The Super League debacle will make the city and Wall Street very cautious as they try to get more money out of football again, says ALEX SEBASTIAN
The ‘Super League’ lasted barely three days. Well, three days as a publicly declared proposal.
The doomed project had actually taken years, but despite the slow build-up, it seems spectacularly poorly thought out. Yes, looking back is always perfect, but it’s hard to argue that the people behind it couldn’t see the disaster coming.
Apparently intelligent, experienced, and extremely wealthy people were involved in the Super League plan, but that didn’t stop them from heading for a spectacular failure.
Six English clubs agreed to join the Super League before abruptly pulling out after widespread criticism
Among the skilled and bright people behind the ultimately ridiculous effort to create the runaway league were investment bankers at JP Morgan, who reportedly funded the plan with roughly £ 4 billion.
Where they got stuck there was a profound misunderstanding of football, and football fans in particular, as well as a total misunderstanding about how things were likely to play out in the media.
Football clubs are not companies like manufacturers or retailers. Sports, and soccer in particular, have an emotional and tribal element that is incompatible with cold, tough finances.
From a business perspective, it makes perfect sense to want a “closed shop” tournament. If you own a great football team and are trying hard to make as much profit as possible, the last thing you need is the risk of not going to the top tournament next year because your team hasn’t won enough games this year .
What the Super League plotters didn’t appreciate is that it is precisely this precarious position that makes football compelling. Sport derives its meaning from winning and losing, and the perception of fairness of who wins and loses is paramount.
If you threaten this fairness, you are undermining the essence of the sport and provoking anger among its fans. This anger of the fans then feeds a media and political storm that, as we have seen, quickly blows up such a project.
The owners of the ring-leading Super League clubs Real Madrid, Manchester United and Juventus have also seriously misunderstood some of the other owners’ main motivations.
The owners of Manchester City and Chelsea don’t want to make money. They are so wealthy that the profitability of the clubs they own is subordinated to the prestige and political soft power associated with their ownership.
Alienating fans and being despised by journalists and politicians is the opposite of what they expect from owning a football club. It was no surprise they pulled the plug when the heat came up and triggered the project’s collapse.
The consequences for everyone involved in the conspiracy are not yet fully understood, but they are certainly not good.
Standard Ethics, a research firm that rates companies on sustainability and social skills, has downgraded JP Morgan from “fair” to “non-compliant” because it supports the proposal.
The wrath of standard ethics stems from the social and governance parts of the ESG hattick. The football clubs and the bank have initiated a process that contradicts “best practices for sustainability” and the interests of the interest groups.
JPMorgan Chase is said to have provided funding for the start of the controversial and ultimately failed Super League
This is unfortunate for a well-known ex-politician. Chuka Umunna has moved from unfortunate political parties to banking, and although the decisions were made long before his arrival, he appears to have assumed his position as head of ESG for EMEA at JP Morgan at a very inopportune time.
In addition to wasting time and effort on the project, the bank accidentally damaged its branding and ESG credentials at a time when large companies are desperately trying to present themselves as ethical.
Banks in the city and on Wall Street will have noted JP Morgan’s inglorious role in the Super League farce. They are very reluctant to risk repeating their mistake by supporting controversial sports projects.
Fund managers can now view sports-related stocks with greater skepticism.
Manchester United and Juventus are perhaps the two most famous publicly traded football clubs and both saw high volatility when the Super League plan was announced and then disbanded.
Given the potential ESG pitfalls added to the mix, football club stocks could also get a big spot on the buying side.