This is the morning when the arrogance of elites appears to stand out.
Most obviously this is apparent in the overnight announcement that 12 of Europe's largest football clubs have decided to break away from the concept of competition and to instead set up a Super League in which they are guaranteed to have continuing membership whatever their success in domestic football competitions might be.
Six of these clubs are from England. The result is that in effect, competition in the UK's Football League is rendered meaningless almost overnight: however good another club is in our domestic competition (and those , like me, who take an interest in football will always remember Leicester's recent championship , whilst I cling to Ipswich's long ago glory days) they will know that they will have almost no chance of progressing to this supposed elite of competition.
It is notable that this breakaway movement appears to be largely US-inspired, with billions of dollars of backing from JPMorgan. The motivation would appear to be the replication of the elite status of some American sporting clubs in their supposed competitions where relegation, and so failure, has been made an impossibility, resulting in the possibility of perpetual super-normal profits for those clubs who at the point that a League is created are considered exceptional, and so worthy of this guaranteed income stream.
Think about this in terms of economics, and what becomes apparent is that this represents a straightforward intention to lock in monopoly profits for the benefit of these clubs, at cost to the rest of the Football League, football fans, society at large and the whole idea of competition which should underpin sport.
Competition is also, of course, meant to underpin markets, and in the very real sense football has retained at least some elements that looked like a marketplace. Just ask an Ipswich Town supporter and they will tell you all about the consequences of underachievement.
So, what is being played out in the very obvious battle over this issue to come is something much more significant than a straightforward fight over who may, or may not, play in the most exclusive football competition in Europe. It is, instead, a simple fight over the right to the income stream that this competition generates to which these clubs want exclusive access. It is about, therefore, whether they believe in markets and competition, or whether they wish to simply exist to exploit.
That the clubs have chosen exploitation is hardly surprising. Their fans did, long ago in most cases, lose any effective say in the management of these clubs, many of which have been the plaything of the ultra-wealthy for some time. The alienation between supporters and shareholders has, therefore, already become almost complete. That the supporters who turn out to watch the clubs have also ceased to be the major customer has hardly gone unnoticed, and the trend has only been reinforced by coronavirus restrictions, which have not greatly fettered the ability of these clubs to survive. These clubs now live in a world or property rights, mainly sold through television and online, all of which exists to extract maximum revenue, irrespective of consequence.
This is what corruption of markets looks like. It is curious to notice that in Germany, where football supporters continue to dominate the ownership of football, no club has signed up to join this new league. I very strongly suspect that if supporters continued to control football in the UK this would also be the case. But, they don't, and it is a convenient fiction beloved of economics professors, regulators and politicians that this model of shareholder supremacy still exists when the reality is that nothing like it dominates most of business as we know it, where competition is to the greatest possible degree eliminated from the business risk scenario by those who dominate markets, and exploitation is the norm.
This is why challenging this reform will impose a significant risk for the UK government, if they choose to do it, as Boris Johnson appears to have indicated they might. To take on football would imply that they will take on other forms of abusive structure within markets, which are of course the very thing which much of Tory party politics exists to promote.
Access, influence, contempt for competition, and a desire to cream an income stream off customers and even shareholders, who are treated with contempt, are the prevailing characteristics of the supposed market that elites favour. Cameron's debacles are evidence of that, as is all the cronyism of the Covid era.
This is precisely why I am not expecting any meaningful reaction: the arguments will be that the market must decide when it will be known, without a doubt, that the market has ceased to function, and that all the structures that have been put in place to pretend to regulate it are merely there to serve the perpetual advantage of the elite who abuse the idea to which they pay lip service.
As a result this move is particularly interesting. It will tell us in which direction the UK is really moving. In France and Germany it would seem as if there is reluctance to support the abuse inherent in this proposal. It is hard to imagine our current government opposing such abuse. It does, however, provide a perfect opportunity to highlight just exactly what is happening within our economy as a consequence.
This is an opportunity that should not go to waste. People don't like being abused, and the abuse of people is exactly what this proposal is about. We need to shout about it.
