Explaining Super League’s latest move, hiring new CEO: What does it mean?

On Wednesday, A22 Sports Management — the company that launched the European Super League in April 2021 — appointed a new chief executive, Bernd Reichart, who claimed it would be relaunched within three years. This comes against the backdrop of legal action taken by the three remaining Super League clubs (Barcelona, Real Madrid and Juventus) against UEFA in a case lodged with the European Union’s Court of Justice (CJEU).

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A preliminary verdict is expected in mid-December, with a final one in January 2023.

Q: So they haven’t given up on this… what’s different this time around?

A: Well, they have a new website where you can judge the merits of their arguments, but mostly, it’s about winning over public opinion — or as much of it as they can — ahead of the verdict.

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Their argument boils down to the fact that because UEFA regulates the sport — licensing teams, appointing referees, registering players, etc. — it is abusing its position by also organising competitions like the Champions League and redistributing revenue from them. It’s an important argument and there may be some merit to it, but it’s also not super-sexy to the average fan, so they bring up a bunch of other arguments they hope will resonate, like the fact that the game is unsustainable financially, that access to the game is too expensive, that there isn’t enough investment in women’s football and that too many young people are no longer interested in the game.

Q: I don’t get it… if it’s a bunch of independent judges ruling on a point of competition law, why do they need this PR blitz to go with it? Why try to win over hearts and minds?

A: Partly because last time, they did such a bad job of getting their case across, and partly because many view the CJEU as a “political court” — one that is influenced by popular sentiment and politics. And if a majority of Europe fears the impact a pro-Super League ruling might have and is dead set against it, it might well influence their judgment. Plus, if you can show the sport itself is “sick,” as Real Madrid president Florentino Perez says, and it’s in real danger, then it might undermine UEFA’s main argument, which is based around the “specificity of sport.”

In other words, it’s not just a business involving the top clubs, there’s a whole pyramid of clubs beneath it right down to grassroots level and the best people to run it are elected officials.

Q: Are their arguments convincing?

A: Some, frankly, are just nonsense. For example, Perez said European Football was losing the battle with the NFL and mentioned that the Forbes list of most valuable sports teams is now dominated by NFL franchises.

Leaving aside the obvious “apples and aardvarks” comparison between a closed league in a different sport, and in a bigger, wealthier economy, with mechanisms designed to generate parity — like the draft, salary cap, equal redistribution of more than 95% of revenue… all things Perez presumably wouldn’t like — the theoretical valuation of a club as deemed by a Forbes researcher is pretty irrelevant to the financial health of the European football pyramid as a whole. (Especially since a number of clubs, like the one Florentino runs, can’t be bought and sold.)

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Others are presented out of context, like the fact that 40% of 16-24-year-olds either have no interest in football or “hate the sport.” OK, that same study found that a much lower percentage of even younger people (16% of 8-15-year-olds) had no interest or “hated” football. So what gives? Aren’t they the future of the sport? (Oh, and the number who “hated” or “had no interest” in the game among over-25s was around 28%, suggesting that you can turn these numbers around to support any argument.)

As for “fan access to football” (their words) being too expensive, sure, it might well be, but it’s not clear how “generating more fan interest” would “help moderate subscription prices.” Even assuming that whatever they propose would generate more interest (and that’s a big assumption), didn’t we learn in Economics 101 that increased demand often tends to lead to increased prices?

Others, I think, are more valid.

Q: Like what?

A: Well, there’s the legal one, which is the basis of their court case. Unless the CJEU finds that the game is more than just business — aka, it’s somehow part of European culture and social fabric, and therefore ought to be protected — under competition law as it is written, I’m told they have a strong case.

They also have a point when they say UEFA didn’t do enough to put controls on spending and to enforce those controls. Clubs like Manchester City (2014) and Paris Saint-Germain (2014, 2022) were found guilty of breaching Financial Fair Play and it didn’t seem to affect them. City were also banned from European competition for two years by UEFA for cooking the books and breaching FFP, in 2020 only for the ban to be overturned by the Court of Arbitration for Sport a few months later. (CAS did find them guilty of obstructing a “lesser charge.”)

I think that argument will resonate with fans of traditional big clubs who, to this day, believe City and PSG got off lightly, but even that comes with an asterisk.

Q: How so?

A: It’s true that UEFA failed to prove their case with CAS and that the 2014 breaches weren’t dealt with harshly. But it’s equally true that, to some degree, Europe’s big clubs — including the remaining Super League three — could have done more to ensure the process was transparent and that UEFA would take a harder line, and perhaps one that was bulletproof to being overturned by CAS in City’s case.

