the basis of seemingly zero evidence that “young people are no longer interested in football” because of “a lot of poor-quality games” before getting dunked on by actual young people; or the unnamed Super League exec who declared haters to be mere “legacy fans” who can’t get with the times. Spinners gonna spin, and that’s one thing that team owners across the world are good at, or think they are, anyway.
- You can screw some of the people most of the time, but you can’t screw all of the people all of the time: For an eyeblink, the Super League seemed like it might have a shot, if only because the teams involved genuinely did have star power — even if Liverpool might lose out on a Champions League spot to West Ham United this year, it still has way more international fans and thus more attractiveness to TV networks, something JPMorgan Chase no doubt had in mind when offering to bankroll the Super League. But to really plot a shakedown of this size, you need friends in high places, and the Super League teams notably failed to run their plan by either fans or political leaders, leading to even such normally stalwart supporters of private profit as U.K. prime minister Boris Johnson declaring their opposition to the plan. (It also led to massive fan protests outside stadiums, but that storm would have been easier to weather if the Super League owners had had literally anyone else on their side.) The biggest criticism of the Super League plotters wasn’t even that they were planning a greedy money grab, but that they failed to read the room before doing so: Doing an end run around political leaders and dissing your own fans as half decrepit and the rest with short attention spans is not the best way to garner support for your plan, even if you are a billionaire used to getting your own way.
tl;dr: Buncha rich dudes tried to get richer, found that even under late capitalism plutocrats can’t just walk into a bank and stuff bundles of cash in their pockets, they have to make some kind of effort to appeal to or at least buy off the democratic process. As glass-half-full news goes, I’ll take it, especially on a day for celebrating partial victories over systemic problems.
Even the post-collapse statements and apologies from individual clubs have that empty, forced feel, that “we apologize to anyone who was offended” vibe. What mattered most to them was that they got a couple of news cycles to broadcast their message and their intentions to the entire world, the overwhelmingly negative reaction to their proposals be damned.
Absent any severe punishments and other forms of deterrents, these people will absolutely try and come back with an “improved” plan again down the road
The reaction was less damaging than trying to unify the mix of owners at the top of European clubs. If they had all the big fan base clubs on board and unified, they probably would have gone forward, but it was always going to be an odd alliance. It isn’t as if they vet owners like MLB, NBA, and NFL do. Sure, part of it is to ensure they have money, but also to make sure you don’t have someone who strays too far from the next. Man City doesn’t sweat short term losses because of its money from Abu Dhabi. Chelsea’s owner is so sketchy even Deutsche Bank’s anti-money laundering department reported some of his transactions as being suspicious. Money gets lost in that process. They might have went along, but it was easy for them to get out. Milan’s owners only have them because the previous owner defaulted. The Chinese government told Inter’s owners to get out of the sports business. I doubt those groups are long haulers. They undoubtedly would have loved the increased value that came with the Super League, but they are going to be selling anyway. Barcelona and Real Madrid are fan owned. It is not as if Florentino Perez is taking dividends on annual profits. Good luck getting any German club to battle their fans when they have real power due to how ownership is structured. Strongarming UEFA is much easier than herding spoiled rich cats.
The number don’t lie. Perez is right about the huge drop in young people watching soccer.
And I think he’s right in saying a huge reason is the lack of quality games. Liverpool plays Fulham & Burnley more than they play Real & Barca. That shouldn’t be the case.
Something needs to change in Euro soccer. Maybe the ESL was the wrong idea, but they can’t keep flooding the calendar with domestic league squash matches.
Source on that “huge drop,” Ben? The only stats I can find are these, which don’t show that big a difference among young people:
https://www.statista.com/statistics/1093943/share-of-british-adults-that-watch-men-s-premier-league-football-by-frequency-and-age/
Young people are watching somewhat less live sports overall, because they can play video games themselves or watch Twitch or whatever. But that’s not going to be solved by having more Clasicos, if it’s even something that needs to be “solved” at all.
I will admit that, as a season ticket holder at a upper level European team, I watch less soccer and so do many people, because COVID has made fan presence impossible for now. Watching soccer (or any sport) without fans kind of takes away what makes big event professional sports special. When the fans are back, and I go to matches again, I’ll watch more.