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[…] have already mentioned the contempt that one elite has for competition and markets this morning, so now let me mention […]
The widespread rejection of this idea is instinctive – people just “know” it is a bad idea. Wrong.
Now, if we can make the parallels between football and the behaviour of business we might start something!
Precisely
If you were a bookie, what odds would you give that ANYTHING substantive will be done (apart from some happy-clappy platitudes)?. My offering would be 10/1.
The direction of travel has been clearly set in always follow the money.
I am not a punter, but if I was I think your odds look good
1 )My grand-daughter has to pay the FA £ 35 just to register to play amateur football
2 ) Who would I rather watch Real Madrid twice a season or Pullis-inspired Stoke City ?
Plague on both their houses
Your grand daughter is the of the game – women’s football requires more skill, or at least to me it seems to offer more
This is all about the money, and power to set the terms of the competition and divide the economic rents, and nothing to do with the sport. It is also nothing to do with the team’s historic fans – it is about the millions around the world who will pay to watch televised matches, and buy replica kits. If you’ve spent hundreds of millions on buying a football club, and buying the players to play for it, and their wages, and a new stadium, and all the rest, based on the revenue projections predicated on playing a certain number of top-level UK games and top-level European games every season, then it is just not acceptable to fail to qualify each and every year. I am looking at Arsenal, Tottenham, United, etc. Six into four does not go.
Capitalism tends towards monopoly, because that is the way to maximise your profits. Amazon, Google, Facebook, Uber, Airbnb, etc, are all trying to corner the market, just as was done for oil and steel and diamonds and bus services in the past. Drive the competition out of business (or buy them) and then hike your prices (and reduce your quality) when there is no alternative. By its very nature, this new “super” league will be anti-competitive. Perhaps competition authorities might like to investigate this nascent cartel?
I hope so
I see Jose Mourinho has just been sacked as boss of Tottenham. It had to happen I suppose.
https://www.si.com/soccer/2013/04/10/real-madrid-fan-jose-mourinho
Not so long ago this would be seen as a sign of goodness. Now it is regarded as a sign of weakness.
It’s not ever been about just the money.
This is a geopolitical plan. Money is only a representation of Power.
What we are seeing here is a cultural grab, using Sport, as has been long perfected in America. The Slave system is very much alive in their college and professional sports – just look at the demographics.
This is clearly a move to Americanise European Sporting culture as part of the never ending war at unilateral superiority over the planet.
I am not a great football fan.
Alex Ferguson is someone in football I have respect for his opinions and achievements. He is angry. I hear Mourinho has walked coincidentally.
It’s a grab for where income growth is the higher income growth bracket – it’s been going that way for years.
Of them all, I’m sorry to see The Arsenal and Liverpool going that way though. I lived in London for 6 years and never ever got a ticket to see Arsenal at Highbury – too expensive or hard to come by then. And Liverpool – what it means to its fans………..I don’t know.
It just gentrifies what is a working class game. The Prawn Sandwich Economy we should call it.
Thank God for rugby union is all I can say (although it has problems of its own).
With the CVC investments, I foresee rugby union heading in a similar direction. They will want their pound of flesh in due course.
I have long seen a sort of parallel between the City of London and the national English football team.
The City is full of ‘star’ foreign banks, Deutshe Bank, Goldman Sacha et. al. Yet sterling is at a lower exchange rate than it was 15 years ago.
The Premier league is full of foreign stars. Yet the English team usually underperformes compared to many in Europe.
Maybe they could call it the world series of soccer. They could even shift the teams to the US and hope the Americans, Chinese and Japanese fans won’t notice that the location has changed and their cash will be enough to fill their grubby sacks. That is the only way that this can work. Why will fans in Europe want to travel every other week? Will they pay the same amount for season tickets for 18 games a year? Who is going to show it? Amazon probably or maybe Apple.
Economically it doesn’t work. New Coke anyone.
There is too much money involved in football. That creates greed and corruption. This however seems to be more of a power play between the richer clubs in the UK, Spain and Italy and UEFA in an act to get UEFA to amend its proposals for a new competition which these bigger clubs don’t think rewards them enough. So this may be just a negotiating tactic and some deal will come out, but it may yet backfire. It certainly has been a bad PR move.
