Manchester United fans have invaded the Old Trafford pitch to protest against the club’s American ownership.
About 200 individuals are believed to have gained access to the pitch via the Munich Tunnel after pushing down barriers, The Guardian reported.
Supporters are demanding change at the top of the club, which is under the control of the Glazer family, following the failed bid to join the controversial and now-defunct European Super League.
Billionaire co-chairman Joel Glazer apologized to supporters on April 21 for signing up to the breakaway project but many United fans are not placated. Some carried placards at the protest reading “apology not accepted” and others chanted “Glazers out.”
Videos from the pitch invasion show supporters shooting flares.
Speaking ahead of the protest, United manager Ole Gunnar Solskjaer said: “It’s important that the fans’ views are listened to and we communicate better. My job is to focus on the football side and that we have the best possible team.
“As I’ve said before I’ve been backed, I’ve had great support from the club and the owners and I’m sure I will get the backing again to go one step further. When the protests are on, it’s important they go in a good fashion and that we keep it peaceful.”
The club is due to play Liverpool later this afternoon but the game has been delayed by the protest. The Premier League was hopeful that the game would still kick off at 4.30 pm, according to the Manchester Evening News.
The new European Super League (ESL) came crashing down recently after nine football clubs pulled out of the plans following huge backlash from fans, politicians, and players.
The 12 teams that were about to join the elite breakaway league would have been handed between 100 million to 350 million euros ($120 million to $420 million), the Financial Times first reported.
The ESL was also planning to receive $4.2 billion in debt financing from JPMorgan over a 23-year period, before the US investment bank said it “misjudged” the deal after the majority of the teams withdrew from the league within 48 hours.
Now, a fan-led review into English football will take place to assess clubs’ finance, ownership, and supporter involvement in the game.
But it begs the question: where does all this money come from in the world of football? Overall, there are three main sources of revenue: broadcasting, commercial, and matchday revenue.
TV broadcasting revenue
TV deals are one of the most important sources of income for football clubs. which can be sold domestically and internationally. Leagues, such as the highly popular English Premier League, own the television distribution rights of all their games.
TV channels bid for the rights to air the matches and the football leagues sells them to the highest bidder. For the Premier League, this happens every third season and is typically Sky Sports, BT Sports, and most recently, Amazon Prime.
Robert Wilson, football finance expert and lecturer at Sheffield Hallam University, told Insider that broadcast revenue typically makes up around 70% of the income of most Premier League clubs.
Although each club gets an equal share of the deal from the Premier League, they also receive merit payments – if they’re shown on TV more, they get paid more.
Wilson said that last year, Liverpool, who won the Premier League, earned around £150 million ($208 million) from the domestic TV rights deal, while Norwich City, who came last, earned around £110 million ($153 million). Relegation is therefore a costly and daunting prospects for clubs near the bottom of the league.
The rights to show Premier League matches between 2019 and 2022 were sold for nearly £4.5 billion ($6.2 billion) in 2018, with Sky Sports getting hold of the majority of the games. This was a drop from £5.1 billion ($70 billion) in the 2016-2019 seasons.
Reportssuggest that when broadcasters bid for 2022-2025 TV rights this summer, they won’t be prepared to spend as much as they did in previous years. Since BT Sports and Sky Sports agreed to a content-sharing deal in 2017, competition dropped between TV channels for the need to bid big, The Guardian reported in January.
“They were trying to produce – in my view – more football and the market was probably saturated,” Wilson said.
Another big money pot for football clubs is commercial revenue – in other words, income from sponsorship and merchandising, ranging from shirt sales, license holders, and retail outlets.
Big brands, such as Adidas, pay license fees to football clubs to stick the club’s logo on their shirts. As an example, Wilson said Adidas pays Liverpool a flat fee of £75 million ($10.4 million) to license the production of their replica jerseys.
“It doesn’t matter if they sell one shirt or a hundred million shirts, they still get £75 million,” Wilson said.
He also said the shirt sponsor, which is stuck on the front of the football shirt, is also a source of commercial revenue, as well as shirt-sleeve sponsors. Some of this revenue goes into the other parts of the club, such as the women’s club, he added.
The merchandising aspect of commercial revenue was hit hard during the COVID-19 pandemic because of the closure of shops, Dr. Nicolas Scelles, senior lecturer in sports management at Manchester Metropolitan University, told Insider.
“They can still sell online, but of course it affects the commerical revenue,” he said.
The final major source of income for clubs is the money they earn on the day of a match. This includes matchday sponsorship, the sponsor on the ball, and most importantly, tickets sales.
The expensive corporate boxes, which business people use to entertain clients in, contributes to the total income, as well as food and drink sales.
It’s important to note that matchday revenue varies depending on the size of the club stadium – a bigger stadium with more fans, such as Arsenal’s Emirates stadium, will generate more revenue on a match day.
Scelles said this type of revenue has been affected the most by COVID-19 considering that stadiums were forced to close for the majority of 2020.
Transfer fees can also be income, Scelles said, as well as club owners’ injecting in their own money, but these two factors aren’t consistent sources of revenue that keep every football club up and running.
