Tuesday 20 April 2021
I wrote – Yasmine Selim:
The flames of war erupted between 12 major European clubs on the one hand and the European Football Association and the European government on the other hand, after the clubs announced the organization of a “Super League” competition to compete with the European Champions League and be far from the Union.
The list of 12 clubs includes Liverpool, Chelsea, Manchester City, Manchester United, Tottenham and Arsenal, Spain, Atletico Madrid, Barcelona and Real Madrid, Italy, Milan, Inter Milan and Juventus, and 3 other clubs are scheduled to join before the opening season of the tournament, bringing the number of founders to 15 clubs.
The competition system establishes a mechanism to qualify for five more teams annually based on the achievements made in the previous season.
The announcement by the clubs of this competition was met with a storm of criticism, reaching the point of threatening the President of the European Football Association, Alexander Ceferin, to prevent the players participating in the tournament from participating with their elections in the FIFA tournaments and to withdraw the European championships from the participating clubs.
European governments are on the front line, and clubs have taken a sharp attack from British Prime Minister Boris Johnson and French President Emmanuel Macron.
On the face of it, it appears that it is a dispute over a football competition, but it entails huge financial gains that participating clubs will receive without interference from UEFA, as in the Champions League.
Where will the money come from?
The famous US investment bank, GB Morgan, will finance this competition by injecting 3.5 billion euros into the establishment of the new competition.
Bloomberg said the figure would reach 4 billion euros after additional payments and expenditures.
Each club participating in the new competition will receive between 200 and 300 million euros “welcome bonus” to enter the competition, according to the Financial Times.
The founding statement stated that the funds that the clubs will receive will support their infrastructure investment plans and compensate them for the impact of the Coronavirus pandemic.
GB Morgan will provide this financing with an interest rate of between 2 to 3% and a repayment period of 23 years. The clubs will collectively be required to pay GBMorgan 264 million euros annually for this financing.
To ensure the continuity of this competition, the clubs participating in the tournament signed a binding agreement to remain as part of the Super League for a specified number of years.
A person close to the new competition told the Financial Times that the money that the teams will receive should not be viewed as a “welcome bonus”, but rather as an advance on future revenues that must be paid if any club chooses to leave the competition.
But the clubs will get millions of euros in broadcasting and advertising rights, which they will divide among themselves, without looking at the rest of the small teams that were sharing these rights.
The tournament’s founding statement stated that it would provide greater economic growth and support for European football through a long-term commitment to unlimited solidarity payments that would grow in line with the league’s revenues.
These solidarity payments will be significantly higher than those generated by current European competition and are expected to exceed € 10 billion during the clubs’ initial commitment period, according to the statement.
He said that the competition system is prepared on a sustainable financial basis, with the participation of all established clubs within the framework of spending.
Why are clubs rebelling against the UEFA Champions League?
Champions League funds are no longer attractive to major clubs, especially in light of the difficult financial conditions that clubs have suffered in the wake of the Coronavirus pandemic, which led to heavy financial losses as a result of the general closure that spread Europe and stopped fans entering the stands and caused a decline in the clubs’ income.
Since the start of the Champions League competition in 1955, with its old name, up to its current version, since 1992, the financial return of the competition has evolved until the winner of the tournament received a reward of 19 million euros, in addition to the reward for qualifying for the following roles and broadcasting and advertising rights.
But this money is not enough for the big clubs with big expenses, especially since a part of this money is distributed equally to all the teams participating in the tournament, such as the reward for qualifying for the following rounds.
The president of Real Madrid and the president of the Super League, Florentino Perez, defended in an interview yesterday the new tournament by saying that “modest clubs cannot win money while Barcelona loses, and in England the six big clubs lose, while 14 clubs do not lose.” Noting that his club lost in the past two seasons 400 million euros.
He said the big clubs are the most attractive and the ones that will make money.
He added that the Champions League winner gets between 120 and 130 million euros, while in the Super League the champion will get more than that.
The founders of the Super League criticize the current system of the European Champions League, but the European Union yesterday unveiled a new tournament system that will be implemented beginning in 2024.
The coming days will be decisive, especially with FIFA entering this battle and announcing its total rejection of this new competition, which will establish a parallel entity for the official federations.