Sadly these richer clubs don’t even need supporters anymore as most revenues come from TV and advertising now. They have hardly been affected by the recent absence of crowds for example.
I agree that supporter run clubs will oppose this. As do the supporters across the board judging by todays. reactions. My favourite story being at Liverpool where one fan unfurled 2 banners outside Anfield one expressing his fan clubs disapproval and another saying Liverpool RIP 1892-2021. Security guards appeared by decided not to remove it!
The finance industry regards football as a business; if they generate more cash by selling TV rights to the billions of viewers in the far East than by having thousands buying tickets to see their heros live, then so be it. This proves they do not “get” the game at all.
As Jock Stein famously said, “Football without the fans is nothing.” He wasn’t only a top manager, he knew the game and the fans. Anyone who has watched their team triumph or lose as part of a crowd knows what he meant. It’s quite clear that the money people don’t get it either.
Agreed
Shankley got it too
Shame on Liverpool
Richard, if I may speak in defence of “Liverpool”. From tonight’s the pre and post match interviews of the Liverpool manager and players, the players and the manager first heard about this proposal when the rest of us did.
That’s right – the owners of the LFC business didn’t even have the decency to communicate this to their employees beforehand, and instead let them take the flack and be on the firing line to field questions on their behalf.
If that’s the case clearly Klopp and the players are in an extremely difficult position – both Klopp and Milner said in their interviews they disagreed with the idea.
I heard
Good for the two of them
And a sure sign of how foolish the owners are
[…] Cross-posted from Tax Research UK […]
I think that the answer is simple.
The Tory response will be agnotological – they will condemn on one hand and assist in another. You watch.
I lost interest in football over the last 20 years. Too much money involved and clubs have become the porns of oligarchical billionaires. And at the local level, the local wannabe rich kids. Don’t watch it on tv and stopped following my local team Grimsby Town.
The point that occurs to me is why do we play the billionaires game and call them clubs? They are not clubs in any sense of the word. The language is used to instil the nostalgic emotion of the football of yesteryear. It’s done, it’s all just cash now. The same process that has hit our “snout in the trough” system of governance.
Hurray for Germany who still have a social ownership model of real football clubs.
Grimsby were the first professional team I ever went to see
I can’t remember who they played
Blunder Park was not crowded!
That made me laugh out loud, there were 22,484 at Blundell Park the night the Mariners clinched the old 4th Division Championship against Exeter back in 1972: a formative experience with my dad, brother and 2 school mates. Very few young fans will experience anything like that heady atmosphere in the football league until clubs return to ownership by fans not billionaires.
I so agree
I spent ages in the 80s arguing at Ipswich Town AGMs that this was needed in their case
It did not happen, of course, but I had a lot of fun making the then board squirm
Grimsby were the first professional team I went to see.
They were in the second division.
When the fishing industry still existed.
The solution to the European League proposals is to bring in price controls for spectator prices and broadcast rights. Just as rights to the Olympics, FA Cup and Grand National were circumscribed so should the market be controlled for international football.
It would be challenged by the WTO but they should be told there are some things more important than the liberty of american bankers to milk the citizens of the football world.
Superb, Richard. Using elite sport as an example of the myth of competition in this scathing analysis gives you the opportunity to broaden your audience, I believe. Anti trust legislation has ceased to be a healthy political topic now for many decades and that entire discussion needs to be revived. How long before we have a manifesto promising to compel the breakup of any business controlling directly or indirectly more than 10% of a market? Good for competition and guaranteed to cause civil war I suspect!
Once this is resolved, I wonder whether similar ire will be directed towards elite educational establishments in this country.
The schools of Eton, Harrow, Winchester et al have a much more pernicious and corrosive effect upon the majority in this country than any football club ever has.
It all started with the Premier League. Which was the FA Premier League at first but then ran itself.
Then the European Cup was changed to the Champion’s League. Not just the league winners qualifying.
The ESL is the next obvious move.
Greed of a few clubs has been running the show for 30 years.
They don’t realise they need the rest of the pyramid for them to sit on top of.
I hope they go and it is a total disaster.