The European Super League Fallout

Lately, we have all heard a lot about the European Super League (ESL) and the critical role it is playing in the UEFA backlash that has been going viral for the past couple of weeks. However, do you know exactly what is the reason behind this, what is the ESL, and why is this happening now in 2021? When the global pandemic first hit in 2020 the main concern from a footballing perspective was whether the 2019-2020 season will be concluded, but it soon became apparent that it would be more than a brief pause and would have massive ramifications in the long term with the 19/20 seasons being cut short in countries like France and The Netherlands. Soon, the 20/21 season resumed, but crucially most matches across Europe have been played with no fans present and with no matchday revenue as well as withheld sponsorship. Thus, several clubs have found themselves in dangerous financial positions, with two clubs particularly keen on the idea of a super league, the Spanish clubs Real Madrid and Barcelona who both have debts of over a billion Euros. Thereby, the Super League has never looked more appealing.

The European Super League (ESL) was founded on April 18th, 20211. It is mainly contested by an exclusive group of elite European clubs that have planned an annual club football competition. The ESL was perceived as a substitute and separate competition to the UEFA-Champions League and Europa League tournaments. The ESL consists of twelve teams; six of which are from England and are known as the Premier League clubs Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham. In addition, they were joined by three clubs from Italy Inter, Juventus, and AC Milan, and finally, the three best teams from Spain Barcelona, Real Madrid, and Atlético Madrid have all joined as ‘Founding Clubs’. The French club PSG and the German club Bayern Munich have rejected joining the Super League, these two teams are last season’s Champion League finalists.  

The idea behind the ESL was to gather the clubs with the largest fan bases, thus the large viewership numbers were guaranteed, which would eventually result in large sponsorship numbers in addition to more revenue from streaming services. This would mean that these teams that have agreed to be a part of this super league, have set to earn over $400 million a year from the competition, double the existing revenues from the Champions League. The ESL also sensed another vital opportunity with fans kept away from the stadiums by the pandemic since there would be less chance of impactful in-person protests in the stadiums. Moreover, the founding clubs can also be exempted from getting relegated, ensuring they will always have a chance to play no matter their performance. At the moment, UEFA, Europe’s football governing body, decides how the revenues generated are being distributed. 

UEFA facing an existential threat have struck back quickly with various threats to ban all the clubs and all the players who participate in the ESL from all UEFA competitions. “As previously announced by FIFA and the six Confederations, the clubs concerned will be banned from playing in any other competition at domestic, European or world level, and their players could be denied the opportunity to represent their national teams.” This was a statement written by the UEFA in response to the plans for the ESL. The proposal of ESL has been responded to by not only UEFA, but also politicians, celebrities, other football players, and a lot of die-hard football fans with allegations of greed and mere self-interest. The plan was initially to award the founding clubs a share of upwards of 4,8 billion GBP (6.6 billion USD) a season from global broadcasting and sponsorship rights for a closed league. US bank JP Morgan is funding the new league, committing an initial 3,5 billion euro (4,2 billion USD) investments.

In European football, the team’s place depends on their merit. Every club from the amateur level to the elite Premier League has the chance to get a promotion, where lower-tiered teams can climb up the football  ‘pyramid’, and relegation, where teams from the bottom of a league can fall through into the league below (Musaddique and Robertson, 2021). Through ESL, the founding clubs intended to create a new competition, separated from the existing pyramid. Over the years, the elite clubs have been trying to get more profit by getting more matches against each other and overall a “bigger slice of pie”, and now more than ever because of the pandemic.

As reported by the Financial Times, the founding clubs would share 32,5% of commercial revenues with a further 32,5% shared among the competition’s clubs, citing leaked documents. Once the annual tournament is completed, 20% of revenues would be given out on merit and 15% shared on each club’s broadcast audience (Keown, 2021). This structure closely resembles the US’s Major League Baseball (MLB) or the National Football League (NFB), promising high pays for media rights and merchandising. These numbers are bigger than playing in UEFA’s leagues. The Super League also intended to held matches on a more regular basis, which may sound eye-popping considering the amount of money that possibly could be generated from the large fanbases of the elite clubs. However, keep in mind that the more frequent big matches happen, as stated in the law of diminishing marginal utility, it will start losing its marginal benefits since long-awaited matches now feel like a normal thing, happening on a (what planned to be) weekly-basis. 

Although faced with threats from UEFA, banning these elite clubs might also hinder the other smaller leagues to earn revenues since the fact is most of these leagues also rely on the big name of the elite clubs with global fanbases, and the quality of the smaller leagues will therefore be lesser without them. Many also see UEFA’s threats and call-out to ESL as “money-making ventures” to be hypocrisy at its finest, since the UEFA itself is known for tweaking formats and laws to profit itself and the major clubs, also by adding more and more matches despite resistance due to the players’ health. UEFA has recently released a new format for 2024, one of them called “UEFA Coefficient”, meaning that historic clubs who might be performing poorly currently, can have “more layers” of protection to stay in the game, and seeding orientation which ensures the best teams to not leave early in the league.

The short-lived league also offered sponsorship opportunities to brands by saying that they can reach a massive global audience delivered by the European competition, allowing the brands to connect through similar values and the clubs’ massive fanbase. However, the creation of this new league might damage the clubs’ brand positioning instead. Clubs regularly use the high engagements they have with their fanbases, heritages, and local communities as key points to their partnership proposals, and although many agree that the elite clubs can gain more revenues on top of the significant financial rewards from playing on a more regular basis and huge television rights deals, neglecting this important relationship shows how the need to get more profit is bigger than the value of its community-based business approach.

At the heart of it all, despite the mention of how close the concept is to the US business models of sports, say observers: the nature of the corporate capitalism business model collided with the cherished true sports culture of meritocracy and fairness, where teams are treated the same and have equal opportunities to get promotions and relegations in the competitions. While The ESL did value the badges of the elite teams and the number of loyal fans behind that badges, they forget that behind those numbers are real people, who grow with and support their club for nothing but the love for the culture of football, of fairness and friendship through sports. It goes against everything the fans believe in, and they will surely not back down in order to lift up the true value of football games. Protests, both online and offline, have been growing in numerous areas, expressing the fans’ anger for the betrayal they have seen. To them, football is not just a game, it is an escape, a family, a belonging, and an identity they held proudly. 

The fuss of The European Super League has opened so many eyes about the big businesses running behind many sports organizations, and how the march towards globalization, together with a huge pandemic crisis and other shifts in political and economic sectors, are the big drivers to the current crisis of values. Just like all of us and many other businesses and organizations, we are all forced to adapt to the new changes in order to survive. While the most important of it all is the importance of keeping the culture and true values of football, from this short analysis, we can see that ultimately, just like any other businesses, the value you deliver and the customers you serve are the most important aspects you need to keep and respect, while balancing it with keeping the stakeholders happy. The values you live by keeping you differentiated from others, and a strong relationship with your fans- your family, your customers- who also resonates with the same values are what, in the end, get everyone through the changes and crisis occurring.