2018 has seen the possibility of a breakaway European Super League look increasingly likely. In part 8 of our 18 for 18 series, PAUL McPARLAN looks closely at the reasoning behind the moves by the elite clubs to maximise their earning potential by breaking existing structures.
Perhaps the most worrying development to have emerged from 2018 was the leak from the German newspaper Der Spiegel which reported on the secretive meetings that have already taken place to establish the first ever European Super League. For the owners of the so-called top five or six clubs in England, this is an enticing prospect which offers the opportunity to grab a bigger slice of the cake with regular fixtures against their European counterparts. I am somewhat astounded that anybody is surprised that this may come to fruition in the next few years and one has only to examine the rationale behind the formation of the Premier League to understand the concept.
Brian Glanville was perhaps being unwittingly prescient when he coined the phrase the “Greed is Good†League as the Premier League came into being at the start of the 1992/93 season. The new breed of club chairmen such as Martin Edwards at Manchester United and Alan Sugar at Tottenham Hotspur looked enviously across the ocean at the riches that were being generated by the owners of the Gridiron giants in American Football and could see an opportunity to make increased revenues from the televising of their sport. In 1990, the NFL received a sum of $900million per annum in fees for broadcasting their product. When the rights for the new Premier League were floated, ITV initially proposed £262million for a five year deal but lost out to Sky’s bid of £304million. Impressive figures compared to the past, but those rights had been sold for the equivalent of £60million per annum, which paled into insignificance with the deal the NFL had struck.
The Premier League was still light years behind their American counterparts in generating income streams. Amazingly, a previously unknown businessman called Michael Knighton was within an ace of buying one of the League’s leading teams, Manchester United, for the paltry figure of just £20million in 1989. Even stranger, the Chairman and “respected businessman “ Martin Edwards was prepared to sell such an iconic club for relatively small change. Although derided by media commentators since, Knighton was arguably one of the first to realise the merchandising potential of a football brand. Football chairmen still had so much to learn but as more foreign investment and financially shrewd owners gradually took control of most of the Premier league clubs, they have started to realise their monetary goals.
We as fans have unwittingly become the instigators of our own downfall as huge chunks of taxpayers’ money were handed over by John Major’s government to football clubs to subsidise the reconstruction of old terraces into all seater stadia. This subsequently allowed clubs free rein to substantially increase the cost of watching the game for the average fan and attract an older, more affluent coterie of supporters to the ground. Advertisers quickly wished to identify themselves with this new family-friendly version of the game, whereas nobody had wanted to associate themselves with the scenes of hooliganism witnessed across the nation such as the time Millwall fans clashed with police at Luton in 1985.
There can be no doubt that the NFL franchise is the model that the new breed of incumbent foreign Premier League club owners worship. American Football, despite only being based in one country, has made no secret of its desire to be considered as a world game. Already, regular season fixtures are moved across the Atlantic to London without any consideration being given to their domestic support base. For twelve seasons the NFL even tried to operate a European “World†League with teams from Germany and England competing against their US counterparts , but it collapsed in 2007. But with an increased number of fixtures, and stadia prepared to host matches in England, it can only be a question of time before at least one European outfit joins the regular NFL roster and live NFL games start to clash with Premier League matches for viewers. In the next decade the Tottenham Jaguars could soon be playing both football and gridiron.
The NFL also does not have the inconvenience of international breaks as the US has no rivals in the sport. Therefore, there is no chance of star players picking up injuries whilst representing their country. Another attraction for the NFL investor is that they don’t have to concern themselves with a loss of TV revenues if their side is relegated as this form of demotion does not exist. Even better, the owner always has the option of relocating their team to a completely different city or state if the franchise is not generating enough income or if a different city offers them a financial deal that they cannot possibly refuse. Several metropolises such as Houston, St. Louis, San Diego and even Los Angles have lost their teams in this fashion. If Bournemouth had been an NFL side, that franchise would have left years ago
The NFL also changed the concept of what it means to be a fan. Even in the 1970s and 80s it was not unusual to see sports shops selling NFL shirts and people proudly wearing them in British towns and cities whilst claiming to be genuine fans. The notion that you have to physically attend a match to be a fan just does not hold in the USA. I remember a heated debate I had with some of my secondary school pupils in the mid 1990s when I stressed that to be a fan you had to go to the game, but this new generation considered themselves a true supporter just because they bought the replica shirts and watched the side on TV. A new breed of supporter had arrived.
