What a wild week within the wonderful world of soccer!
While there has always been talk of a “super league” throughout the years, I never thought I would see one, other than the UCL. Yet, the pandemic’s impact still continues to be felt and the Super League creation and 48 hour implosion (even if some of the 12 still think it exists) was all about the money. In no particular order, here are a few thoughts:
- Yes, there was an American influence. American sports play in a closed system. Without a 3,000 word response on the pros and cons of a closed system, one of its unique factors is a significantly more consistent income stream than the promotion/relegation – UCL/Europa – non-salary cap model common in Europe. The super league teams were looking for a guaranteed income stream – period.
- The assumption was… these teams thought they could keep their other current income streams constant and just “add” this new Super League money to their balance sheet. We often talk in class about Theory X vs. Theory Y leadership models in this bottom up world where the crowd is control. This was a Theory X top-down move and the bottom up crowd (fans, leagues, and even politicians) were not having it.
- Financially speaking, some of these super teams are is super deep financial trouble, specifically Real Madrid and Juventus. When it comes to income streams, TV money is always the biggest piece of the pie. The Premier League TV deal is vastly higher (approx. 4.2 billion) than either La Liga (2.1 billion) or Serie A (around 2 billion). Juventus is a publicly traded company. Real Madrid did not make a single signing over the past two transfer windows. This is Real Madrid we’re talking about! There is no way the Italian or Spanish teams can financially keep up with the six teams from the Premier League, especially considering the next two largest income streams are down significantly; sponsorships (mostly down since the game day experience is non-existent) and game day revenue (also practically non-existent).
- Of course the Premier Leagues teams pulled out first. They had the most to lose! When even the smallest possibility arose that the Premier League teams might have their traditional revenue streams impacted (that TV deal and UCL/Europa income), then the super league money was not as “worth it” as previously thought.
- Yes, fans, politicians, and the leagues spoke up and it was nice to see the power of the crowd but the decision to pull out of the super league was all about the money… first.
- By pulling out of the super league, the Premier League teams actually hurt their Spanish and Italian competitors more than a win on the field. These teams needed the Super League cash infusion to keep their clubs running at the highest level.
- Will there be any UEFA sanctions or penalties on the 12 breakaway teams? To be direct, I really don’t know, nor can I imagine what the penalties would be. Points? UEFA as publicly stated that consequences are coming but at the same time, UEFA needs these clubs in the UCL just as much as the 12 need the UCL revenue. If anything, the severity of any sanctions should be weighted; the 6 Premier League teams with the lightest penalties. Meanwhile, a team like Real Madrid, whose President Florentino Perez still believes the 12 are still in, could face the most severe consequences: “I don’t need to explain what a binding contract is, but effectively the clubs cannot leave.”
In closing, do I feel this Super League action would have occurred if not for the pandemic? No! The announcement was poorly organized, the logo was not professionally created and it seems none of the coaches, players or staff were in the know on this effort. These teams are financially stressed and were looking for an easy way out. Fortunately for us fans, they are not going to get it.
Daniel M. Ladik, Ph.D.,
Associate Professor of Marketing
Methodologist, Seton Hall Sports Poll
Stillman School of Business
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