Competition makes professional sports compelling as a spectacle rather than an investment. A dozen European football clubs, including Liverpool and AC Milan, plan to form a new Super League with $6bn (£4.3bn) of debt backing from JPMorgan. This “closed shop” format raises worrying issues of potential anti-competitive activity — as might retaliation by football’s aggrieved ruling bodies.

Investors see scope for a payday in rights sales. Shares in quoted clubs such as Manchester United and Juventus rose about a tenth in morning and pre-market trading. But big, traditional media groups will be wary unless bodies such as the Union of European Football Associations can be mollified.

Breakaway leagues are nothing new. In the UK, football weathered the storm triggered by the creation of the Premier League in 1992. Some will point to its success as proof the Super League could flourish. In the last full pre-pandemic season, the EPL generated revenues of €5.8bn, more than 73 per cent higher than closest rival La Liga in Spain, according to Deloitte.

The crucial difference is that clubs can be relegated in and out of the EPL. This would not apply to three-quarters of members in the planned Super League. This would lack a broad hinterland of feeder leagues which would be costly to maintain. Collaboration by a consortium of businesses to create a dominant product of the kind envisaged, albeit in sport, would merit antitrust scrutiny.

So would mooted retaliation by Uefa and the EPL. They are threatening to block player participation in other leagues and national teams. These bodies are plainly rattled by the competitive threat to their own contests, notably the Champions League, which Uefa wants to expand.

Such sanctions would look like a restraint of trade, says Peter Crowther, a legal expert on sports and competition law. In the US, the Supreme Court has to rule repeatedly on the antitrust implications of professional sports, especially Major League Baseball, often over the treatment of players.

Would viewers pay to watch the Super League as well as national tournaments and the Champions League? Sky, BT Group and Amazon are due to start renegotiating new three-year contracts late this year. Few expect the existing £5bn contract value to rise.

The question that follows is: who would finance the new league? This would need equity support. The Premier League had Sky. The Super League has mentioned no media backer.

Private equity is thick-skinned enough to put up money and would be attracted by the stable cash flows a limited relegation league would create. Rich clubs, freeriding on grassroots football could then get even richer. That makes for a rough game, not a beautiful one.

The Lex team is interested in hearing more from readers. What is your analysis of the Super League plan financially and politically? Please tell think in the comments section below.

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