Crupi had a good piece on the problems with TV viewership: https://www.sportico.com/business/media/2021/millennials-cable-sports-future-1234627516/
Big thing is the duration. There’s not a huge drop in the number of young adults who watch sports on TV. There’s a huge drop in the amount of sports they watch on TV.
And that does get solved by more Clasicos! NCAA title game held up well. PGA golf does well when Bryson is in contention. Triller Fight Club did over a million buys on PPV. F1 is up due to Hamilton vs. Verstappen. On the other hand, random LAFC vs. FC Austin matches do under 500k viewers.
Hopefully GDub is correct, and viewership will recover once fans are back. Even if it does, I just don’t think people are willing to tolerate mismatches the way they once did. It’s the same reason WWE doesn’t air squash matches like they did in the 80’s.
“Something needs to change in Euro soccer.”
“needs”?
It ain’t like any of these sports leagues are on the verge of bankruptcy.
There’s also been a lot of conflation of “debt” and “losses” in the European soccer coverage — while neither is good, debt isn’t so bad if you have enough future revenue coming in to cover the payments. Which looks like exactly what Barcelona is planning to do to manage its $1B debt, refinancing it to push out the payments until the pandemic is over and fans are paying $100 a ticket again:
https://www.espn.com/soccer/barcelona/story/4364012/laportas-barcelona-to-do-list-messi-renewalreduce-debts-and-wage-billmanage-super-league-backlash
I think many don’t know how weird soccer finance is, especially at big fan owned clubs.
Borrowed money is everywhere, and the team borrows on its assets–namely a stadium (which is useless to anyone else) and its players. But unlike a bank, which has assets that bring in cash flow, a soccer team’s assets actually cost money (in salaries). The stadium in particular is a tool for state influence (reducing taxes, “buying it back,” etc.) which the Spanish government is famous for.
So Barcelona owes nearly 400 million Euros and must cut 300 million in salaries to be somewhere around its apparent cash flow (350 million). All while maintaining a good enough team to be in the Champions League QFs to keep the 350 million cash flow and have enough team value to cover its loan profile and remain solvent. Not easy!
Even worse for the smaller teams, who have even less money and team value and sell players high to buy cheaper contracts to build more value. IF teams like Barcelona aren’t buying as many players, or paying less…this will have effects across leagues.
So I’d say it is more than restructuring loans. This won’t be easy, even when people start paying more at the box office.
Oh, it’s not easy! But the problem is more with payrolls that exceed (or at least come close to) revenues than with debt per se.
For Barça, the answer is going to have to be some combination of “sell Antoine Greizmann,” “get Messi to accept deferred payments (or just let him go entirely),” and “play Riqui Puig already, he’s cheap and good.” Which, yeah, isn’t as much fun as going out and buying all the best players in the world, but that’s not the rest of UEFA’s problem.
But if Barca and Real are broke, who buys Griezmann at his “book value”? PSG and Bayern can’t pay silly money for everyone.
Now I don’t think they are on the precipice, but on the other hand they seemed pretty ready to be mediocre to be solvent.
Oh yeah, they’ll have to take a loss on Griezmann, as will Real and Atleti with whoever they have to sell to balance their books. The pandemic economy could be great news for Sevilla and the second rank of teams behind the more famous ones, which, honestly, is that really a bad thing?
This is an idea that has been percolating for at least two decades (and longer in the minds of some). This hamfisted and embarrassing attempt should not comfort anyone. The big clubs will work on a new plan and try again.
I am against the idea in principle, but so long as the ESL members are no longer part of their domestic leagues, it really is their call. One could also make the argument that the national leagues will actually be closer and more competitive without them (and poorer, of course, but that is really what this is all about). It is not clear to me whether the avg La Liga club would be worse off without RM and FCB, but with the extra 50% of the domestic tv money that those two clubs presently split between themselves. No doubt La Liga rights fees will plummet if those two are gone. Will they plummet more than the 50% the two majors were taking anyway?
