European Super League
Posted by John Vrooman on Tuesday, September 13, 2016 in UEFA Football.
Interview with La Stampa (Turin)
I read some of your publications on a future of European Football Super League. In recent days, Agnelli (Juventus) and Rummenigge (Bayern) have spoken about it: I want to know what you think about.
It would be a good solution the creation of a European Football Super League?
Yes, a European Super League would simply formalize the group stage of UEFA Champions League as a de facto Super League that has already evolved both politically and economically throughout European football. The relative magnitude of Champions League revenues has virtually separated the perennially contending clubs from their respective domestic leagues and further polarized revenues, wages, talent and competition in the process.
Above is a link and quote from the conclusion of my 2007 paper on the unification of European Football written more than a decade ago, and it is still true today.
There is good news and bad news for the theory and reality of European football. The bad news is that European leagues are being torn apart, as if by continental drift, but the good news is that something can be done about it. The cause of the great schism in European football is not the underlying continental super-league drift, but rather the ceremonial resistance of its governing agencies UEFA and FIFA that are trying to stop it.
The economic solution is to allow the top tier of European football to naturally break away, and then horizontally reunite the politically divided base with open international leagues throughout the European Union. This is not ugly ‘Americanization’ or greed over grass roots: it is rather the Europeanization of European Football. UEFA consistently blames the Bosman (free agency) decision for the great divide between rich and poor clubs in Europe, but Bosman is not the problem at all, it is rather the first part of the solution.
The Bosman (free agency) decision has opened European labor markets, which now expose gross asymmetry between one labor market and several segregated domestic leagues. The solution is not to retry Bosman in the court of public opinion, but rather to open domestic leagues to the inevitable future of international club leagues.
UEFA’s self-proclaimed motto is ‘we care about football’. In the final analysis, everyone cares about football – it transcends politics and culture. The world’s game unifies us all, and that is the beauty of it.
NFL or MLS can be a model?
The business model for the Super League would probably combine the best egalitarian aspects of the National Football League and favorable promotion/relegation customs of European Football leagues. Extensive revenue sharing, particularly 100 percent of media rights fees has made the NFL a fully diversified risk free portfolio. As a result the NFL with $13 billion in revenues has become the most egalitarian, and yet most powerful sports league in the world.
The new Euro Super League (ESL) should probably share media revenue at least the current 50 percent solidarity/50 percent merit plan currently being implemented in the Big Five European Leagues. Membership in the League should also be closed to some degree to create a favorable climate for payment of franchise fees.
The membership fees would approximate the present value of the difference between the expected cash flow of the mid-market revenue clubs (positive revenue sharing transfer) and the average large market clubs to compensate the large market clubs for a negative revenue sharing transfer. The membership fee should also be set so as to limit the super league to about 30 slots that are allocated based on willingness and ability to pay the fee.
In my original 2006 proposal the Euro Super League was a closed membership of 30 clubs divided into 3 divisions (with apologies to Serie A for the 2006 omission of Napoli and Fiorentina). Each club would play 18 home and away matches within their division and one match with each of the remaining 20 clubs in the other two divisions for a familiar European schedule of 38 matches.
The weakness of the original 2006 proposal in particular, and North American closed membership sports leagues in general is the absence of the competitive incentive provided by promotion/relegation. Integration of the risk reduction of a closed league and the competition incentive of promotion/relegation could be accomplished if the 3 division Super League of 30 clubs was instead comprised of two senior premier divisions one secondary relegation division of ten sides each.
So financially the closed League could still be comprised of 30 clubs but the premier league would only have 20 clubs with a promotion/relegation relationship of 2 or 3 clubs with the third division. Membership would be market determined by a club’s willingness and ability to pay the indemnity fee reflecting the relative differences in franchise values.
The current North American MLS single entity business model is and probably will always be problematic and restrictive of quality of play in North American soccer. MLS is currently rapidly expanding to 24 clubs with plans of going to 28 by 2022. One of the major weaknesses of the what seems to be the current MLS financial pyramid scheme is the absence of an actual promotion/relegation player development pyramid. This debilitating weakness for the future of NA soccer could be addressed if MLS were to expand to 30 clubs and follow the basic ESL 20/10 club format outlined above.
Because the european big clubs want create it?
The demand for a European Super League is and always has been a self-serving political creation of the large market clubs, but it is also the natural economic consequence from the evolution of meritocratic domestic leagues that have polarized competition throughout Europe. In economic reality, if there is one labor market for European football talent then there should also be one product market for European football.
Since the formalization of UEFA Champions League in 1992, UEFA has been one step behind the big clubs in delaying and forestalling the inevitable super-league revolution. This is why UEFA has continued to change Champions League format to appease the large media market clubs with multiple Champions League representatives from the top 6 (Big 5 plus Portugal) economically powerful football leagues in Europe. As a result Champions league revenues have exploded for the big European clubs but also for the rest of UEFA.
To increase revenues?
Yes Euro Super League revenues would probably rise exponentially following the explosion in Champions League revenues in the last quarter century. Growth in revenues is not necessarily welfare inferior for the fans if the revenues are spent on talent acquisition with the objective of winning. The polarization of talent and wealth will continue to accelerate between the Super League and the domestic leagues which may be reduced to minor league player development farm clubs.
It would be a good thing also for the fans?
After smoke clears from the impending super-league revolution the effect on fan welfare is probably the only question that matters, and the answer is uncertain. The success of unbalanced leagues throughout Europe that are perennially dominated by a few powerful clubs raises the empirical question that optimal competitive balance for fans may obtain at less than absolute equality of teams and that fans may in fact prefer a few dominant clubs.
Most of the empirical evidence however, suggests that fans prefer balanced competition between superior clubs over one-sided matches or the mediocrity of equally bad sides beating each other. The important factor for fan welfare is whether the objectives of the large powerful clubs is ultimately to win or internally maximize monopoly profit.
Most of the empirical evidence suggests that European big-club owners are win-max sportsmen, who play to win at all cost and that any revenue advantage is spent on playing talent at the transfer window. If club owners are indeed win-max sportsmen, then put them is the same super-league and let’s get it on.
In the modern history of UEFA Champions League since 1992, Juventus has been matched against Real Madrid 13 times, Bayern Munich 10 times (last in 2013), Manchester United 8 times, Chelsea and Arsenal 4 times each and Barcelona 3 times (including 2015 final). Imagine these European mega-matches once or twice a season.
The constant continental drift of Champions League toward a more formal European Super league is a strong indicator that European football fans will also win when the big boys are matched when Champions League fully evolves into the Super league.
Here is a link to my recent paper on sportsmen owners in Europe.
JV
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