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.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.