After beating a retreat back in 2019, certain European clubs have hired the PR company A22 to reinvigorate their previously failed attempt as a European Super League.
Football money comes from bums on seats, smart marketing and TV rights. A22 see TV rights as the sliver bullet to redistribute the growing power and influence of the Premier League, which all the rest of the European Leagues look on with envy or awe, depending on your view.
Fundamental problems (the actual problem)
Outside of the pazzazz of A22’s PR spinning, there are serious troubles of some of the other European Leagues should not be overlooked as a very fundamental problem endangering the future of football in some quarters. How some top national leagues generate enough money to keep themselves all going is increasingly an issue.
For example the German Bundesliga clubs currently run to a collective loss of about 200m EUR a year before revenues from overseas purchases for their players are added in. These purchases are mainly by English clubs, well certainly the important ones, where they are getting much more than they would from another German club.
What are A22 now proposing?
A22 are light on details, but what they have proposed is a ‘minimum of 14 games each’ on top of the domestic league, to involve 60-80 teams across Europe.
If you get to the final of the Champions League, you play 10 games. For the Europa League there is 1 extra game (they have a round of 32 after the group stage). So nearly all clubs play many less games than these numbers.
Why does it not make any sense?
To me, this raises 4 very key problems for A22:
There are already too many games in a season, adding in more is not in the interests of the players and their health at all, which in turn just causes anxiety for clubs and their supporters
We already have a European structure that involves more that 80 teams (94 teams are in the Europa League 1st qualifying round, and the Champions League has 80 teams involved at various stages), so this is actually more elitist that the existing system
TV rights are already very lucrative for European football and maybe the money might get slightly smoothed out, but the power of the Premier League does not really come from European TV rights, it comes from the Premier League’s fantastic marketing machine, it’s global appeal and reach, super rich investors being drawn to the excitement and value, and the huge TV deals with Sky, BT Sport and Amazon as well as overseas.
This will not change the unique balance the Premier League has where anyone can beat anyone on a given gameday (demonstrated by recent results with ManCity, Arsenal and consistently with superpower teams Liverpool and Chelsea all season). Nor will it change the DNA of very exciting Premiership football on display (the Spanish league being the only other major league that comes close, but does not have the depth of team strength in the league). This mixed in with amazing marketing gives the Premiership its huge appeal.
Who are supposedly behind A22?
A22 deny it, but it seems that the same core 3 members of the failed original push for a super league a couple years ago are still at it. These clubs are Barcelona, Juventus and Real Madrid.
But what is interesting is taking a quick look at these three clubs and their own motivations, rather than the very slick PR that A22 now bring to the table as their shiny new front.
Barcelona break themselves
Barcelona should have been the example to everyone as the football club model with their businesses built around the club, but again chasing dreams with ludicrous wage bills and buying stellar players meant they clocked up debts of 1.35bn EUR by the end of last season. At that stage player wages were 103% of revenue. How on earth is that sustainable or even sensible???
They further compounded the problem by extreme short-sightedness. What they should have done was sell some players, especially the ones on huge wages. But pride is a dangerous thing, and what they actually did was:
1) Spend 160m EUR on new players last close season. Yes, not huge for the Premiership, but huge for the other leagues given Chelsea’s £600m outlay was more than all the spend by the major European leagues, which includes Barcelona.
2) Sell 2 tranches of their TV rights revenue stream. This gave them 667m EUR in as one off revenue, but they have now lost 25% of their TV revenue for 25 years. As mentioned above, TV rights are a material part of revenue…oh dear.
3) Sell 25% of their TV production company for 100m EUR. This is extra business revenue, and is a guaranteed money maker every year. But 25% of that revenue is gone forever (maybe they can buy it back later, but if they were successful enough, why would the current shareholders sell it back unless for a huge markup…?).
So they did not even clear half their debt, but have hugely reduced their revenue and cashflow for at least the next ¼ of a century. This club has no sound financial governance in place.
