Why the Super League represents a danger to the core values of European Football

In a world where financial pressure means everything but enjoying the process, solutions have to be thought of and therefore changes come up. Sometimes the changes are gradual and slow, sometimes radical. The world of football has been hit by an earthquake, but not by surprise. Before the 1980s, football was seen as a classic sports industry, with no proper profit generation: at some point, investors started to see football as an entertainment industry and therefore started to buy the clubs directly to manage them - basically from traditional families, themselves fans, owning clubs to rich investors from Asia for instance wanting the biggest share of organizations.

But why is this surprising? Well, the football industry cannot be treated as a regular economic activity. Business processes are not comparable, and finances are depending on sports performance. The great mystery of "what is the perfect playing style" has never been revealed, so success is based on thousands of variables. It is unthinkable to plan a victory, if at the end the one out of eleven athletes makes a "stupid" mistake influencing the end result.

WHAT IS THE EUROPEAN SUPER LEAGUE?

Let's briefly go over the facts for those who haven't followed the "war of the rich", as L'Equipe defined it this morning, that has upset the European soccer world and not only.

The concept of the European Super League has been in talks for a few years, with the ECA (European Clubs Association) discussing and arguing the positive aspects of this new born league that should be realized at some point in time. Well, the point in time is now.

The European Super League represents a multiple billion euro project, founded by the clubs themselves (and external stakeholders, publicly announced for example JP Morgan), which would pump each club at least $350m for every single participation. A European tournament with 20 teams, of which 15 are already fixed, the so-called "founder clubs": the top 6 clubs in England, 3 from Spain and 3 from Italy, with 3 still to be named. The 5 remaining places to enter the competition will be decided every year according to: we don't know. A mechanism has been conceptualized, probably based on performance, but not yet revealed in detail.

Who created it and why? This is the most interesting part. Apparently, the two main architects are Florentino Pérez (President of Real Madrid) and Andrea Agnelli (President of Juventus), so the governing body would be the clubs themselves. They set their own rules. This becomes crucial when seeing it from a financial perspective: most clubs that participate as a standard have a huge financial debt and are struggling to keep up with it. The giants Real Madrid, Juventus and Liverpool are swimming in financial nightmares, already before the COVID-19 pandemic and even more after. Also, UEFA had in practice the concept of Financial Fair Play, which means that it is not allowed to introduce external capitals if not coming from purely performance (winning games and competitions). The rich of the football industry are trying to evade this situation and create their own reality, despite the main values of football are broken: fairness and meritocracy.

A FINANCIAL OVERVIEW

Some of the clubs that agreed to participate in the Super League can be seen below with their respective net financial debt of the year 2020 (source: KPMG):

Real Madrid CF - net total debt: EUR 170m

FC Barcelona - net total debt: EUR 317.6m

Tottenham Hotspur - net total debt: EUR 685.5m

Manchester United - net total debt: EUR 524m

Juventus FC - gross total debt: EUR 390m

Inter - net total debt: EUR 322.7m

A coincidence? It is not: every participant, according to media, will receive up to EUR 400m - and this without having to prove performance. All teams listed above are participating automatically and do not count to the 5 variable teams that qualify every year. These founder clubs, indeed, are looking for alternative ways of revenue, as the ordinary structure of football is not the ideal reality they want to work in.

One of the major inconsistencies with this mentality is that clubs that take care of their finances and therefore result with 0 debt with any bank or stakeholder. The example of Napoli, a club owned by an Italian movie producer, has always held back from making multimillion euros worth of player signings during transfer market periods, and this to respect the rules of financial fair play. According to the Super League concept, having no debt is not rewarding. The opposite: increasing debt to increase quality of the team means you are seen as a giant and can accumulate power. This clearly goes agains the first rule of finance: avoiding debt overload.

UEFAs REACTION

The governing body of European football, UEFA, has certainly not remained silent in these turbulent hours. Their official statement says, quote: "we wish to reiterate that we will remain united in our efforts to stop this cynical project, a project that is founded on the self-interest of a few clubs at a time when society needs solidarity more than ever."

"We will consider all measures available to us, at all levels, both judicial and sporting in order to prevent this happening. Football is based on open competitions and sporting merit; it cannot be any other way."

"The clubs concerned will be banned from playing in any other competition at domestic, European or world level".

And finally, the powerful end statement:

"We call on all lovers of football, supporters and politicians, to join us in fighting against such a project if it were to be announced. This persistent self-interest of a few has been going on for too long. Enough is enough."

UEFA has also praised major clubs like Paris Saint-Germain and Bayern Munich, as they both have rejected to participate at the Super League. Especially Bayern is not a surprise, as the club is known to not have any interests in bearing debt in their books. A clean club as we would say, that is against this masochistic system with one only scope: profit.

REACTION OF COMMUNITY

Fans (or consumers) have reacted aggressively to the official release of the Super League intention. To make an example, Rio Ferdinand, former captain of Manchester United and England national player, reacted as follows: "There’s no consideration for the history, for the people in the different parts of the pyramid below the top, top teams that they’re trying to separate from.It’s a disgrace, I can’t believe it. How have they got the audacity to do it in the climate we’re in at the moment with the pandemic around the world?"

"I think the element of being anti-competitive goes against everything football is about. Relegation, promotion, being rewarded for winning, being punished for not winning: these are things that add to the value of our game that we love.

"It shows me that these people have no idea what football is about. It’s purely a business transaction, that’s it. There’s no thought for anyone else in the pyramid, there’s no consideration at all. I can’t believe it"

In fact, the relegation zone is home to many football fans emotions, and with this concept it would vanish. Clubs would not have to "fight" in order to maintain their position in the league, but could rather play for "entertainment purposes" and focus more on being profitable. Also, following one's home team will be more costly, as more away games will be in place and therefore traveling and ticketing will profit from it.

Also: have the players agreed? Have managers agreed? They would be condemned to the exclusion of all other competitions in football by UEFA.

KEY TAKEAWAY

The European Super League deletes the most pure emotion football games generate. David and Goliath cannot coexist, and therefore pleasant surprises like Leicester City winning the league against all odds in 2016 could have been impossible. Ajax, full of talented teens and an amazing playing style, could not have kicked out Juventus and Real Madrid in the Champions League. The romance of football gets lost, for the purpose of profit and decreasing debt.

Instead, a strong signal should be put in place: severe consequences for the overly indebted clubs, that actually should be excluded from competitions because of their debts. If not, inevitably not all teams could start from a more or less equal point - 16 teams that actually respect the policies and regulations and therefore cannot spend EUR 80 millions in the transfer market, against 4 teams that actually do even without proper ROI.

The football world depends on thousands on variables: the right food, the right shoes, the right playing system for the right players. Players can be seen as actors and assets, and they are extremely varying culturally. A proper "corporate culture" is necessary for players to feel at ease and confident, in order to provide excellent athletic performances on match day. A financial investment is extremely hard, as you cannot predict the performance of players. Many cases have shown that after spending EUR 60m euros on a player in defense, he might be the one making a "stupid" mistake inside the own penalty area gifting opponents with a goal - EUR 40m of qualification bonus vanished because of a short distraction.

Football is an unpredictable mystery, and that is why it is so popular around the world.

If anyone is able to give me a reason for this system to succeed, if not profits, please let me know.