The Super League Was The Wrong Solution To A Real Problem

cwick (Chadwick Matlin, deputy editor): Well, a few days and several tons of schadenfreude later, the European Super League is officially dead. If it ever really lived. I’ve asked three of our finest soccer thinkers to join me to discuss what went wrong, and what it tells us about the state of global soccer. Ryan, Grace, Tony, you’re the only ones I want to form a breakaway league with. Tell me what was going through your mind when you first heard the full details of the Super League. (The main highlight for readers: 15 charter teams that would never be relegated from the league and five more that would get in based on performance.)

ryan (Ryan O’Hanlon, FiveThirtyEight contributor and author of the No Grass in the Clouds newsletter): My main thought as the league was rolled out: Seriously, this is all you’ve got?

tchow (Tony Chow, video producer): I felt like I was a Ping-Pong ball going back and forth between “no way this happens” and “oh, man, it’s definitely going to happen.”

grace (Grace Robertson, FiveThirtyEight contributor and author of the Grace on Football newsletter): My first thought was “this is either a threat or, if this is really it, they better have an impressive plan.” And it was really it, but their plan felt like they made it up on the back of a napkin.

ryan: The name should’ve tipped us off to the lack of imagination behind all of it. They literally just called it “Super League”!

grace: Even things like whether the league would have VAR wasn’t clear. How do you not have everything locked down before announcing?

tchow: Now with this proposal in the rearview, the thing I still can’t wrap my head around is the idea that Juventus president Andrea Agnelli, Real Madrid president Florentino Pérez and company didn’t anticipate this reaction as a possibility. Or maybe they did and just didn’t care and felt like they could bulldoze their way through to make this happen?

ryan: They didn’t even have all the teams locked in!

grace: I can only assume they thought their PR would be better than it was, and that would persuade people enough to go for it. As it was, the whole thing was a disaster. Like, let’s say they announced it with all the teams locked in, a global broadcast deal with DAZN or Amazon or whoever you like, and a bunch of videos from Jürgen Klopp, Lionel Messi, etc., saying how great the league is going to be. MAYBE, then, you have something viable.

ryan: Instead, we got Pérez appearing on a midnight talk show, trying to tell us that this would “save football.”

tchow: In a way, it really did.

grace: They’re an entertainment product. Does the CEO of Disney1 go on TV vaguely ranting about how the new Marvel movie will save cinema while also wanting to pick fights with half the audience?

cwick: There’s so much to discuss, so I don’t want to beat a dead horseman of the apocalypse for too long. But let’s focus on what the charter teams at least say they were trying to address: 

The pandemic has shown that a strategic vision and a sustainable commercial approach are required to enhance value and support for the benefit of the entire European football pyramid. In recent months extensive dialogue has taken place with football stakeholders regarding the future format of European competitions. The Founding Clubs believe the solutions proposed following these talks do not solve fundamental issues, including the need to provide higher-quality matches and additional financial resources for the overall football pyramid.

Forget how they planned to solve those issues themselves. Are there real problems in global soccer writ large? Or just for these super-rich teams who maybe overleveraged their finances and got caught out during a global economic crisis?

grace: I definitely think a lot of teams are in serious trouble. But this seemed a total fantasy solution. We already knew margins were tight before the pandemic, so I do legitimately believe this is a crisis point for much of Europe.

ryan: There definitely are problems, and frankly, the structure of European soccer doesn’t exactly encourage “sound business models.” Teams in the Championship are wildly overleveraged while trying to get into the Premier League. There is barely any competition in the domestic leagues outside the Premier League. And the pandemic has destroyed most teams’ non-broadcast revenue streams.

grace: It was notable that Manchester City and Chelsea, who care less about profits due to owner support, were apparently the most hesitant of the English sides. And PSG, also unconcerned with profits, didn’t join at all.

cwick: Is that data public? Or are we just taking teams’ words that they’re in dire financial straits?

grace: The often reported claim is that Barça is in over a billion euros of debt.

ryan: They’ve all been hit pretty hard by COVID, but they weren’t keeping things in check before it, either: 

tchow: To answer your question more directly, Chad — yes, there are problems with global soccer writ large. This Super League was not created to address those issues.

