“It’s A Money Grab” – JPMorgan-Backed European Soccer ‘Super League’ Sparks Global Fury

“It’s A Money Grab” – JPMorgan-Backed European Soccer ‘Super League’ Sparks Global Fury

12 of world football’s soccer’s biggest and richest clubs announced Sunday they’ve formed a breakaway European “Super League” – with clubs Manchester United, Liverpool, Barcelona Real Madrid, Juventus and A.C. Milan among those to sign up. No German or French clubs have yet to be associated with the breakaway.

The breakaway league is due to start in August.

As Reuters reports, the clubs would share a fund of 3.5 billion euros ($4.19 billion) to spend on infrastructure projects and to deal with the impact of the COVID-19 pandemic. The money would not be available to spend on players.

“We will help football at every level and take it to its rightful place in the world. Football is the only global sport in the world with more than four billion fans and our responsibility as big clubs is to respond to their desires,” said Real Madrid president Florentino Perez, the first chairman of the Super League.

The move sets up a rival to UEFA’s established Champions League competition and was condemned by football authorities and political leaders.

UEFA issued a strong statement jointly with English, Spanish, and Italian leagues and football federations, saying they were ready to use “all measures” to confront any breakaway and saying any participating clubs would be banned from domestic leagues, such as the Premier League.

“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,” UEFA said.

We thank those clubs in other countries, especially the French and German clubs, who have refused to sign up to this. 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.”

World soccer’s governing body FIFA expressed its “disapproval to a ‘closed European breakaway league’ outside of the international football structures”.

French President Emmanuel Macron and UK Prime Minister Boris Johnson both issued statements condemning a breakaway and supporting UEFA’s position.

“The president of the republic welcomes the position of French clubs to refuse to participate to a European football Super League project that threatens the principle of solidarity and sporting merit,” the French presidency said in a statement sent to Reuters.

“Plans for a European Super League would be very damaging for football and we support football authorities in taking action,” Johnson wrote on Twitter.

“They would strike at the heart of the domestic game, and will concern fans across the country. The clubs involved must answer to their fans and the wider footballing community before taking any further steps.”

JPMorgan is bankrolling this biggest upheaval of European soccer since the 1950s in a 4 billion-euro ($4.8 billion) bet that has already drawn heavy criticism from fans, domestic leagues and politicians.

As Bloomberg reports, the clubs have signed a binding agreement to commit to remaining part of the Super League for a set number of years, according to people with knowledge of the agreement. The binding agreement was a key driver behind JPMorgan’s investment, the people added.

The financing from JPMorgan has been set at an interest rate of between 2% and 3%, and set over a 23-year time frame, one of the people added.

Finally, as Unherd.com’s Paul Marshall writes, portraying the feelings of many followers of the ‘beautiful game’, The European Super League is a betrayal of clubs and communities

There are many ironies to the plans for a European Super League. There is the inclusion of Arsenal, who have never won the Champions League, and on the day of the announcement stormed to a 1-1 draw with Fulham, cementing their position in ninth place in the Premier League. And Tottenham, who have never won the Champions League, never won the Premier League, and last lifted its predecessor, the First Division, in 1961. Or what about the exclusion of Leicester City — who won the Premier League in 2016 and have just qualified for the Final of the FA Cup — as well as Nottingham Forest, who have won the top European elite competition two times more than Arsenal and Spurs put together.

But the biggest irony is the attempt by a bunch of American owners to create a closed shop in European football. In the interest of money-making and in the name of laissez-faire capitalism, they want to drive competition out of European sport.

For those who never quite understood the motivations of the Glazers, John Henry or Stan Kroenke, the key is the parallel (or lack of parallel) between the Premier League and the way American sports operate. The American owners of Manchester United, Liverpool and Arsenal have always dreamed of replicating American conditions on European soil — and thus replicating the riches of NFL and Major League Baseball owners. The Glazers have done very well out of their NFL franchise, Tampa Bay Buccaneers, and John Henry out of the Boston Red Sox.

But American rules are very different from European ones. Professional sports leagues in North America operate with a fixed number of teams, known as franchises. The franchisees have territorial rights, usually covering a large metropolitan area exclusively. New teams may enter the competition only by a vote of current members. The leagues operate in a closed system and do not have to contend with the inconvenience of promotion or relegation. Very occasionally a league may decide to grow by admitting a new team, the last new team to join the NFL being the Houston Texans in 2002.

