European Super League – Page 2

A YEAR ago, speculation was rife about the Qatar World Cup and the uncomfortable moral issues of the country’s suitability as host. With the competition now over and the football industry seemingly unable to dent the resolve of Qatar and FIFA, the game now attempts to moves on until the next error of judgement or scandal.

FIFA has already unveiled its preliminary plans for the future, although the idea of a 48-team World Cup may be rethought after the supposed “best ever” tournament in Qatar. This was always going to be the summing-up message by FIFA, the implication being, that for all its faults, the governing body made the right decision all along. There’s something a little delusional about this conclusion, a combination of outright presentism and wishful thinking. FIFA and Qatar got the winner they wanted.

The landscape will be dominated by club football in 2023, in particular the stubborn campaign to form a European Super League, which simply won’t go away. The European Court of Justice has decreed UEFA and FIFA were not guilty of breaching European Union laws in blocking attempts to start up a rival competition. This was a setback for the three most enthusiastic advocates of the super league, Real Madrid, Barcelona and Juventus. This story will roll on in 2023, especially as Barca and Juve have problems of their own to solve.

The elite clubs remain convinced a super league is the way ahead, regardless of the unanimous disapproval of the project. The research used to support the concern that football is in trouble and that the younger generation is less interested in watching games was self-serving and tailored to support the agenda. The super league was dressed-up as being the salvation of European football.

La Liga commissioned a study by KPMG[1] to examine the effect of a super league and revealed a 55% loss of revenues should the concept materialise. The same could possibly apply to the English Premier League and Serie A. Importantly, more than 70% of revenues in European football are derived from domestic leagues, so fragmentation of the eco-system could be catastrophic.

Football has shown over the past year that nothing can be taken for granted. The prospect of clubs like Manchester United and Liverpool changing hands would have, at one stage, seemed unthinkable, but within a short space of time their owners – both US-based – revealed they would be open to offers. Both are trying to compete with Manchester City, a middle-eastern owned club with vast resources. Manchester United’s owners, the Glazer family, are unpopular, largely because over the past decade or so, the club has declined from the highs it enjoyed under Sir Alex Ferguson. Liverpool have a conservative business model that has reaped rewards under the charismatic Jürgen Klopp, but in the long-term, they cannot keep pace with Manchester City.

Arsenal found themselves in a similar situation under Stan Kroenke and graffiti urging him to go can still be found in the streets surrounding the Emirates stadium. However, Arsenal’s start to 2022-23 has all but silenced the critics, at least until the next downturn. The Russian invasion of Ukraine brought to an end the reign of Roman Abramovich at Chelsea, who were bought by a consortium fronted by US businessman Todd Boehly. Chelsea’s fans will soon discover the new regime will be very different to the generous but controversial era of Oligarch football at Stamford Bridge.

In some respects, the sale of Chelsea for £ 4.25 billion alerted owners like Liverpool’s Fenway Sports and Manchester United’s Glazer family to the potential rewards from selling Premier League clubs. Both clubs are highly valued, but the headline-grabbing figures for United of £ 8 billion are somewhat greater than calculations made by football business experts. As Football Benchmark said: “Economic theory teaches us that price and value are two different concepts and what we pay for a product is not necessarily its fair market value.” [2]

Clubs like Liverpool and Manchester United are costly investments and hence, the pool of possible buyers will always be small. Inevitably, the Middle East will be among those that can afford to buy one of world football’s top clubs. The US may be interested in both clubs, but the pragmatic and return-oriented approach of American investors will not move the needle forward enough for some. US investors believe there is substantial upside in broadcasting and in creating global franchises, so much so they anticipate the Premier League will overtake the NFL in the near future. [3]

The Middle East, notably through its huge sovereign wealth funds, will continue to seek-out football investments in 2023. There is a perfectly logical explanation for this appetite for western football teams given the world’s finite oil resources. The region is preparing for the post oil world and looking to secure links to the commercial networks of Europe and the US. Certainly, the increase in club valuations and the rising operating revenues, indicate there is a platform for growth.[4]

Inevitably, the transfer market will feed off investor sentiment in 2023 as well as the halo effect of the World Cup. In the aftermath of Qatar 2022, the football world will experience a period of change that has not been seen for some years. Many of the top players and national teams have reached a point in the cycle that means retirement for some and displacement for others. With unlikely names such as Japan, Saudi Arabia and Morocco all making their mark, big clubs may try and raid these countries for fresh talent. As with the ownership issues, in 2022 we saw the first signs of football royalty like Cristiano Ronaldo reluctantly relinquishing their crown. More will follow in the months ahead and by the end of 2023, the deckchairs will have started to be rearranged.

