The Super League: An Inevitable Reality? Or a Billionaire's Dream?
On Sunday, 12 of the world's biggest clubs announced their plans to form a breakaway league. But according to one Dutch economist, the Super League could and should be deemed illegal.
|Ryan O'Hanlon||Apr 19||13|
Sure seems like soccer might’ve changed forever, huh?
On Sunday, a group of 12 European soccer clubs -- the traditional English Big Six, plus Real Madrid, Barcelona, Atletico Madrid, AC Milan, Inter Milan, and Juventus -- announced the creation of the Super League. Yes, they actually went with that name. Yes, four of those six English teams would not qualify for the next edition of the Champions League if the domestic season ended today. And no, it’s not any less ham-fisted than it initially appears.
To start, the idea is that there will be 15 or so permanent members -- plus five or so more temporary members, who could be promoted into or relegated out of the league -- competing in a league that would function roughly the same way the Champions League does: mid-week games between teams from across the continent. The proposed Super League is being underwritten by JP Morgan, and according to the Financial Times, each club would receive a so-called “welcome bonus” in the range of 200- to 300-million Euros. There have been rumors of a “super league” for the better part of 20 years, but it’s never gone this far.
It’s only a slight exaggeration to say that everyone hates the idea. Domestic leagues across Europe have issued statements disowning the formation of the mostly-closed Super League. Politicians across the continent have done the same. Supporters groups are outraged. Fans burned a Liverpool jersey before the team’s match against Leeds on Monday. A handful of players, most notably former Manchester United and current PSG midfielder Ander Hererra, have voiced their opposition as well.
The announcement of the Super League came, uncoincidentally, a day before UEFA was expected to vote on an expansion of the Champions League, which would give the biggest teams in the world what they wanted: more games against each other. Last month, Juventus chairman Andrea Agnelli, then also chairman of the European Club Association, called the proposed changes “ideal”. These were the kind of updates that the threat of a super league theoretically compelled UEFA to make -- and now Agnelli is out of the ECA and off attempting to form his own league.
On Monday morning, UEFA still went through with its meeting and voted to ratify the expanded Champions League structure. Speaking at a press conference afterward, UEFA president Aleksander Ceferin called the Super League “a spit in the face of all football lovers.” He went on to say: “Andrea Agnelli is the biggest disappointment of all, I’ve never seen a person that would lie so many times, so persistently as he did. It’s unbelievable.” It should be noted that Ceferin is the godfather to one of Agnelli’s daughters. The UEFA president added: “We didn’t know we had snakes working close to us, but now we know”. UEFA has said that players participating in the Super League will be ineligible to play in either the World Cup and the European championships. And one UEFA member has even claimed that Manchester City, Chelsea, and Madrid could all be expelled from this year’s Champions League.
Joining Ceferin and fans across the Europe in opposition to the Super League were the likes of Sky Sports, which was the main broadcasting driver in the rapid commercialization of the Premier League and the sport as a whole, Bayern Munich, affectionately known as “FC Hollywood”, and RB Leipzig, which is a soccer team that doubles as the primary marketing arm of a billion-dollar energy drink company. Paris Saint-Germain, funded by the trillion-dollar Qatari sovereign wealth fund, also appear to be in opposition to the Super League, but they haven’t been quite as public about it. The war over the capital produced by the world’s most popular sport makes for strange bedfellows, I guess.
Despite the wild furor up and down the ladder of the soccer world, the existence of a terrible website, the backing of JP Morgan, and the announcement by all 12 clubs, I’m still not convinced that this actually happens. Some people I’ve spoken to who work with European clubs agree. And if it did actually happen, I don’t see many positive outcomes. Soccer badly needs structural change, but not this one. With it, much of the soccer world would quickly be rendered irrelevant, and even if these Super League teams did continue to play in their domestic leagues on weekends, they’d have an even bigger advantage over their competitors than before -- and the advantage would persist, regardless of how the team performed. All clubs outside of the Super League would immediately be way less valuable than they currently are, and they’d struggle to attract new ownership and pay competitive wages. Plus, I’m not sure the Super League itself would even be successful in the long run. Research has shown that promotion and relegation actually increases fan interest and commercial appeal in sporting competitions. And I do think that one of the reasons the Champions League is attractive is because of its scarcity. Getting to see a top club from Spain take on the defending champs from England feels special because it only happens once a year. Will the same massive fanbase that flocks to the Champions League really still feel that way, watching AC Milan and Arsenal duke it out for 18th place in the Super League, year after year after year? As far as I can tell, there are only about 12 or so people who actually do.
But beyond all of that, there’s another pretty simple reason why we might not ever actually see the Super League play any games: it might not be legal. Back in December, the Dutch economist Tsjalle van der Burg published an incredibly prescient paper in the journal Managing Sport and Leisure, titled “EU competition law, football and national markets”. In it, he makes a clear-eyed argument for why the creation of a super league just like the Super League -- they really went with that name, huh? -- would violate EU competition law and how such a thing could compel the European Commission to intervene. I talked to Tsjalle on Monday, and our chat has been edited for clarity.
As an American, I’m used to a closed system where 30 teams get all the profits, but across the rest of the world, sports just don’t work like that. So, what was your initial reaction upon seeing the Super League news?