But Premier League owners also analyse other successful models in different sports and countries and the reach of social media is ever more important. New Zealand is a small country of 4.8 million people but the successful marketing of its national Rugby Union team, known across the globe as the All Blacks, is impressive. In just five years they have increased their total revenue from sponsorship by 55%, achieving the model of revenue growth that all Premier League clubs would like to emulate. It is a difficult challenge to market a national team in other countries but somehow the Kiwis have attracted a social media following of over 10 million in England alone, which attracts both sponsors and advertisers from the leading brands across the planet, from countries where rugby is not even played. So popular are the All Blacks across the span of rugby playing nations that financially they don’t need to be based in the Antipodes anymore. In fact, New Zealand draw larger crowds when playing abroad compared to their own country, attracting crowds of 90,000 in Japan recently.
Rugby League has even less of a worldwide support base than Union, but the Premier League is viewing their latest innovation with considerable interest. Two seasons ago, a Canadian Rugby League side, Toronto Wolfpack, was created with an ambitious five-year plan to become a Super League side. Despite the logistics and inconvenience of their opponents having to endure a round trip of over 6,000 miles to complete a fixture, the Wolfpack have introduced the traditional northern game to a whole new audience. Whilst their attendances may be small, the amount of money they have generated from sponsorship, advertising and television rights means they are on the verge of becoming economically viable. The Sky TV deal for Rugby League also demolished the myth of the traditional 3 o’clock kick off for the sport. Fixtures are now played on any day of the week and at various times as the clubs choose to accept television revenues over actual fans in the stadia. Very few Super League games are scheduled for 3pm on a Saturday anymore.
Whether you choose to accept it or not, the current Football League structure in England is firmly based on a Victorian model that will struggle to survive the next decade if Premier League chairmen and their European counterparts have their way. The concept of national leagues is not going to survive. Nor is the idea of promotion and relegation if the proposed European Super League (ESL) appears.
It was Lord Hill who, in the 1960s, uttered the phrase “having TV shares is like having a licence to print your own money “. In the present climate owning a Premier League club offers the same possibilities. Of the current 20 Premier League owners, only the likes of Burnley, Huddersfield Town and Brighton and Hove Albion have owners who could genuinely claim to have any strong local or emotional ties with the clubs they own. Such clubs are unlikely to be invited to join a European Super League anytime in the near future. Despite their public utterances and pledges of undying loyalty the remainder are arguably football teams with the single intention of making money for themselves. The Oyston family have shown how relatively simple it is to divert and syphon off money from Premier League revenues to their own personal accounts and the experience of supporters at clubs such as Birmingham City and Liverpool in the last ten years have demonstrated how unscrupulous foreign owners can build a substantial nest egg for themselves. The Oystons surely won’t be the last to be exposed.
The Champions League still lags behind the Premier League in terms of income generation but the proposed European Super League will change all that by simply relocating the top Premier League sides to the new Super League. And from the owners’ point of view, now is the time to do so as it appears that the ceiling for television rights in the UK may have been reached if the most recent TV deal is anything to go by.
The latest proposal appears to involve 16 teams. By simply expanding that with another two, then you have a viable competition with 18 clubs with fixtures being played any day of the week to maximise the potential TV audience. FIFA may decide not to recognise it and “outlaw†any nascent competition, but this simply results in the ESL clubs not having to worry about those pesky international breaks and instead can focus on lucrative winter and summer tours in the emerging markets of Asia and North America. However, it would come as no surprise if an additional team from the United States were to be invited to join to become what would be marketed as a “World†league. Toronto Wolfpack have demonstrated that it can be done.
Gathering the best clubs and the best players under one umbrella is the key marketing concept of the ESL. Why bother to switch on your TV to watch Huddersfield vs. Burnley on a Wednesday when by simply switching channels you can watch Messi vs. Ronaldo as Barca face Juventus in a meaningful league fixture? Every season you can predict that PSG will win the French League and Juve the Italian Serie A. The ESL suddenly brings a competitive element to every match, there are genuinely no easy fixtures. It is worryingly simple to envisage broadcasters being prepared to bid large sums for the rights to such a competition, especially when the domestic leagues they have abandoned would now be devoid of big clubs and many star players.
With La Liga now prepared to schedule games in Miami and the Premier League having examined the principle of the 39th game, then surely the ESL will seek to host matches outside of Europe in Asia, Australia or the USA? Could a side conceivably be compelled to play two “home†games outside of their own country to meet the demand of their support base in other continents? This model appears to have become established in the NFL.
The NFL, once again, was the first sport to explore the possibilities of creating packages of matches for differing broadcasters to compete to buy. In 2018, the NFL sold rights to three of the main US TV networks and this included a clear move into digital streaming of matches as CBS now transmits games across all of its platforms so that they can be viewed on laptops, consoles and smartphones. The NFL has also sold packages to both Amazon and Twitter and it will only be a matter of time before both Facebook and Google come calling. Undoubtedly, reaching out to social media audiences is an attractive proposition for any advertiser. It is safe to assume that the ESL will be looking to secure similar deals.
