Europe Short Read

European Super League: A money making scheme?

Over the past century, football has cemented its place as the most popular sport in the world. It now commands the interest, loyalty and engagement of more people than ever before and continues to grow bigger. ‘In the three most populous nations on earth – China, India and the United States – where football existed on the periphery of society, it has now arrived for good’. Such growth has meant that there is now more money in football than ever before. Yet  European clubs are still looking for ways to increase revenue. In early February, German newspaper ‘Der Spiegel’ published an article, showing that top European clubs have held secret talks to create a European Super League. The new competition, it is claimed, would involve 11 of Europe’s biggest clubs along with 5 “initial guests”. This idea has been backed by many football club presidents, owners and players. For example, in July 2009 Florentino Perez criticised the current Champions League saying, ‘we have to agree a European Super League which guarantees the best always play the best’. This change might well improve the standard of football played but would it make economic sense to have a European Super League?

For many football clubs matchday revenue is a large part of their income. FC Barcelona’s revenue this season is their highest ever at €840.8m compared to their 2015 revenue of€561m, 19% (€159.2m) of which came from matchday revenue. In 2015 this figure was significantly less, standing at €117m. In a European Super League, the glamorous nature of the teams involved would mean matches would inevitably sell out. Therefore, clubs could raise ticket prices in response to the increased demand. Yet, higher ticket prices might not be the best way forward. Tottenham Hotspur made €92.5m from matchdays in 2018/19 season, part of this was due to their new mega stadium which is able to host NFL games. Realistically though, high-level European clubs will only use their stadiums for football matches 25 days a year. Therefore, employing a strategy similar to Tottenham would be a more effective way of improving matchday revenue. Furthermore, the more events the stadium hosts, the more money it can make from food and drink sales. Overall, ticketing prices in a European Super League could be increased but this alone would not be enough to balance out the possibility of alienating fans who want to keep the status quo, considering that there are better ways to raise matchday revenues.

Another attraction of a super league is global merchandising opportunities. In the USA, kids are able to watch the best football players in the world with a few clicks on their computer. Moreover, the rise of video games like FIFA has brought new fans to the sport. The new generation want to be able to watch a high level of technical competence, not a low level league which the MLS offers. The same situation is currently occurring in China and India. This is why the best European teams go on lucrative summer tours to these three countries where football is on the rise, and from a commercial point of view it is a new market to exploit. In these countries, many fans support a player, not a club. For example, when Ronaldo joined Juventus in the summer of 2018, $60m were made from shirt sales in the following 24hrs. Ronaldo alone has more Instagram followers than Real Madrid and Barcelona combined, meaning players are no longer just bought for their ability on the football pitch but as a marketing tool, too. A European Super League would likely have a monopoly on the world’s favourite players and merchandise sales would reach levels never seen before.

In addition, there is a changing dynamic surrounding football: it is no longer just a working-class sport. This can be proved by football clubs’ sponsors. Chelsea are now sponsored by brands like Hublot and Audi, high-end sponsors. As a result, their commercial revenue in 2018/19 was €210.4m,  41% of their revenue that season. These sponsors lead to more affluent clients and therefore potential to make more money from hospitality packages. With a European Super League, sponsorship deals would become even more valuable because the brands would now be seen by billions around the world.

Yet, perhaps the strongest argument for a super league is the money it would attract from TV companies. FC Barcelona’s broadcasting revenue increased by 34% this season to €75.1m. In 2018, Sky secured the rights to 128 Premier League games for £3.85billion and BT Sport secured 96 games for £885m. With a European Super League, the demand would be huge with rights being sold on lots of different platforms across the globe. An article by Talksport on the 2018/19 season showed that Huddersfield, who finished bottom of the Premier League, still earned around £96.5m from broadcasting. Man City, who finished top of the league that season earned just under £151m. Just imagine what the broadcasting revenue that a European Super League club containing clubs the size of Real Madrid and Juventus would generate. Television contracts would most likely become the biggest source of income for European Super League clubs.

A capped league (i.e. one without promotion or relegation) would allow the participating clubs to achieve profit levels never seen before. Yet, although economically a European Super League would produce much more revenue, there could be a backlash from fans who feel profit is being put before competition on the pitch. That said, it is hard to imagine that such matches would not sell out. Furthermore, the real money will come from commercial and broadcasting revenue. Exploiting China, India and the U.S will be the gateway to making a European Super League produce revenue never seen before in sporting history.

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