Well, the difference between Europe and the U.S. is first of all, that we do have competition law, whereas in the U.S., baseball was exempt from competition law since 1960 or so, which is weird. But fortunately, in Europe, competition law doesn't have any exception for football. This Super League is not fundamentally different from the proposals for a super league we had before. Of course, the number of clubs is a bit different, and so on. But it's basically a breakaway Super League like all the other ones. It's straightly going against European competition law. So there can be only one reaction of the European Commission, which is to forbid it. And if it doesn't forbid it, people can go to the European Court, which will then forbid it. But the European Commission should forbid it. It should apply the law.
Of course, a scientist should always say his conclusions can be wrong. But I would like to make a bet with you with the odds being fully in your favor. If the case comes in front of the court or the European Commission, it will forbid this breakaway Super League. That's my view. But it's based on scientific arguments, although there should be some doubt according to scientific standards.
Can you explain in a little more detail why this would violate competition law?
Well, just look at a 7-year-old child in the Netherlands. He's soon going to become a fan of a club. His preferences will be: "I want to be a fan of a Dutch club, not an English club. And I want to be a fan of a club that wins important prizes." Now, if only Ajax was in the Super League front he Netherlands, then Ajax is the only Dutch club left who can win important European prizes. So the boy in the middle of the Netherlands who wants a Dutch club which can win important prizes has one choice only: Ajax, which means that Ajax has a monopoly in the Netherlands on top level football, which means it can increase its prices at the stadium. The waiting list for the stadium will be much longer, so they can increase the prices still further. They can charge higher prices for their TV pictures and so on. So it's a monopoly with the normal effect of a monopoly: higher prices for the consumers. And so, the Super League is reducing competition in the Netherlands.
European competition law aims to prevent higher prices. And it also aims to protect quality for the fans or for the consumers. And if you see the reactions of all football fans throughout Europe, they do not believe that the quality of the product is improving. The aims of competition law are increasing welfare through lower prices and higher quality of products, but of course, you cannot forbid the league on the basis of the aims of the law only. But if you look at the law itself, it clearly says that agreements between companies which reduce competition are forbidden. And according to European competition law -- this is accepted by all legal scholars -- professional football clubs are companies.
For the European Commission, and I think all legal scholars acknowledge that the relevant market — this is both legal and an economic concept — the relevant market is the national market. When you look at the effects of the Super League on competition on national markets, it will be very bad.
All of what you’re saying is very clear and makes basic, obvious sense. But the creators of the Super League must be aware of all this. Could this be why the rumored structure is to have both permanent and temporary members? The founding clubs get to lock in their revenue forever, but the couple spots for promotion-relegation might satisfy the competition-law requirements?
One argument is that they say, "Wait a moment. UEFA have a monopoly in organizing competitions or European competitions. So we are going to the market of organizing competition”. This has been seriously discussed in the legal literature. And if you look at the letter of the law, they are right. But there’s a legal scholar from England, Katarina Pijetlovic, and she has refuted this argument. There have been rival leagues to the major leagues in the U.S., but it has always ended in either one of the two leagues winning and the other going bankrupt or in a merger, so the final outcome is always a monopoly. And that is exactly what is good for the fans.
My view is that I'm looking not at the market for organizing competitions, but at the market for consumers. If you look at the Super League, UEFA has had problems but it is a better organizer than a profit organization like perhaps Amazon or whoever is going to be the organizer. Plus, the argument which relates to consumer markets must be more important than any arguments relating to some of the intermediate markets like the market for organizing competitions. As long as you can argue that for the consumers, the Super League is not very good, then the argument that UEFA is having a monopoly is not really sensible.
As for your argument, legal scholars said we could have a Super League only if there is promotion and relegation. But I don't think so. It would improve the situation just a tiny bit. You will get a situation which is equal to the situation in the Netherlands and in England: the promoted clubs will get some additional money, but they are not really able to compete with the big clubs in that league. Possibly, within a few years they will be relegated altogether.
A lot of these arguments feel like they apply to the current structure of the game -- and not only the explicit creation of a Super League. If the European Commission does step in, then the idea of the Super League dies, both in practice and in theory. Clubs can’t keep using a breakaway league as means to gain leverage within the competitions that already exist, and maybe the voting processes within UEFA and within these domestic leagues might become more democractic, with each member exerting equal power.. So, why don’t you think the European Commission has stepped in already? Why might they not step in?
I think we're talking about an idea, which is so simple that many people have neglected it. Well it's on the one hand simple, but you also need to combine legal and economic aspects, which is time consuming. Moreover, economists are in a race for publications. To gain advantage there, most of them think that they have to have more advanced, or in other words, difficult analysis than their predecessors. So in the developments in economic science, you see many very complicated mathematical analysis, which neglect very often very simple points. And I think something like that has happened here.
The effect on the players has been noticeably absent from all of the discussions over the past few days. What kind of economic impact might the Super League have on players, especially players outside of the 400 or so guys -- 20 players, 20 teams -- just outside of this realm?
I guess it will be negative for two reasons. First of all, football will become less popular, especially in the lower rankings below the Super League. And secondly, at present many clubs which are not in the top 20 try to become part of the top 20. There's a big race. So even salaries at a club like mine, Feyenoord, are still very high. Presently, the competition between clubs is big -- and that is always good for the players. The lower the competition between the clubs, the worse it is for the lower ranked players.