European soccer embraced multi-billion-euro deal, now it faces all-out war

Topics Soccer | Europe | football

UEFA is in talks with Centricus Asset Management over a $7.2 bn financing package to overhaul its flagship soccer tournament
European soccer is embroiled in an escalating multi-billion-euro battle for control of the continent’s most presti­gious club competition after a dozen teams declared themselves founding members of a breakaway league.

 

The announcement of the 4 billion euros ($4.8 billion) defection financed by JPMorgan Chase prompted an outcry from fans, governments and UEFA, European soccer’s governing body. In response, UEFA is now exploring a 6 billion euros financing proposal from UK-based asset manager Centricus to fund a revamped Champions League, people familiar with the matter said.

 

The confrontation reflects the evolution of the world’s most popular game as a global business, yet also the financial realities during the pandemic. Led by clubs from England, Italy and Spain, teams with vast fanbases and significant debts are seeking to squeeze more cash from broadcasting rights and underpin revenue after a year spent playing in empty stadiums.

 

Of the teams that have so far joined the JPMorgan-backed Super League, all but a few ended last season in the red and at least eight have net debt exceeding 100 million euros, according to accountancy firm KPMG. What comes next is likely to be some high-stakes brinkmanship. UEFA President Aleksander Ceferin branded the breakaway proposal a “spit in the face” for soccer supporters, while his organisation vowed to take all measures necessary—from turning to the courts to banning teams and players from international soccer tournaments—to stop the move. It could hinge on the prospect of money up front for indebted clubs, according to Kieran Maguire, a lecturer in football finance at Liverpool University in northwest England. “Poor financial management at some European clubs has forced them to generate advanced funds to help alleviate their debt situation,” he said. “Clubs will either achieve their objective from this competition or extract further income and certainty from UEFA.”

 

Centricus has been in talks with UEFA for a number of months regarding financing, a person familiar with the matter said. The investment firm discussed an initial package of about 4.2 billion euros, which was increased following the Super League proposal, the person said, asking not to be identified discu­ssing confidential information.

Negotiations are ongoing and there’s no certainty UEFA and London-based Centricus will reach an agreement, according to the people. A representative for Centricus declined to comment, while a spokesperson for UEFA didn’t immediately respond to a request for comment. UEFA will hold its annual congress on Tuesday.

 

In the background, though, is a plan by UEFA to expand the Champions League to 36 teams from 32 and increase the number of games. That has irked some teams complaining the season already has too many matches, while also diluting the number of games between the continent’s biggest attractions.

 

Indeed, the tug-of-war goes to the heart of soccer’s identity in the 21st century. Leading clubs with a rich history have spent recent decades embracing global capitalism, pay-TV deals and debt-fuelled foreign ownership. Local fans, meanwhile, have regularly complained of being priced out of the game they love and vented their fury at a move they see as an abandonment of soccer’s long-held traditions of open competition.

 

Moves to set up a breakaway European league started to strengthen as the pande­mic hit soccer hard, with the prospect of cancelations first prompting broadc­asters to seek rebates from clubs and governments reluctant to bail out those hit by declining matchday revenues. In total, the top 20 clubs have suffered at 2 billion euros hit from the pandemic, according to Deloitte. 

 

UK considers legal options to block  Super League

The UK said it is “unequivocal” in its oppo­sition to the proposed European breakaway soccer league, and is considering using legislation to block it.  “We don’t want this to go ahead in the current form,” UK PM Boris Johnson’s spokesman, Max Blain, told reporters. “We are exploring a range of options, including legislative ones.” Johns­on and Culture Secretary Oliver Dowden held a meeting with UK football authorities and fan groups, at which he said the govt supports all actions necessary to stop the proposed league from proceeding.



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