As we approach the anniversary of the aborted attempt at launching a European football super league, fans who felt violated must remain vigilant. The economic forces are compelling to Europe’s biggest clubs, so supporters should brace for this unsightly pig to return, albeit with a new coat of lipstick.
In almost all aspects of commercial life, market forces driven by narrow interests determine prices and allocations of resources, and concerns about fairness or inequity receive no attention. While this might conjure up images of CEOs commanding seven-figure salaries, or people paying over $5,000 for an Italian designer handbag, the reality is that ordinary people play this game every day, too.
When you go to the grocery store, you pick the price and quality combination that suits your budget. You negotiate the best possible salary and working conditions when considering a job offer.
The same is true of virtually every part of the football business. Cristiano Ronaldo earns an annual salary of approximately $30 million, while some of the players he plays against in the Premier League earn no more than $200,000, and his youth team colleagues earn less than $50,000. It is simple demand and supply: Ronaldo has a rare talent, and that talent is valued highly by the general public.
Similarly, tickets, soft drinks, team replica jerseys, TV subscriptions to live games, and practically every other good or service that football clubs offer is done so in a capitalistic way. Competition for your dollars is the only constraint: they worry that if they charge too high a price, you will no longer come to the stadium, you will cancel your TV subscription, or you will buy your child a different birthday present. If they can get away with charging more, they will.
However, there is one exception to this raw capitalism: how TV earnings are distributed among the teams. In most leagues, including the English Premier League, the teams collectively bargain for them and distribute them in a socialist-leaning way.
That means that smaller clubs get a larger slice of the pie than they would if everyone had to fend for themselves, and the biggest clubs get a significantly smaller slice of the pie. It is one primary reason for the source of tension between bigger clubs and football authorities: the former correctly perceive that they are being denied a larger slot at the feeding trough.
While this policy has a socialist veneer, football authorities such as the English Premier League and UEFA are anything but vanguards of egalitarianism. They are motivated by the view that fans value some degree of equality in football because competitive balance makes the game more attractive and earns everyone more money. The world’s most capitalist society is the USA – adopting even stricter socialist measures in its professional sports league, with the best draft picks every year going to the worst teams in American football, baseball, and basketball.
The owners of the top clubs used to find this arrangement satisfactory because they were people who lived in the same towns and who could feel the pulse of regular supporters. Buying a club was more than just an investment, and they were not myopically fixated on profits.
Moreover, the previous generation of owners had a personal affinity for football from childhood. They had an emotional stake in the game, and the thought of football being permanently ruined by a bunch of fat cats was genuinely horrifying.
Today, the ownership environment is very different. The majority of shareholders in clubs such as Manchester United and Chelsea are from faraway lands, and they see their ownership as nothing more than a shrewd investment. They ask themselves: if we sell burgers, commemorative DVDs, and replica socks for obscene prices, why can’t we do the same for TV rights? If Ronaldo is going to squeeze every dollar out of us, why can’t we squeeze every dollar out of the fans? And why on earth should we share our profits with Brentford or Watford?
Eventually, they might be willing to accept the socialist American system of professional sports league management. Still, the money on the line means that it won’t convince them until they give the purely capitalist version a good try. After all, Spanish giants Barcelona and Real Madrid negotiate their own TV contracts, and the Primera Liga is still doing fine.
Of course, the experiment may cause irreparable damage to football as fans permanently become disenchanted with the game. But in a balanced portfolio, some investments are bound to fail. In that case, you shrug your shoulders, write them off, and move on to the next venture. And it’s because of that attitude you can be sure that the top clubs are going to relaunch the European super league sooner or later.