European superliga: what does this mean for the football market?

European football moves billions of euros a year – and the announcement of 12 major clubs to create the Superliga, a new competition, has a huge impact on the world of football.

 

tracktracktracktracktrackOn April 18, 2021, the world of sport – and finance as well – had a surprise: 12 European football clubs announced the creation of a Superliga, a championship in which they would compete in place of the current UEFA Champions League (Union of Federations Football Associations).But how does this decision financially impact the world of the ball?The first point is to understand that football moves billions: to give a parameter, US$5.63 billion were spent just considering the purchases and sales of players in 2020, according to the annual report by FIFA (International Football Federation) – because of of the pandemic, this was the lowest value in the last five years, about US$ 2 billion less than in 2019.This means that the creation of the Superliga (and the abandonment of the Champions League by some of the most important teams in Europe) changes a billion dollar structure and impacts a market that goes far beyond pure sport.

What is the Superliga?

The Superliga is a new football league announced by 12 traditional European clubs, as opposed to the current UEFA Champions League, which has existed since 1954.

The competition would not end the Champions League, but some of the richest and most traditional clubs in Europe, with rosters that include world-famous athletes, would no longer compete in the European championship to play in the new league. With world football’s elite in a tournament without relegation and not accepting small teams, the Superliga would break with the established system of European football and could attract sponsors, harming other continental competitions.

Already confirmed their participation in the competition: the English Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham; Spaniards Atlético de Madrid, Barcelona and Real Madrid; and the Italians Inter Milan, Juventus and Milan.

The group is still awaiting the decision of three more participants to close in 15 founding clubs: Bayern Munich, Borussia Dortmund and Paris Saint-Germain.

How does Superliga impact the football market?

According to the representatives of the associations, the competition should provide greater economic growth than the current model of the Champions League.

Today, the prize money is offered by sponsoring companies and also via broadcast rights, which are sold to thousands of broadcasters around the world.

The proposal is that the founding clubs receive, together, €3.5 billion in the first season. The money would be to support infrastructure investment plans and to offset the impact of the Covid-19 pandemic. In addition, the Superliga would contribute €10 billion in so-called “solidarity payments”.

Today, these “solidarity payments” are made by UEFA to clubs that do not compete in the Europa League or the Champions League, but are from the same countries as the teams participating in the group stages of these competitions.

If this value is confirmed, it will be higher than the amount paid by UEFA to clubs in all competitions (Champions League, Europa League and European Super Cup), which generated €3.2 billion in broadcasting rights in the 2018/19 season – before of the pandemic.

How much does a team earn from UEFA and how much would it earn from the Superliga?

According to official award figures for the 2019-20 season, a winning team in the Champions League, with 100% success, would receive €132.7 million. That’s because, in addition to receiving €15 million for qualifying for the group stage, each victory in this stage nets clubs a €2.7 million prize.

Because of the pandemic, the scenario for 2020-21 should be different. By being European champions winning all their games of the season, the team could receive €127.4 million.

It is worth mentioning that participating clubs also receive money according to the “marketing factor” of each one of them.

The market factor of each association is determined by some indicators, such as the team’s position in its national league, its position in the Champions League and the total number of teams from that country participating in the competition. Thus, considering the evaluation of the teams, each of them will receive a part of the total amount.

The latest award is determined following each participant’s ten-year history: UEFA uses the Club Coefficient Ranking – which takes into account all the international competitions each team has played in ten years – to split €585 million among all teams who play in the Champions League , the famous Champions League.

UEFA has not yet released the official amounts to be paid for the 2020-21 edition of the competition, which has already started.

Superliga’s proposal is to pay more to participating clubs. While the most a competitor can earn in the Champions League is US$153.3 million, in the Superliga everyone would earn around US$425 million.

Can teams involved in the Superliga be punished?

The Superliga organizers guarantee that the clubs will continue to compete in the national championships – but not the Champions League. But the creation of the new tournament has generated discussions and criticism.

UEFA has said that it will punish those involved, sportingly and judicially. Among the measures are the ban on national and international competitions, in addition to prohibiting players from these teams from defending their respective teams in the Club World Cup.

This, of course, influences the athletes’ careers and the teams’ finances (players’ and employees’ salaries, travel, structure and training, for example).

The idea is for the Superliga to start in August this year. However, discussions between the ECA (European Club Association), UEFA, FIFA and the Superliga organizers are still ongoing – and they promise to provide a backdrop.

 

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