cwick: Tell me, then, if this is a reasonable way to see this situation: “A bunch of companies made risky financial decisions that were particularly unsustainable during a major economic crisis affecting their industries. Rather than having their owners take a loss, though, they want to try to change the rules under which they operate as a way to avoid taking a loss. In the process they pass on further losses to smaller entities.”

ryan: Bingo.

cwick: So, this is just the 2008 financial crisis and Too Big to Fail all over again??? 

tchow:  I can’t wait to watch the Super League version of “Too Big to Fail.”

grace: Yes. Though in the case of Real Madrid and Barcelona, which are member-owned clubs, huge debts are the story rather than owners refusing to underwrite the teams.

ryan: Yeah, and you essentially get elected president of both clubs by promising to spend insane amounts of money on transfer fees.

grace: Of course, PSG is owned by a sovereign wealth fund and doesn’t need to have any of these concerns, which is presumably why it never signed up.

ryan: And the German clubs never signed up … because THEY WERE NEVER GOING TO SIGN UP. The 50+1 rule keeps the teams theoretically in the control of the fans, and as we’ve seen, fans hate this idea.

cwick: So, why can’t a bubble just pop in global soccer? The free-market economist in me says that salaries and transfer fees should fall as teams don’t have the money to support them. Is the problem that a few uber-rich teams (Man City, PSG, etc.) would just gobble up every good player with massive fees and so there really is a systemic imbalance that these smaller teams were falling prey to?

grace: This is what Financial Fair Play rules were supposed to resolve, and they have brought losses under control in a lot of cases, but clearly they didn’t solve the problem. The pandemic is the first time in decades that revenues have stopped rising. We’re in uncharted territory here.

cwick: Maybe let’s look at one ESL team as a case study that helps us understand the broader issues at play. And let’s choose Tottenham Hotspur, mostly just so we can talk about José Mourinho’s sacking.

grace: Tottenham took a £175 million loan from the British government last year, so things aren’t exactly wonderful for their finances.

ryan: And they opened up a huge, super-expensive stadium, and it’s just been sitting there, empty, for over a year now.

cwick: They have several generational talents and a history of competing for the top prizes, so they feel they need to push, push, push, and they hire an expensive coach to do it. And then the results are … mournful.

grace: A club like Spurs’ central issue is they’re on the cusp of making the Champions League every season but often don’t. So the Super League is very attractive since it guarantees the team that revenue every year.

ryan: Was the Spurs’ decision to hire Mourinho sort of symbolic of everything we’re talking about here? Wildly overpaying for something with only a vague idea of how the investment would pay itself back?

tchow: Someone much better at math than me should take a look at Tottenham’s 2020 fiscal reports. Its revenue dropped from £460.7 million in 2019 to £402.4 million in 2020, mainly due to COVID-19.

ryan: If Tottenham got to be a part of the ESL, it could’ve finished ninth in the Premier League every season and been stapled to the bottom of the ESL … and it would’ve been fine.

tchow: You picked a good team for this example, Chad. Teams like Spurs and Arsenal very clearly highlight the issues of the closed-league system proposed by the Super League. The biggest issue there being what Ryan just said: Why would you feel the need to be great when you can be mediocre and net about $400 million a season?

cwick: That explains a lot of executives’ job performances the world over, Tony.

grace: Spurs is always only a few poor seasons away from falling out of the Champions League picture entirely. “Fixing” things is obviously a good idea for them.

cwick: Emphasis on “fixing.”

As a quick aside, any thoughts on what really doomed Mourinho? Injuries hurt his first year. This year the team started hot and then had some really languid results.

grace: Mourinho had a perverse idea to just stop playing every time his team went 1-0 up and thus continued to concede chances and drop points.

grace: It seems like the usual Mourinho story we’re used to at this point: no real attacking structure, falls out with all the players, gets good results for a while before imploding. He just did it in two years this time rather than three.

tchow: Seventeen months.

ryan: It was a disaster — unattractive, fear-filled soccer. And for no good reason, he benched Dele Alli, who is one of the best young attackers in Premier League history.

grace: We know Spurs CEO Daniel Levy is very business-smart, and it’s impressive that he’s taken the club from midtable to being in the Super League conversation, but hiring Mourinho was just a total miss from him.

ryan: It was such an un-Levy move. I still don’t really understand it.

