The Big Payday Floats To The Ground

Michael Hedges April 26, 2021 Follow on Twitter

There are so many smart people out there. Every opportunity can be turned into cryptocurrency, which is the post-modern measure of being smart. Little is left for folks just trying to get through the day and turn on the TV that evening to watch the favorite team. This isn’t too complicated. Sometimes smart people miss it.

Just one short week ago (April 18), Italian football club Juventus chairman Andrea Agnelli announced something called the European Super League had been formed. Several football teams signed up with more to follow. Matches would be televised to huge audiences because “inferior” teams would no longer be shown. Buckets of money would flow near and far. Huge bank JP Morgan pledged €3.5 billion for the start-up. Mr. Agnelli, heir to the Fiat fortune, has a strong relationship with that and other banks.

Within one major news cycle - about three days - the genius plan to upend European professional football turned more than sour. It was rancid. The rot of the plot - clear to all watching carefully - threatened anybody too close.

The plan at its heart would put a set of the best known teams into a “quasi-closed tournament,” wrote besoccer.com (April 24) on Wednesday night television and keep all the money among themselves. European football governing body UEFA would be cut out. Six English football teams signed on, including Chelsea, Liverpool and Manchester United. They were joined by Spanish teams Real Madrid, Barcelona and Atletico Madrid as well as Italian clubs Juventus, AC Milan and Inter Milan. It’s worth noting that no German or French football teams jumped the gun, though some were expected.

Back to television, where all this was hatched. Football TV rights fees in Europe have brought in far less money for national leagues and teams due to coronavirus lockdowns and increasing ambivalence from fans and sponsors. Sports bars have been closed, thus not spending on broadcast rights. At the end of March pay-TV sports broadcaster DAZN and pay-TV operator Sky negotiated about €130 million annual savings on rights fees from Italian Seria A league. The UK Premiere League was forced into to give rebates to rights holders Sky and Amazon, give up on its own pay-TV sports channel due to lack of interest and offer several matches to public broadcaster BBC. Now, the Premiere League is facing another rights renegotiation, reported the UK Telegraph (April 25). La Liga in Spain renegotiated the Mediapro portion of its football rights lower because sports bars balked at the fees.

Hence, leagues and teams are getting far less money from broadcasters, historically about 87% of their total revenue. Ticket sales account for less than 2%. The now-lifeless European Super League planned on big TV and streaming rights deals and, not to forget, cutting off smaller clubs.

Earliest reports in Italian sports daily Corriere dello Sport (April 18) about the TV-side of the European Super League suggest DAZN and its principal owner Len Blavatnik had been “involved” in the initial discussions, principally with financial giant JP Morgan, which became the principal underwriter. DAZN, reportedly, would pay US$3.5 billion. Rumblings of a new football league to challenge UEFA had been heard since January. Football clubs used this as a cudgel with UEFA for further organizational concessions.

In the end the European Super League crashed like hot air balloon. Potential rights holders DAZN and Sky along with Facebook and Amazon denied any knowledge of the deal or conversations there with. All the English Premier League teams backed out as fans, sports writers and, even, Prime Minister Boris Johnson heaped scorn. "We clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future," said a JP Morgan spokesperson, quoted by Reuters (April 23). "We will learn from this.”

“When all this passes, let’s see what happens,” said Real Madrid president Florentino Perez. “These clubs are going to lose millions and cannot do that, apart from those in England. Some league presidents and the president of UEFA were incredibly aggressive. I’ve never seen anything like it. It was orchestrated.” The “millions” in reference are, apparently, fees due from the clubs breaking a “binding contract.”

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