The irony is that thanks to the “market pool” calculation in UEFAs CL payouts, the big clubs from big money footballing nations already receive far more revenue from that tournament than others. It’s true that UEFA does “share” the revenue with the likes of FC Basel when they do well, but an Arsenal or Man Utd can earn more from going out in the round of 16 than a Turkish, Belgian, Dutch or Swiss club would earn from making the semi finals.
They don’t just want “their fair share” or “more”. They literally want it all. And if they ultimately leave their domestic leagues and form their own pan european league, they absolutely have the right to whatever they can suck up.
The problem is that they want to have a foot in each boat, and that won’t fly anywhere.
“No doubt La Liga rights fees will plummet if those two are gone. Will they plummet more than the 50% the two majors were taking anyway?”
As someone who subscribed to BeIN Sports solely so I could watch Barcelona, I would say yes, it will plummet at least that far.
(After watching La Liga for a few years, I would probably keep my subscription even if just to watch Eibar vs. Valencia. But I never would have gotten started without the hook of watching the big clubs, and the TV networks certainly know this.)
No matter what they think, the big clubs are not “THE LEAGUE”.
I take your point and personal experience on La Liga.
I would only note that other fans will come of age seeing Sevilla, Bilbao, Valencia or others as the big clubs (when Liverpool was winning First Div titles in the 80s, Bilbao won both La Liga and Copa del Rey). Nature abhors a vacuum, as they say.
Two years ago the PL essentially disappeared from my tv packages (I have 3 sports packs). Now that NBC is moving practically everything to SN or Peacock, PL games and even highlight shows are pretty much gone.
I did not respond by agreeing to pay more for advanced packages (or DAZN), I responded by watching other (lesser) leagues.
I’m not saying there will be no negative effects on the leagues, just that the competition overall might improve without the whales. Smaller clubs might even find transfers easier to complete with 3-6 gigantic clubs in their leagues no longer competing directly.
Just from my own perspective:
1. There are a lot of countries in Europe, and very few have a professional league with more than 2 or 3 decent teams who can compete even as a “selling club.” If you’re in England, Spain, Italy, Germany, and maybe France…there are a few good teams to pick from, even if they aren’t going to win the championship. But if you’re a fan in Poland, Portugal, the Netherlands, Belgium…your best players play elsewhere and there’s not a lot left. So maybe folks aren’t universally excited by the democracy of their domestic leagues.
There could be a lot more done in Europe to match competitive teams with competitive leagues.
2. This is really about the TV markets in Asia and to a lesser extent the US. European fans tend to like big teams but they like their hometown team as well. Fans in Singapore or Chicago probably don’t recall the grand history of Burnley or Stoke City when they take on Manchester United. So long as those fans pay for soccer, this idea will be around.
3. The financial position of many fan-owned clubs, especially Barcelona and Real Madrid, is probably much worse than realized. Perez more or less said this. They’ve been mismanaged “for sporting reasons” for a long time and have “assets” that they can’t afford to keep or lose. The guarantee of a cash injection and cash flows would do a lot for them. Many teams in Germany were in bad straits when COVID began because they borrow money on assets to pay for players.
4. The most interesting thing about the SL to me is that teams are willing to lose to make a ton of money. Sure, Barcelona would play Liverpool a lot, but somebody in that league is going to be the worst team and most teams won’t win anything every year. That will be a big change when your local team that wins a trophy annually goes years without it. Is that “more interesting”? Maybe. But I don’t think Arthur Blank remarks how great it is that the Falcons can be consistently bad and profitable.
Fair points, all. The English first division was once in pretty much the same boat as The Dutch, Belgian and Portuguese leagues are today. Fans still went in good numbers (in some cases, higher numbers than today but that was largely due to ground capacity when standing was allowed) even though the Archibalds, Hateleys and McManamans had all been sold to the continent (perhaps, like me, you remember Hateley grumbling that “they can’t make good chips in Italy”.)
As noted below, the key part of the ‘current’ ESL proposal is that the clubs will still be part of their domestic leagues. Absent that, yes, their fans would have to endure the majority of the clubs having sub par and trophy free seasons. That, I believe, is what has always kept the talk of the pan european league just that: talk. By notionally staying in their domestic leagues, they can still clean up hardware (insert Arsenal joke here) domestically while hoovering up money from their own Euro league.