cwick: Let’s leave Mourinho behind and get back to the Super League plan as a whole. What actually doomed it? Rich people get to create lots of bad things all the time, so it’s not just that it was a bad plan, right? Was it the threat of bans from UEFA and FIFA (which were trying to protect their own revenue streams), the threat of government regulation (especially in the U.K.), the fan rebellion, the player rebellion, or all of the above?

tchow: In my opinion, the ultimate thing that doomed the Super League was the thing that fans couldn’t get over: the idea of the closed league. Having 12 (or 15) teams that would never be relegated was never going to fly.

grace: I would say it was a combination of fan rebellion and terrible PR. There was no pitch here. If the organizers had a clear line to sell to the fans, a majority would’ve still opposed, but they might have sold enough for it to get through.

ryan: It’s definitely all of the above. It’s pretty easy to look at this as an American and be like, “Uh, they wanna create the NFL. That’s sick!” But European soccer teams aren’t franchises like the New York Jets. There’s history, and there’s a devotion to at least some vague form of solidarity. There’s a degree of theoretical public ownership even for the literally private-owned teams that these dudes just did not understand.

grace: The organizers could have had more compromises in this plan. Relegation with large parachute payments could’ve been viable and workable in a business sense, for example. But they were so sure of their position, they didn’t consider any kind of competitive pyramid.

tchow: Since I started following soccer (which is not nearly as long as most people), there have been hints or whispers of a super league forming, and I seriously doubt this will be the last we hear of it. So what tips or pointers are these genius league creators going to take from this fiasco? Who knows! But I am absolutely certain someone will try to make this happen again.

cwick: I am a doubter that fans had much to do with this. Fans are pissed at rich owners all the time. (Important disclosure: I am a Mets fan.) It seems to me like the thing that doomed the Super League was money, since that’s what this was all about. I am not convinced that fans were really going to stop going to Man City games because they get to play the best players in the world more often. Rather, my take — and it’s a take! — is that the owners were spooked by two major threats: losing their labor force because of UEFA restrictions on international play for the players, and government regulation that could cut into their bottom lines.

tchow: Maybe I’m naive, but I didn’t take the UEFA threats about disqualifying players for the World Cup or Euros too seriously.

ryan: The fans definitely mattered! Fans made advertising on this competition toxic.

cwick: Liverpool owner John Henry says it was the fans that showed him the Super League couldn’t work. But, of course, he would.

grace: The other thing is the extent to which potential broadcast partners and even sponsors didn’t like this. We know brands today want to show us they share our values, and opposing this was the easiest way to do that.

cwick: So, where do things go from here? The Super League is dead. The Champions League rules will change somehow. The clubs remain in financial peril. The fans are emboldened. The governments are activated. But is there any reason to think anything will change? And who will do the changing?

grace: There’s a lot of talk in England about introducing a Germany-style rule that fans have to own more than half of clubs, but consider me skeptical this will happen.

ryan: I’m skeptical, too, but way less skeptical than I would’ve been four days ago.

grace: I still think the most likely scenario is the Champions League very gradually becomes more and more of a Super League-lite.

ryan: UEFA could go on the offensive here and try to democratize the way decisions are made and stop giving and giving in to the big clubs. It has leverage it has never had, but I’m not sure it’ll use it.

tchow: The fans, Chad! The fans will do the changing! Football is nothing without fans. Call me a romantic, but I genuinely believe that.

cwick: Tonyyyyyyyyy. Very sweet. But, to your earlier point, I think all the fans showed is that they don’t want closed leagues. There are lots of ways to get rich on open ones.

grace: The teams that win all the time are never beloved in any sport, but the weight of public opinion has never been more firmly against these clubs. Essentially, everything they want to do is going to be harder now.

ryan: Chad is wrong! The fans mattered here. And if these clubs were telling the truth, then something really does have to change. There are only so many more oligarchs and oil republics who can buy up teams to make finances irrelevant.

tchow: Essentially, no team, not even the biggest ones, can afford to be canceled.

cwick: Wow, I did not expect to be the most cynical among us! I have been following soccer for the fewest number of years!

ryan: Grace, I think this is where you make fun of him for being an American.

grace: The American website market is too lucrative for me to ever criticise my beloved friends across the pond.

tchow: [insert Grace newsletter subscription link here]

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