This year also saw a significant development in sports transmission with the arrival of the little known Eleven Sports who are owned by the Italian owner of Leeds United, Andrea Radrizzani. He was able to outbid both BT and Sky for the rights to televise live matches in the UK from La Liga and Serie A. Yet Eleven Sports do not have a broadcasting platform in the UK and can only transmit games via streaming on their own App and website. However, they will also show one match live for free each week on Facebook. The fees charged to viewers this season are competitive, for just £59 you can watch any La Liga or Serie A fixture for the season on a hand-held device. This is the cost of attending two Championship games for an adult. For the many millennials and students with limited funds, this is an extremely attractive offer. It is also a clever one; why bother to watch football on TV any more, in fact why even go to a match? And it also means that these customers are likely to stick with this platform for the future.
For the first time ever next season, Amazon will be covering the Premier League, showing 10 midweek fixtures simultaneously and then repeating this format with 10 live games on Boxing Day. It will be worth analysing the actual attendance figures for matches on both those occasions, but undoubtedly the entry of Amazon into this market is a game changer, and if successful will only serve to make the arrival of a European Super League transmitted to Amazon Prime members more feasible.
Digital streaming of ESL matches will allow fans to watch any match, anytime and anywhere for the right price. This also creates an instant, unsupervised market for in-game betting as it becomes the norm that you cannot enjoy a match unless you have a wager riding on the eventual outcome. Broadcasters will also be able to charge premium rates to advertisers for a half time slot in the major end of season games to allay the costs they have paid for broadcasting rights. Certainly, the ESL will examine the possibility of pay-per-view for the key title deciding fixtures to test if the market can bear it. My guess is the market will.
It is also in the interests of the ESL to alter the demographic and social strata of the person who turns up at the stadia. Clubs don’t actually need fans financially anymore and, in fact, at times they regard them as an inconvenience. The season ticket holder generates additional costs for the home club via the necessity of extra stewarding and policing, especially when away fans are present. Increasingly clubs wish to attract the football tourist who spends the weekend in the host city, buys a plethora of club souvenirs, including the de rigeur half-and-half scarf and spends the match taking selfies and filming corner kicks. As this type of fan only visits once or twice a season, they never barrack the players or the manager or join in with the crowd chanting “sack the boardâ€. As Leeds United fans have found to their cost this campaign, if you dare to chant your displeasure at the constant changing of your fixture times, then Sky TV simply drowns out your protests. This season you can watch any midweek Championship fixture via the Sky portal and not unsurprisingly attendances have dropped. The supporter in the stadium is no longer deemed essential.
The impact of generational shift is often underplayed by social commentators. From the Baby Boomers to the Millennials, each new generation brings its own unique outlook. The latest group to be labelled are the so-called “Generation Z†who were born between 1995 and 2005, and have levels of technological competency and familiarity way beyond those of preceding generations .At present, football traditionalists like myself are aghast at the prospect of a European Super League and the destruction it will inevitably reap on the domestic game and we assume everybody shares our perception. Yet if the ESL is in place by 2025 at the latest, then the target market would undoubtedly be Generation Z who have grown up accustomed to watching football on their smartphones and consoles rather than physically going to a match and will consider the idea of attending a domestic football fixture as “quaintâ€, a similar experience to visiting a heritage cotton mill or coal mine. This will be the new normal.
Last season the Champions League earned £2.35billion for TV rights and the Premier League £5.16billion for a three year deal. Across the Atlantic the NFL TV deal in 2013 generated $27billion just from TV rights alone. The ESL will try to agree a similar agreement for their new league and will look at the income generated by the Super Bowl in the USA to see if they can conjure up a similar product here.
This scenario may be dismissed by many football analysts as pure conjecture and their perception is that the supra-European sides are simply trying to wheedle more money from a revamped Champions League format whilst maintaining their rightful place in their domestic leagues. Since the 1980s, certain footballing credos that were previously considered sacrosanct have been totally demolished. You no longer have to win your domestic league to enter the rebranded European Cup; the FA Cup final has been switched to 5.30pm on a Saturday afternoon and finishing fourth in the table is now a cause for celebration. The reality is that the primacy of domestic European leagues is over and will be sacrificed on the altar of progress.
Powered by the unrelenting pace of technology, the footballing landscape will become unrecognisable over the next decade. The ESL is coming and will be streamed onto your hand-held gadgets for you to view anytime and anywhere. The future is coming, and football will no longer be watched, it will be consumed by the sedentary masses via digital streaming. I would bet on that. The European Super League, sponsored by Google and broadcast by Amazon Prime, I dread the prospect. I hope I am not alone?
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