ABU SATTAR | LEGAL JARGON WRITER
In late 2018, Der Spiegel and Football Leaks broke the news that 11 top European Clubs held secret talks to create a European Super League (ESL), which could be created as early as 2021. Two years on, and it has been reported that US investment bank JP Morgan are in talks with top English clubs to make an ESL a reality. The proposed £4.6 billion super league will be comprised of 18 teams from the top 5 football nations (England, France, Germany, Italy, and Spain). Nothing has been confirmed yet but, if such a league were to be formed, it would one of the biggest market disruptions in the footballing world.
The commercial implications of an ESL would be far reaching and potentially damaging for many stakeholders in the game.
If an ESL were to form then it would be seen as an immediate replacement for the current Champions League. However, the impact would also be felt by the domestic leagues of the participating teams. Broadcasting revenues are the largest source of income for football clubs. If a new ESL were to form, then it is likely that broadcasters would follow the largest teams to the ESL and pay significant amounts in order to secure broadcasting rights to the matches.
Additionally, if the ESL consists of Europe’s largest clubs, who have some of the largest followings, then broadcasters would also have little incentive to pay the same amounts for the broadcasting rights to domestic matches. Many of the remaining teams would then suffer considerably due to the loss of revenue and domestic leagues could become little more than formalities. Furthermore, the Covid-19 pandemic has highlighted how important broadcasting revenue is for teams, with many of the smaller teams suffering financially. An ESL could have the same, if not more, of a financial impact.
Similarly, commercial sponsors would compete with each other in order to secure deals with ESL clubs, as the brand exposure would be far greater than if they remained in domestic leagues. Unless a team has a considerable fan base, such as Newcastle, then sponsors would be paying pennies for sponsorship deals. Again, some of the smaller teams with a limited fanbase could suffer and may be forced to downsize.
The formation of any ESL would be a highly complex matter covering multiple jurisdictions. The legality of an ESL, though, has been met with questions on legality by sports lawyers across the continent.
In 2018, UEFA and the EU signed a new Memorandum of Understanding. As part of the agreement the Council of Europe and UEFA recognised that the European sports model “is based on sporting and financial solidarity mechanisms”, with “open competitions with a balance between clubs and national teams” and it explicitly mentions “the principle of promotion and relegation”.
The wording of the Memorandum potentially opens up legal challenges against an ESL for anti-competitive behaviour and contravenes EU law. The formation of a footballing super league has been compared with basketball’s ‘Euroleague’. This is basketball’s version of a ESL, with it being a closed competition featuring 18 sides, with 11 being permanent. The Union of European Leagues of Basketball (ULEB), the basketball equivalent of UEFA, has filed a complaint with the European Commission against the Euroleague for being anti-competitive. ULEB argues that the lack of relegation/promotion and the way the media favours the 11 permanent teams violates EU competition law. The outcome of this complaint could set precedent on the legality of breakaway leagues. It could either pave the way for an ESL, as has been proposed, or kill the idea unless significant amendments are made.
The idea of an ESL is a mouth-watering one for football fans. The prospect of seeing the likes of Barcelona, Real Madrid, Man City, Liverpool, Juventus, Bayern Munich, etc. play each other week in, week out is exciting. Whether that excitement holds after two or three seasons is another question. Furthermore, along with many prominent ex-players, UEFA and FIFA have all opposed the idea and it seems that only about a dozen clubs are pushing for it. Further details surrounding the ESL are scarce, but the idea appears to be lingering and threatens to become reality.
Abu is a law graduate with aspirations of becoming a commercial solicitor. His legal interests are in property, data protection and technology, but with enough information he can have an opinion on anything. He also wants to see and work towards greater diversification of the legal sector, particularly of more senior roles.
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