There is another fundamental difference between American sports and European football, and that is the way the transfer markets work. New players out of college in America are recruited through an annual draft. This is scrupulously fair, even egalitarian. The NFL draft is seven rounds long, with each team getting a pick in each round, in reverse order of the finish of that season. The worst team picks first, the second worst next and the champion picks last. But there is also a salary cap, which  places a limit on the amount of money a team can spend on salaries.

Although the original intention of this may have been to level the playing field, the effect has been to enrich the owners in a closed system where the surplus can only go to the owners or the players. The problem in Europe is that there is no cap on footballers’ salaries so that the players get to keep much more of the surplus. It also leads to a free-for-all in the transfer market, with new teams constantly vying to enter the top leagues and new owners trying to pour in money, which they can spend freely on transfers in order to buy success.

With precious few rules around ownership and suitability, the Premier League is a constant lure to questionable money, whether it be Middle Eastern sheiks or Russian kleptocrats, who know that with a big enough budget they can buy the top players and secure the prestige which comes with success. Cue Manchester City and Chelski, the parvenus of the Premier League.

The lack of entry barriers is not specific to Europe — there are plenty of new owners in the US, too. The difference is that in Europe, without any restrictions, owners with enough money can be almost assured of getting their hands on a trophy — and this is what brings us to the closed shop “Super League” proposed by the Group of Six. It is a protectionist money grab intended to ossify a momentary status quo in the interests of the current owners, preventing even richer club-owners from muscling in.

And of course it is much worse than that. Football clubs are not just capitalist enterprises. Indeed they should not be seen as capitalist enterprises at all.  The leading clubs have illustrious histories — some, like Liverpool and Manchester United, with more than a share of tragedy, redemption and heroism. Clubs have souls. They play in a certain way. Manchester United always have brilliant wingers, and the No 7 is a hallowed shirt. Great Liverpool teams are built on a bedrock of dominant central defenders.

Football clubs have their origins in working men’s clubs or factory teams, bringing together their local communities in shared support of their local side. In areas which have seen the downsides of globalisation, they are one of the last great symbols and anchors of local community, even if some have become global brands. They represent the sense of place. They enrich and unite their towns and cities. They give local pride.

This is no doubt why the German clubs have refused to take part. With its 50+1 model, the Bundesliga has created a much more balanced model for football club ownership, trying to achieve a balance between staying competitive financially while preserving the association with and respect for the local supporters.

It is no surprise that Boris Johnson came out so quickly against the Super League proposal. He may not be a football fan, but he understands intuitively that this is about much more than the game. It is about the ties that bind. It is also about the globalisation debate that defined Brexit. Unfortunately it may not be sufficient for the Prime Minister just to tweet on this.

I bear the scars of trying to challenge the Glazer takeover of Manchester United, through the Green and Gold campaign and the Red Knights. There is no way of regaining control of the club unless the owners want to sell, and the Glazers acquired control through a legitimate takeover process (albeit by saddling the club with huge debts). Private markets cannot rescue English clubs and it is fairly clear that the Premier League have no intention of challenging the current ownership model.

The only hope is that the latest proposal triggers a long-overdue review of football ownership rules in the UK, one that reconnects football clubs with their supporters, protects local communities and deters the predators from the other side of the Atlantic.

*  *  *

We give the final word to Rabobank’s Michael Every, who took time out from his daily note on global markets and goings on to exclaim – IT’S RED! A straight red card for Global Neoliberalism United – summing up the situation perfectly.

In short, the richest (if not most successful) clubs, and the world’s most famous players, are potentially about to walk away from the entire global system of football –including the quadrennial World Cup– to keep all of the global money in the game rather than sharing just a little of it with others: this is of course backed by Wall Street and private equity to the tune of USD8bn.

If my contempt shines through here – good. As a third generation fan of one of the teams on this breakaway list, whose mother was waved a mascot in the stands by his grandfather – I am out. I will never love another team, but I no longer care what happens to the next iteration of this one. And as for the neoliberal Beautiful Game, the real beauty is that if the USD9bn invested proves misspent because fans don’t want to watch sport like a movie trailer rather than a movie, then all involved will just call for the referee’s Fed card.

Tyler Durden
Mon, 04/19/2021 – 08:58

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