From my POV, I don’t care if they leave or stay. That is a matter for their ownerships to decide based on their best business cases (and fan angst aside, it is a business). I am only offended by their plan to do both at the same time.
The only question I have is, if they are forced to choose one or the other, which would they go for?
Perez has said this weekend that the clubs committed contractually to an ESL and cannot “Leave”. I tend to believe they probably have, as nothing like the ESL could be announced without firm and binding commitments from member clubs.
So, now what?
Most courts don’t hold with the notion that your own incompetence can meet the standard of force majeure…
What a beautifully epic fail by the greedy owners.
I was surprised by Liverpool’s American owner Kroenke’s apology which seemed pretty darned sincere. Or his PR firm wrote the best, most genuine looking mea culpa for everyone…so maybe an A plus there on that paper.
In a way I was intrigued that the Euro Super League might make it. I was kinda of disappointed as I was hoping my hometeam MLS Houston Dynamo might be in secret discussions to be come a permanent member of the SL.
Oh well, I’ll just have to go to my fall back position which is never ever rooting for any of the these greedy jerkish12 teams…that will fix their wagons!
My support for PSG, Bayern, Dortmund is now quite higher than it was before.
Kroenke is Arsenal, Henry is Liverpool. But yeah. (Though I also thought, “Nice apology, but it loses something when you’re apologizing for something that was YOUR IDEA.”)
Sorry, I get confused with all the greedy American owners. Hard to keep them straight.
The great thing about all these apologies is that the owners will be able amortize the cost of preparing them over the next three or four attempts to fleece football fans with some kind of Euro League.
It seems to me there’s really no-one to cheer for here. The money grubbing 12 are really just trying to cut UEFA out of the cash cow (or at least reduce their take dramatically). Whether they would find getting into bed with JP Morgan (who paid almost $2Bn voluntarily to settle claims regarding their ‘assistance’ with Madoff’s Ponzi scheme) any more rewarding is debatable.
I am no soccer fan, but this idea has been approached for College Football. Why? I can tell you as a Penn State guy, the only profitable sports are men’s hoops, hockey and ( especially) football ( wrestling breaks even) so to satisfy Title IX those profitable sports ( especially football) have to pay for ladies golf. We could get better ratings on TV and attendance if we are playing Alabama instead of Rutgers ( which means more money). Of course, there is a price to be paid for this ( just like when we went to the Big 10), and that price is not playing Pitt. Pitt has basically been left in the dust.
One of the greatest feats in team sports history was Leicester’s 2015 EPL title. I was so excited watching one of the least sexy clubs in the EPL, a club I didn’t care about just weeks earlier, cheering them on once the calendar turned to March. A super league would destroy this excitement and render the domestic leagues meaningless.
The more frequently you force ‘great’ matchups like Man City v Barcelona, the less special each meeting becomes. When they happen today it’s because they’ve spent 12 months earning their right to meet up in the first place, casting aside dozens of challengers.
And Brighton v Burnley looks boring when compared to other matchups in the same league. Create a super league and, by comparison to others in the same league, someone will become the Burnley and another will become the Brighton, and we’ll be complaining about the matchups in that super league, too
One of the main reasons that the ESL founding members (former founding members? Former ESL founders/members?…) wanted to remain in their respective domestic leagues is entirely to avoid the problem you highlight in your last paragraph.
The problem with them just leaving entirely (which they could do so long as UEFA sanctioned the superleague, or just do and become an outlaw league given the money on offer from JP Morgan) is precisely that they know 3-6 of them will end up having to explain 5 win seasons with no trophies to their fan base, while another 3-6 will have to explain losing records. They need the domestic league patsies to pad their win totals (much like major conferences in US college football).
Becoming an outlaw league would also spell the end of those summer tours where they vacuum up vast sums of money for fielding sides with no more than 5 starters on in North America and Asia, participation in the CWC and player participation in the Euros, ACN and World Cup.