billionaire debts, cut premiums and war on UEFA

It arrived there Super League, because calling it Debt League would have had a much lower appeal. Twelve of the most indebted (or almost) clubs in Europe, driven by the instinct of survival, have decided to withdraw from Uefa competitions, all the more with the prospect of seeing reduced Champions League participation prizes. Participation that, among other things, is not assigned by divine right, therefore with the uncertainty of the results on the field that could oust some of the “prestigious clubs”, as they themselves have defined. A scheme that no longer met the needs of the big player in European football, struggling with ever-increasing debts and ever-declining revenues, affected by the Covid-19 cleaver. Faced with the one-off 3.5 billion put on the plate for the creation of a new tournament, with television and sponsorship revenues all to be quantified (but undoubtedly higher than those foreseen by the Champions League), the choice could only be one: the rupture.

The break between the clubs and Uefa

Superlega has been talked about concretely for years, even before Football Leaks unveiled the project born in Madrid in 2018 (with 9 of the 12 founders involved). The real schism, however, takes place in September 2020. In the midst of the pandemic, Uefa announces to the associated federations that it has lost about 600 million euros as a result of the lack of television and sponsorship revenues and that the forecasts for the future are all other than rosy. To face this crisis, however, the proposal is surprising: the prizes for participation in continental competitions and the so-called market pool will be cut for the next five years. It is estimated that each club could lose an average of 4% of European revenues per season, which in themselves are considered not very profitable compared to their potential. In the 2018/19 season, the last before the pandemic, UEFA had distributed less than 2 billion to the clubs of the Champions League, “The NFL has a turnover of about 5 billion euros against a catchment area that is about one-tenth of that of football»Declared Andrea Agnelli, president of Juventus, as well as one of the founders – and vice president – of the newly created Super League in 2016.

If in normal conditions there were already several splinter pressures, with the planned post-Covid cuts the bubo exploded. At the end of September, the leaders of Juventus, Inter and Milan met in the Rossoneri headquarters. It is initially hypothesized that it could be a meeting regarding the entry of private equity funds into Italian football, but in reality the project at stake is much bigger. In mid-October we learn of another reform plan, this time from England, called the “Project Big Picture“: in practice, the top six Premier League teams (Manchester City and United, Liverpool, Chelsea, Arsenal and Tottenham) are asking for more decision-making power in exchange for an increase in the mutuality quota foreseen for the Football League clubs. A project rejected by the Premier. Finally, from Spain, the last bomb is dropped by Josep Maria Bartomeu, the man who led Barcelona towards the threshold of financial distress, forced to resign between the red and burofax of Messi who asks for the unilateral termination of the contract. It is October 27 when, before leaving the presidency of the Catalan club for good, he announces: «Yesterday we approved our participation in a European Super League».

A Super League with over 5 billion in revenues

In October, therefore, the design of the new Super League is already ready. Also because, by that date, all European clubs are aware of the economic disasters produced by Covid-19. The twelve founding clubs (Real Madrid, Atletico Madrid, Barcelona and those already mentioned between Italy and England) have calculated operating losses – therefore without capital gains – amounting to almost 1.5 billion euros. At the moment, only Liverpool have not yet disclosed their budgets for the 2019/20 season, but the other eleven companies alone reach the threshold of 1.4 billion euros. As final results, including taxes and capital gains, the total red of the twelve dissidents is 727 million euros, in a year that was however partially invested by anti-Covid measures. The real damage will be seen at the end of the 2020/21 season, the first experienced entirely in an emergency due to the pandemic. “I think this season will be worse – this is what Andrea Agnelli stated at Think Sport 2021 regarding all European football – there will be losses between 6.5 and 8.5 billion euros for the two-year period».

It gets even worse when looking at debt. The total debt of the twelve clubs exceeds 6 billion euros and of these, 4 billion are due to banks. The balance between financial debts and liquidity of the three Italian clubs, alone, is close to one billion euros (385 million for Juventus, just under 300 million for Inter and 244 million for Milan), but one of the founders of the Super League is it is undoubtedly who is worse off. Tottenham closed 2020 with a net debt of almost 700 million euros, Barcelona follows them with over 488 million in net debt, but a total debt of more than one billion euros. It goes without saying that the funding of JP Morgan (as confirmed by a spokesperson for Reuters) is seen as a panacea for the companies that have decided to revolutionize European football. The one-off contribution of € 3.5 billion to be divided into 20 is just the basis for getting started, because then the revenue pie will be shared, which promises to be decidedly higher than that shared between the clubs participating in the Champions League. In the 2018/19 season the biggest share went to Barcelona, ​​with 117.7 million euros. According to the New York Times, the founding members of the Super League will receive 350 million euros each: they make 5.25 billion against the less than 2 billion distributed by UEFA for its main competition. In the short term, why in the long term, the margin could reach 10 billion in potential revenues.

Uefa’s (vain) threats to Super League clubs

On an economic level, UEFA has no weapons available to counter the rudeness, made official in the middle of the night, a few hours after what should have been the announcement of the new Champions League. The Congress convened in Montreux, Switzerland, has become a meeting to evaluate all aspects relating to this diaspora. Even before the official announcement of the Super League there were threats of legal actions and sanctions in the sports field, ranging from the prohibition to participate in domestic and international competitions, up to the prohibition for players to represent their respective national teams. This last point, however, seems impossible, or at least: you try to tell the Qataris, who are keeping Paris Saint-Germain out of the group of dissidents, that their World Cup will be played without stars. A frankly unlikely prospect, but it is not that the exclusion from the championships of the twelve “super-leagues” is such an easy way to go. However, he is the only real bogeyman that UEFA can dispose of.

If it is true that the Super League will be able to guarantee € 350 million per club, it is equally true that this figure is tempting instead of Champions League revenues. If the domestic ones are also lost, the game may not be worth the candle. Not for the Premier League clubs, certainly: in 2018/19, the last year of “normality”, the six Englishmen involved in the project took home the equivalent of over a billion euros from the TV rights of their league, in a range that goes from 174 to 165 million each. Revenues from stadiums, merchandising and sponsorship can be substituted, but television revenues cannot. But what would happen if UEFA followed up on its threats, excluding the twelve dissidents from the national championships? Could Premier League TV rights ever have the same value? Obviously not, which is why a possible hard punch would risk turning into a boomerang, without excluding possible legal actions by the broadcasters that currently hold the rights. A situation that sees Uefa with its back to the wall and the Super League now ready to take off.

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