GOOOAAALLL!!! (For Some)… Let’s Talk Changing International Sports
Soccer fans around the world were shocked on Sunday when major European soccer teams announced plans to disrupt century old traditions. Twelve of Europe’s biggest and wealthiest clubs vocalized intentions to break away from the established soccer fixture to form a midweek “Super League”. The new league would rival the Champions League, one of the biggest club tournaments in football, controlled by the UEFA.
The teams leading the charge are iconic names you’ve heard of before, across The United Kingdom, Italy, and Spain — think Real Madrid, Chelsea, Juventus, and Manchester United. Under the proposed announcement, the Super League will offer permanent spots to the founding teams (plus three teams yet to be announced). The league will leave room for five teams that are able to qualify on an annual basis, bringing the total to 20 teams. The participating clubs will continue to be involved in their respective national leagues but would also play each other in a new midweek competition.
The catalyst for this move has been proclaimed to “save football” at a time when young people are “no longer interested” because of “poor quality games”, according to Real Madrid’s President, Florentino Perez. However, it is really driven by money. Iconic clubs with armies of global fan bases are tired of sharing the pie with less popular teams. The clubs involved would not have to share revenue with a myriad of teams involved in Champions League qualifying rounds and the UEFA itself. Given the founding teams qualify automatically, year after year, it also becomes a license to print money.
The biggest losers from this will be the UEFA and the smallest clubs across Europe that benefited from the sales associated with large fan bases visiting their towns and the lucrative share of advertisement revenue.
JP Morgan is reportedly bankrolling the Super League, agreeing to provide a €3.25 billion (USD ~$4bn) loan to get the new league off the ground. The founding clubs have been promised a $300m welcome bonus, which serves as an entrée before the global broadcasting-rights fees are served. Although many deny claims of holding initial discussions, streaming and tech giants could benefit from this major split in elite football. According to its latest financial report, UEFA takes in nearly $4 billion per annum from media rights across all its competitions.
Zooming out, this stands to be one of the largest economic restructurings in modern pro sport history. Given the recency of the announcement, it remains unclear how much it will impact other deals in the European soccer leagues. However, what we do know is that this news comes at a time when the sport has been hit hard by the pandemic and additional sources of sales are paramount.
Although far from a certainty, none of what has been proposed is revolutionary; the Super League plans to take the North American model of sports ownership to Europe. With allowing US billionaires to take ownership stakes in these teams, it was only a matter of time for this announcement to happen.
Hamish Baillieu, Venture Capital
48 hours after the Super League announcement, the entire plan looks set to collapse amid widespread dissatisfaction from fans, players, and managers. The Super League released a statement last night that the project has been “suspended”. All six English Premier League teams that initially agreed to take part are backing out already.
The Super League announcement draws parallels to that of the history of the NFL. In 1960, the American Football League was created to compete with the NFL. Because of this, the subsequent agreement that brought to life the Super Bowl in 1966 and the complete merger of the two leagues in 1970.
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