After all, UEFA derives much of its revenue from the Champions League and every cycle, Europe’s top clubs negotiate with UEFA as to how that money will be distributed. They certainly had the clout to demand harsher rules, more transparency and stiffer punishments — heck, Juventus president Andrea Agnelli was in charge of the European Club Association and sat on UEFA’s Executive Committee from 2017 to 2021. But they didn’t, possibly because it suited them to have clubs like PSG and City inserting liquidity into the transfer market.

UEFA have introduced new rules (no more “Financial Fair Play,” but “Financial Sustainability” instead) and they’ll probably help post-COVID, but the central issue of allegedly inflated sponsorships and the perception that some clubs are getting away with things, is likely to remain. Especially since the new head of the European Club Association, Nasser Al-Khelaifi, also happens to be president of PSG and a UEFA Executive Committee member. He’s also chairman of BeIN Sport, who buy tons of TV rights from UEFA, so one could say he’s a human conflict of interest.

Incidentally, a few years ago, when PSG and City were the new kids on the block, is when Europe’s blue bloods could have forced through tougher, more transparent rules and demanded stiff enforcement. Now with Juventus, Barcelona and Real Madrid on the outside and Al-Khelaifi heading up the ECA, it’s hard so see it happening.

In any case, there’s a much more realpolitik reason why they’re pushing this and that might resonate too, though not with fans of the Premier League…

Q: OK, what’s that?

A: The Times has details on a dossier sent to clubs that says the Premier League “is outgunning all continental leagues” and that English clubs “are backed by hedge funds, public investment funds, sheikhs, oligarchs…”

Q: Is that a valid argument? The Premier League did far outspend everybody else in the past transfer window, didn’t they?

A: They did, though to be fair, it probably has to do with the fact that they have the second-highest average attendance of any European league and three times the TV revenue of other top leagues. Not to mention you have hedge funds in other countries, too, and for a number of reasons, several of continental Europe’s traditional big clubs were hit harder by the pandemic than others. But the reference to “public investment funds, sheikhs and oligarchs” seems an obvious reference to Newcastle United, Manchester City and Chelsea (at least when Roman Abramovich was still around).

That’s the sort of language that will resonate with fans of Europe’s traditional big clubs, except it’s not clear how some sort of Super League would fix this. Also, given that six of the 12 original Super League clubs came from the Premier League, I’m not sure why they would forgo their dominant position, unless they come up with some sort of competition format that is far, far more lucrative than what they have now… and maybe with a guarantee that there will be place for them in it every year. (Right now, the Premier League has a “Big Six,” but only four places in the Champions League.)

Q: But don’t the Super League insist that theirs won’t be a “closed competition” like it was when they first proposed it back in April 2021?

A: Yes, although “open competition” can mean many things. Euroleague basketball has often been described as a model favoured by Perez (and, indeed, Real Madrid are a part of it, as are Bayern and Barcelona). It’s “open” in the sense that anyone can apply for a “long-term licence” to play in it and if it’s granted (based on a set of requirements, like the size of their home arena) they don’t have to worry about qualifying. In all, 12 clubs have long-term licences, four clubs have short-term “wild card” licences and two qualify via European competitions.

Q: Does it work?

A: I’m a basketball fan and sure, it’s exciting to watch, and is probably the best basketball league in the world outside the NBA. But it doesn’t generate much money: around €80m a season. Many of the clubs are funded by wealthy owners who do it for prestige or because they are fans, and here’s the irony: Barcelona and Real Madrid know this.

Between 2015-16 and 2020-21, their basketball operations have lost money every single year, and not just because of COVID: Real averaged losses of €24m between 2015 and 2019 and Barcelona roughly the same. The club’s other divisions, especially football, fund the basketball part.

Q: OK, so if they do this, the Super League will need to tweak their format and not copy the Euroleague?

A: I’d assume so, because the Euroleague is a tough sell if the goal is sustainability and revenue growth. I just don’t know what they think they can come up with without alienating the Premier League clubs.

But maybe that’s not their goal. Maybe the goal is simply to win over enough public opinion to sway the CJEU judges and win the court case. If they can do that, they can go back to UEFA with a stronger hand and more demands.

And if they don’t get what they want from UEFA? Then they’ll know they can simply form their own competition without UEFA or domestic leagues (like the Premier League) being able to sanction them.

Q: What might that look like?

A: I don’t know. Maybe an invitation-only alternate Champions League, with Europe’s 32 biggest and most popular clubs participating, regardless of sporting merit. Maybe with franchises in big cities that currently don’t have football powerhouses like, say, Berlin or Moscow (post-war, obviously). It would probably generate more money and, from the clubs’ perspective, they’d get to decide how to split the revenue and how much, if anything, to devolve down the pyramid in solidarity payments.

Those are, pretty much, the stakes here.

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