Soccer Super League plan starts one goal down
LONDON, April 19 (Reuters Breakingviews) - Europe’s proposed new soccer league would be the biggest upheaval in decades for the world’s most popular sport. Paradoxically, the JPMorgan-backed (JPM.N) breakaway may also be too modest to work.
From the point of view of soccer club owners like Liverpool’s John Henry, Manchester United’s (MANU.N) Glazer family and the Agnelli clan which controls Juventus (JUVE.MI), there’s a compelling financial logic to the Super League unveiled on Sunday. The new midweek competition would have guaranteed spots for its dozen founding clubs. That would ensure them a greater share of the spoils while removing the financial risk that they fail to qualify, as is currently the case with UEFA’s Champions League.
While unhappy fans may prefer a tournament based on pure sporting merit, the big clubs feel they deserve a bigger say. After all, global audiences from Seattle to Singapore tune in for stars like Barcelona’s Lionel Messi and Liverpool’s Mohamed Salah. Why shouldn’t those clubs control broadcast deals and sponsorships, which ultimately derive their value from their own investments in soccer talent?
The upside for those involved is clear. The league’s founding clubs will split an initial pot of 3.5 billion euros for committing to the tournament. That’s 233 million euros ($280 million) each, assuming Paris Saint-Germain and two others join the party. Little surprise, then, that shares in the $1.2 billion Juventus rose 14% on Monday morning.
Yet the spoils are hardly life-changing for a top side like Manchester United, which will bring in $900 million of revenue the season after next, using the median analyst estimate. The real money-spinner for most clubs, especially in England, remains domestic competitions like the Premier League. The Super League is designed to augment, rather than replace, those enduring cash cows.
That makes the support of the domestic competitions like the Premier League, Spain’s La Liga and Italy’s Serie A decisive. But they’ve resolutely opposed the Super League, even threatening to toss out participating clubs. Even if that’s hard to imagine, it shows that national soccer interests ultimately have the bargaining power. The new Super League is starting a goal down.
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CONTEXT NEWS
- Twelve of Europe’s biggest soccer clubs on April 18 announced plans to form a new breakaway “Super League”. The competition would replace UEFA's Champions League, but not the domestic leagues, and would involve midweek games played between August and May.
- It would have 20 participating teams in total, including 15 founding members and a further five slots available to other clubs depending on their performance in the previous year.
- The initial 12 founding clubs are AC Milan, Arsenal FC, Atlético de Madrid, Chelsea FC, FC Barcelona, FC Internazionale Milano, Juventus FC, Liverpool FC, Manchester City, Manchester United, Real Madrid CF and Tottenham Hotspur.
- Under the plans, the clubs would sign up to a new spending framework to guarantee a “sustainable financial foundation” and would receive an initial 3.5 billion euros in return for committing to the Super League.
- The league would be financed by U.S. bank JPMorgan.
- Soccer organisations including England’s Premier League, Spain’s La Liga and UEFA condemned the plan, which they called a “cynical project” in a joint April 18 statement.
- They said that “the clubs concerned will be banned from playing in any other competition at domestic, European or world level, and their players could be denied the opportunity to represent their national teams”.
- Shares in Juventus rose by 7% to 0.83 euros as of 0844 GMT on April 19. Shares in Manchester United rose by 5% in early pre-market trading, Reuters reported.
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