So why do clubs end up drowning in debt?
Player transfer fees and players’ salaries are the two main things that football clubs spend their money on, and they’re not cheap, especially when there’s no cap on how much players earn.
The most expensive transfer fee so far was Neymar da Silva Santos Júnior who transferred from Barcelona FC to Paris Saint Germain (PSG) for £200 million ($277 million) in 2017.
Wilson said it’s not uncommon for a number of clubs to spend more than they earn, and many have 140% of expenditure to turnover. The expenditure usually gets underwritten by future revenues, he added.
“Because the TV deals and the sponsorship arrangements are multi-year, they’ve got some guaranteed future revenue. But then they tend to accrue large debts and that’s why we see frequent instances of ownership change,” Wilson said.
Ownership transition can happen when a club ends up in millions of dollars of debt and a new owner takes over from the previous one to inject more money into the club. But this starts the cycle all over again, Wilson said.
The piles of debt stem from the huge competition between the teams. They’re all fighting to win the most trophies, nab the best players and be the best in the league. As a result, they hike up players’ salaries and transfer fees.
This “winner takes all scenario” sets benchmarks for other clubs, Wilson said. For example, Neymar being transferred for £200 million lifted the entire ceiling for how much transfer fees should cost, he said.
Wilson believes football’s financial system isn’t sustainable. “These losses are almost accepted as part and parcel of the financial model,” he said. “There’s loopholes and grey areas,” he said.
The only reason why there’s a review into the finances after the European Super League is because the clubs involved are some of the biggest in the world and the logistics of the league sparked uproar from loyal fans, Wilson said.
From a business perspective, Scelles doesn’t think clubs being in debt is a bad thing as the money is being used to generate more revenue, develop the club, and extend it internationally. But he said there needs to better financial management in place, even though this is hard to regulate in football.
Last Sunday night, the shock announcement of a breakaway “Super League” signaled that European soccer was about to get a whole lot more American.
That is, until a global backlash spanning everyone from the media to die-hard fans spurred a quick collapse.
A series of shock events over a roughly 48-hour period saw nine of the 12 ultrawealthy soccer clubs that wanted to form the league pull out, but that wasn’t the only unexpected development. Fans were furious that their favorite clubs were going to get richer from this arrangement, and they lambasted them for turning their backs on the current league structure, which is widely seen as problematic.
Prominent former players announced their own disgust.
“Manchester United, 100 years, borne out of workers from around here, and they’re breaking away into a league without competition that they can’t be relegated from? It’s an absolute disgrace,” respected football commentator and longtime Manchester United player Gary Neville said Sunday on Sky TV.
Still, even Neville said the current capitalist status quo isn’t perfect, and that competition has to “evolve.”
The casual American fan may be looking on with more than a little confusion. After all, why wouldn’t fans want a league that regularly pits Europe’s most famous and historically successful clubs against each other? To understand the outrage, you have to understand the economics of the European “football pyramid” and how an “American-style” closed competition clashes with more than 100 years of tradition.
Most fans want the biggest and wealthiest clubs to play against each other more regularly, as the Super League promised, but not if it means embracing what experts call a “socialist” structure that resembles American sports. They would rather have the inequality they’re used to in their domestic leagues, where a lack of coordination pits clubs ruthlessly against each other, and paradoxically results in less of the “competition” that prominent voices like Neville defended in the wake of the Super League announcement.
A closed competition vs. a football pyramid
The National Football League, Major League Baseball, and National Basketball Association all operate as closed systems, where teams can’t be kicked out.
American leagues are effectively set up as single corporate entities, with all their teams operating as subsidiaries, or franchises. The barriers to entry are so high they’re impassable. And when new clubs have formed in US sports history, they have formed within rival leagues, such as the USFL of the 1980s, which featured former President Donald Trump as an owner. It doesn’t exist anymore.
It’s not like that in Europe, where every club is treated as an independent corporation that is loosely affiliated in a competitive league format. If that club is mismanaged, it can lose money and get “relegated” to a second division, playing against relatively poorer clubs. This is the “football pyramid,” which in England, for example, features the Premier League at the top, with several divisions underneath it.
Theoretically, a club at the base of the pyramid could make it all the way to the top if it has good enough players. Something almost like this happened just a few years ago, when Leicester City won the Premier League against very long odds. But a so-called big club can tumble down the pyramid or even go bankrupt and enter administration, as happened with Leeds United in 2007.
The league’s most popular and well-funded teams face little risk of falling down the ladder. But the odds are exponentially higher for the smaller teams dotted throughout the UK. Those clubs, and their fervent fan bases, compete with a nearly constant threat of complete failure.
“Once you take away that hope the promotion-relegation system gives you, what will keep these [smaller] clubs alive in the future? The answer is ‘nothing,’ they’ll just die out,” Stefan Szymanski, co-author of “Soccernomics” and professor of sport management at the University of Michigan, told Insider.