Equally, managers once felt to be part of the club’s DNA may also decide it is time to move on. While the fans of Liverpool and Manchester City, to name but two, see the departure of their iconic coaches as seismic events, it will happen at some point. Change is a constant in life, even in football, and the longer things remain the same, the closer to change we are. In 2023, the game will surely be impacted by a worsening global macroeconomic climate that could damage match attendances, sponsorship and even the much-coveted broadcasting revenues. With Qatar out of the way, the focus will shift towards existential problems for many clubs, particularly at the lower end of the food chain.

[1] La Liga newsletter, December 15 2022.

[2] Football Benchmark, “What is the value of Manchester United?”. November 2022. https://www.footballbenchmark.com/documents/files/MU%20Report_07DEC.pdf

[3] FT: America’s English football takeover by Craig Coben and Constantine Gonticas, October 2022. https://www.ft.com/content/6f7c3b92-42d1-46d8-9dc3-0276c1ef703f

[4] Atlantic Council: “Many European soccer teams are owned by Gulf states. But why? April 2022 https://www.atlanticcouncil.org/blogs/menasource/many-european-soccer-teams-are-owned-by-gulf-states-but-why/

THE concept of a European Super League refuses to go away; as expected, the advocates are regrouping and formulating what they believe will be a more palatable solution for the good of the game. Of course, it still smacks of elitism and will undoubtedly look like a group of big clubs with self-interest at heart. They’ve also tried to make statistics work for them, claiming that young people don’t really like watching the game so much, that their supposed low attention span has made the game too demanding to meet their requirements. This data was taken from the US, which is not the prime audience of European football. Javier Tebas, president of La Liga, has rightly called this research as “fake news”.

Many people believe the very idea of a super league is a product of entitlement, arrogance and presumption. So it is quite comical that when you look at this season’s European competitions, so many of the original 12 clubs are hardly living up to their status. Barcelona, Atletico Madrid and Juventus have all tumbled out of the UEFA Champions League, Arsenal and Manchester United are playing UEFA Europa League football and Tottenham Hotspur and AC Milan have yet to secure their place in the last 16 of the Champions League.

Over the five seasons prior to 2022-23, only four clubs from the 12 have made it through to the last 16 in every Champions League campaign: Liverpool, Manchester City, Real Madrid and Juventus. The average number of the rebel 12 that have successfully negotiated the group phase is around eight. This season, it could reach a low of five or six, but most likely, it will be seven. Barcelona, as cash-strapped as they are, have just missed out on the EUR 9.6 million awarded to teams that make the last 16.

While the English clubs have gone quiet on the subject, perhaps realising that any attempt to introduce a super league may be the biggest public relations disaster they have ever experienced, the persistent trio of Barcelona, Real Madrid and Juventus are still hoping their dream project comes to fruition. If it does happen, they may struggle to find willing partners. It would seem unlikely that the likes of Chelsea, Manchester City and Liverpool will be involved, so that would leave the ESL with the task of finding other clubs that will not damage the viability of such a scheme.

There is a strong feeling the ESL will by-pass English clubs and looking at big names like Celtic and Rangers. Maybe a revamped league with these Scottish giants and Ajax, Benfica and Porto would fill the gaps? The narrative also seems to have shifted and, supposedly, the ESL is primarily about combating the growing menace of English clubs, who are increasingly dominating European football.

Nothing lasts forever, though, and clubs invariably go through cycles that change their status. Manchester United and Arsenal, for example, have fallen from their pedestals in recent years, and Tottenham’s position among the elite is quite tenuous and Chelsea are a shadow of their Abramovich peak time. Now Liverpool are having a tough period as they suffer the consequences of lack lustre rebuilding. The Italian clubs have all experienced a fall from grace and suddenly, Barcelona look a very vulnerable club. Only Manchester City and Real Madrid of the 12 seem in truly robust shape at the moment, although Arsenal’s start to 2022-23 suggests the trajectory has turned positive for the north London club.

Barcelona, Juventus and Real Madrid remain dogged, however, and they have taken UEFA to court, claiming they have abused their power in blocking rival events. The decision won’t be revealed until mid-December, by which time, the ESL story may have taken another twist or two. Meanwhile, the company that is handling the ESL, A22 Sports Management, have appointed a new CEO, Bernd Reichert, who is confident that his clients will get their way.

In reality, will they get what they want? How will these clubs look their peers in the eye if the creation of a self-serving model inclicts mortal damage on domestic football right across the continent? How can they remain members of their local association and their confederation? And most of all, can they honestly tell their stakeholders they are acting in the best interests of the world’s most popular sport?