Juventus’ corrupt underbelly (allegedly…!)
I remember growing up looking up to Juventus and the glory of their football. But what has since followed is a succession of corruption that epitomises Italian football, and why just proving pouring more money to Serie A will not simply solve their problems.
The very recent 15 point deduction for ‘alleged financial irregularities and false accounting’ is breaking whilst they are trying to cook up this break away league again. This is after the entire Board resigned last November for alleged false accounting and market manipulation. They also published a loss of 220m EUR for last season, which is the highest loss in their history.
But what is astonishing, and demonstrated the systemic corruption within the Italian football system, is that they did not learn from ‘Calciopoli’, the huge scandal uncovered in 2006. This scandal involved clubs, executives, Italian football bodies (!) as well as some referees and other officials, and they stood accused of ‘finding favourable referees’, which in plain English is alleged match fixing. A host of Series A clubs were implicated, as well as some Series B clubs. Such was the extent of the scandal and their own involvement, Juventus were actually stripped of their 2004/5 title and forcefully relegated at the end of the 2005/6 season. How does a club not learn from that unless it has a systematic corruption and governance problem?
Real Madrid and their megalomaniac President
On the outside, Real Madrid are the stable iconic club in Spain compared to all the financial issues Barcelona have. They actually have more cash reserves than debt, something most clubs will struggle to emulate at the moment.
But behind all of this is Florentino Perez. Real Madrid is actually owned by the fans, with over 80,000 socios (Partners). But to be President, you need to have deposit a guarantee for 15% of the club’s annual budget, which is why he has led activities for two decades there.
His decisions with the club are solely to further his personal power and finances, separate from the club, as many an investigative journalist has delved into. They key to it all is the fact he is majority shareholder of ACS, one of the largest construction conglomerates globally. He acquired this shareholding through funding from the Madrid’s politically controlled bank. What follows is a series of transactions that are linked to Real Madrid that simply further the profits of ACS, and thus Perez himself.
Public land gifted to the club for non-commercial purposes was rightly used to house their training facilities. Upon becoming president, he used his political influence to sell of the facilities (for 500m EUR) to create a new financial district (overturning protective zoning laws that appeared to be previously impenetrable). Yes it did clear off the clubs debts, but the construction contracts went to who…yes, you guessed it: ACS. The extra cash was the war chest that started off his obsession with the ‘Galacticos’ of Real Madrid.
Then came the amazing coincidental deals of Real Madrid spending huge amounts of money to buy players at the same time as ACS was winning huge contracts from the respective governments. Huge contract won from the Columbian government when James Rodriguez was being bought, same with the Mexican government when Javier Hernandez was purchased, and the Costa Rican government when Keylor Navas was acquired.
So all Perez wants is more power, influence and money to leverage Real Madrid, and most likely the new European football governing body (if they are successful) to do his bidding for ACS’s and his direct huge gain.
To me, what the above shows is that two of these three clubs have managed to break themselves all by their own, and now want a bail out. The other just wants more money, power and influence (well it’s all powerful President does). Sadly the issues above are deeply rooted governance issues at each of their clubs, and just throwing more TV money at them will not really fix them.
How can you trust A22, when they are just the PR front to the extremely flawed senior executives laid out above?
What do you think of A22 and the clubs linked to them?
But on a very serious note, the example of the Bundesliga show that it is the responsibility of the football associations of each country to try and generate more interest in their leagues and drive up the pot of money that is available to all the clubs in that league, not as A22 want to do and just generate more money for the top clubs from each league (not far off the current model under UEFA).
Just watching an English team play slightly more foreign teams is not going to get me suddenly more interested in watching games from their leagues. As much as A22 say they are part of the solution, they really are not. They (the clubs behind directing A22) just want to control the European purse strings involving less clubs than currently.
How do you think these serious fundamental issues can start to be resolved?
Commentaires