The risk of relegation and, perhaps more importantly, the hope that an underdog can ascend the pyramid are what make football a cultural mainstay in England, Szymanski said. Even if the odds of promotion are small, that opportunity is what keeps local teams alive, he added.
“When it comes to sports, the American system looks decidedly socialist, and it’s Europe that looks like the land of opportunity,” Szymanski said. “This is the cartelization of European soccer. It’s formalizing a cartel amongst the elite teams.”
‘Xenophobia has a field day’
The fact that the closed system can be traced back to the US also poses a huge issue to European fans, Andrei Markovits, author of “Offside: Soccer and American Exceptionalism” and a professor of German Studies and comparative politics at the University of Michigan, told Insider. Transitioning the continent’s biggest teams from century-old league structures to one championed by Americans would spark intense feelings of erasure.
“What it means is that xenophobia has a field day … whatever you don’t like, you immediately make it American,” Markovits said. “This is literally anathema to millions of people.”
Even the business case for a closed league is short-sighted, the professor added. A league that represents the peak of international competition “should be soccer’s notion of upward mobility,” the professor said. Closing the Super League off from UEFA’s existing structure eliminates the appeal of teams fighting to stay in the highest ranks. That stands to drag on revenue as fans grow less interested because of a diminished sense of competition.
Although soccer has a global reach, local fans are still every club’s lifeblood. Their backlash will likely be the nail in the coffin for a fully closed model, whether it’s the Super League or a future offering, Markovits said.
“Sports fans are literally the most conservative, most parochial, most tribal beings … who will not agree to this,” he added. “These Super League guys didn’t do their homework.”
Shares in Italy’s Juventus FC tumbled 12% on the Italian stock exchange on Wednesday after controversial plans for a European Super League soccer tournament all but imploded as English teams withdrew.
Manchester United shares were down 1% in pre-market trading on the New York Stock Exchange, after they slid 6% on Tuesday.
“I don’t think that project is now still up and running,” Juventus chairman Andrea Agnelli, one of the key drivers behind the plans for the ESL, said on Wednesday, according to the BBC.
The decision of many of Europe’s richest and most successful clubs to sign up to a highly lucrative new tournament boosted the share prices of the clubs listed on the stock market on Monday.
Shares in Juventus (ticker JUVE), Cristiano Ronaldo’s team, jumped 24% from Friday’s close to Monday’s close on Italy’s stock exchange after the JPMorgan-backed plans were announced.
Manchester United (MANU) shares climbed around 7%, with investors liking the look of a tournament that would make the clubs much richer.
But the plans, which would exclude all but 5 other teams each year, were met with howls of outrage from soccer fans across the continent.
On Wednesday, the entire European Super League project all but collapsed after the six English teams pulled out of the competition. They were: Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham.
Now the tournament – which had also enlisted Spain’s Atletico Madrid, Barcelona, and Real Madrid, and Italy’s AC Milan, Inter, and Juventus – appears doomed.
“It’s been a total debacle for the clubs – investors may be cautious about investing in football teams; they usually are,” Neil Wilson, chief market analyst at Markets.com, said.
The fall took Juventus’ shares down to 0.77 euros (around $0.92), virtually where they closed on Friday. Manchester United’s shares traded at around $16.05 in pre-market, also similar to Friday’s closing price.
The shares of major European soccer clubs jumped on Monday after twelve elite teams unveiled plans to form a new European Super League that will be backed in part by JPMorgan, according to a report on Monday from Bloomberg that cited a person familiar with the matter.
Juventus shares closed up almost 18% on the Borsa Italiana on Monday and England’s Manchester United was last trading almost 10% higher on the day on the New York Stock Exchange.
The two, together with 10 of their top-flight rivals, namely AC Milan, Arsenal, Atletico Madrid, Chelsea, Barcelona, Inter Milan, Liverpool, Manchester City, Real Madrid and Tottenham Hotspur, announced the creation of a European Super League on Sunday.
Three additional clubs are set to join the league, which will hold midweek matches. It will be chaired by board members of the founding clubs, who on Monday stepped down from positions in traditional football associations.
The bank will reportedly support the set-up with financing worth $4.8 billion. JPMorgan’s press office did not respond to Insider’s request for comment.
Fans, other soccer teams, established football institutions and even politicians have spoken out against the formation of the new league. UEFA and FIFA have said that players who take part in the Super League may be excluded from tournaments associated with traditional football institutions and national teams.
Critics say that the move to form a new league undermines the spirit of the game and is largely down to making financial gain from signing up to the new league, playing throughout it and selling the TV rights to those games.
“A club like Man Utd playing in the Champions League, they make between £40-80 million [roughly $55.8 million – $111.7 million] on a good year if they win it,” Kaveh Solhekol, Sky Sports News reporter said. “If they play in this new competition, they get a cheque for £250-300 million [roughly $349.1 million – $419.1 million] to begin with, then in the future they will get three times as much money a season as they get from the Champions League,” he continued.
The European Super League have confirmed that the founding clubs will receive an initial $3.5 billion payment to set up the league.
JPMorgan’s share price was last up around 0.6% on the day.