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    JUVE   IT0000336518


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The European Super League: The League That Never Was

06/07/2021 | 12:10pm EDT

The founder members of the European Super League issued a mission statement on the announcement of its creation on Sunday 18 April 2021. In essence, this new league, governed by its founding clubs, would revolve around mid-week competition with the goal of improving the quality of existing European competitions and creating a format for top clubs and players to compete on a regular basis.

A less substantial and opaque review of how the competition would operate in practice followed, along with a short sentence stating that all the ESL member clubs would remain in their domestic leagues. The statement was also accompanied by the assurance that a series of alleged legal manoeuvres had been taken to ensure that the ESL could not be thwarted by either domestic league or UEFA actions.

The forthright assertions of the ESL were that they had taken legal advice and were ready for anything that any sporting organisation could throw at them.

By the morning of Wednesday 21 April, all six English Premier League clubs involved in the founding of the ESL had announced that they were withdrawing from the league. Abroad, FC Barcelona had announced that they had never totally signed up as they had to pass the motion by their membership under their constitution, and Andrea Agnelli (chairman of Juventus) announced that the ESL could not continue in its current format.

The intervening 48 hours were a fascinating mix of drama, tragi-comedy and realpolitik that coalesced to totally swamp the ESL and effectively end it before it had begun - it was the league that never was.

How was the ESL taken down?

The ESL would have taken legal advice in relation to their membership of its founders' domestic leagues, the operation of an effective cartel within (and without) the European Union and the various regulatory and competition statutory frameworks that they would have to operate within.

What legal, commercial and marketing counsel could not have foreseen was the total unification of FIFA, UEFA, the individual domestic leagues, national Governments (and opposition parties), the players, and finally the supporters in their absolute fury and condemnation of every aspect of the ESL.

The English clubs faced calls from the Prime Minister to reflect and review their decisions. Boris Johnson told the public that every option open to the Government would be reviewed and that action would ultimately be taken. This, combined with the outpouring of anger from all of football's stakeholders, ultimately made it virtually impossible to remain a member of the ESL. As a result, the ESL project is in tatters and all parties involved in this affair are considering next steps.

Now what?

The ESL was formed for disparate reasons, but head and shoulders above all else was the appeal of financial revenues. By employing the American sports model of regional franchises, the ESL planned on taking away the ghoulish spectre of not qualifying for the UEFA Champions League by removing relegation as a possibility for member clubs. 

There were other financial reasons. It is well documented that the Spanish clubs who have long regarded themselves as the aristocratic dynasties of international football have become impoverished in their efforts to keep pace with football clubs (Manchester City, Paris St Germain, for example) who are owned by the oligarchs of nation states. The latest figures showed that Barcelona's net debt more than doubled to €488 million in the year to last June while for Real Madrid, the figure was €354.3 million. Juventus's net debt was €357.8 million while for Milan it was €103.9 million. The English clubs also have concerns. Manchester United accounts show its debt as Ł455.5 million while Tottenham had net debt of Ł604.6 million and Arsenal's net debt more than doubled to Ł108.2 million. The promise of controlling revenue streams and bringing some order to what has been a period of terrifying instability during the pandemic appealed to those in control at the ESL clubs.

But there were other reasons as well, reasons that UEFA and FIFA have been well aware of. The metrics that have been disparaged by many commentators over the past 48 hours still hold true: people under the age of 20 - and many older, for that matter - do not watch 90 minutes of football matches because they find it boring. The very group games in the UEFA competition that have been expanded for the new format Champions League are, ironically, a 'turn off' to the very market targeted by club financiers.

This is exacerbated by the fallout from a tumultuous year. The finances of Europe's elite sides have suffered as matches were forced to be played behind closed doors due to pandemic restrictions and clubs had to pay rebates to broadcasters over interrupted schedules whilst still paying players' wages and debt.

The bigger picture

To say football's economic model is faltering is a wild understatement. It is a house of cards being buffeted by a hurricane of ever increasing financial outlay, diminishing returns and a market tormented by a global pandemic. How does a club with a broad membership compete with a club sponsored by, effectively, a city state with the requisite finances they have to hand? How do UEFA and FIFA seek to maintain the sporting integrity of the football they govern with the widening disparities that they have failed to address in the past 30 years?

This is where the story for the English clubs could take a twist following the well observed dictum of the 'law of unintended consequences'. Boris Johnson has observed in the past 48 hours that Premier League football clubs have become the "playthings of bankers" and that the Government has vowed to press ahead with regulatory reform of football in England and Wales. This could mean an overarching regulator overseeing every aspect of the game and legislative constraints being put on the ownership of clubs and how the Premier League itself operates. Models of ownership such as the Bundesliga "50+1 rule" which requires the parent club to own at least 50% plus one additional share of the football company, ensuring that the club's members still hold a majority of voting rights is being viewed enthusiastically by many who want reform not just of the six, but of football in its entirety in England. 

It is far too early to say exactly what any review of football in England would entail - and how it would be implemented but one thing is for certain: no-one thinks this one is over. Indeed the game is very much afoot.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Matt Bosworth
Russell-Cooke Solicitors
2 Putney Hill
SW15 6AB

© Mondaq Ltd, 2021 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source Business Briefing

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