The European Super League failed because it pushed a ‘socialist’ system with roots in American sports – and its organizers’ biggest mistake was not realizing why fans would hate that

Juventus super league
  • 12 of Europe’s richest soccer clubs tried – and failed – to form a breakaway “Super League.”
  • The ESL would have marked a move in the direction of American sports, which experts say are more “socialist” in structure.
  • Fan backlash led to a quick collapse. “These Super League guys didn’t do their homework,” Andrei Markovits said.
  • See more stories on Insider’s business page.

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.

Leicester City
Leicester City scaled England’s football pyramid against long odds.

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.”

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JP Morgan says it regrets backing the failed European Super League with $4 billion of financing: ‘We clearly misjudged’

Super League
Soccer fans protest plans for a European Super League.

  • JP Morgan says it “misjudged” its decision to offer $4 billion in finance to the failed European Super League.
  • JP Morgan had said it would offer debt financing to the 12 soccer teams, who wanted to form an elite breakaway league.
  • Clubs quickly withdrew from the closed tournament after intense backlash from fans, players, and politicians.
  • See more stories on Insider’s business page.

JP Morgan said it “misjudged” a deal to finance a breakaway league for 12 elite European soccer teams, which collapsed following furious backlash from fans.

The US investment bank committed more than $4 billion in debt finance over 23 years to the 12 founding teams of the league, some of the best in Europe. The debt was secured against broadcasting rights for the tournament, according to the Financial Times.

Twelve clubs announced plans to breakaway from the UEFA Champions League, the top European-wide competition, on Sunday. They would form their own Super League, they said, sparking outrage from fans, players, politicians, and even the UK royal family.

The plan quickly unraveled. By Wednesday all six UK clubs had pulled out. Italian teams AC Milan and Inter Milan, and Spain’s Atletico Madrid, said they would also withdraw.

The new competition planned to include Manchester United and Real Madrid, among other top clubs.

A JP Morgan spokesperson said: “We clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future. We will learn from this.”

Critics said the scheme risked turning European soccer into a “money-grabbing” exercise similar to US sports leagues like the NFL, and undermined the ability for smaller clubs to beat the odds and win against top teams.

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Juventus shares tumble 12% while Manchester United slides as European Super League soccer plan implodes

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Cristiano Ronaldo plays for Juventus FC.

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.

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JPMorgan gets backlash from soccer fans after backing the Super League, Amazon denies supporting it

chelsea european super league
  • On Sunday, 12 top soccer clubs announced plans to join a closed league, called the European Super League.
  • JPMorgan invested $4 billion in the new league, while companies like Amazon denied supporting it.
  • The bank faced backlash from soccer fans on Twitter who were upset about the new league.
  • See more stories on Insider’s business page.

JPMorgan faced the ire of soccer fans on Tuesday after it was revealed that the bank was backing the European Super League to the tune of about $4 billion.

On Sunday, 12 top clubs from England, Italy, and Spain, including Real Madrid, Barcelona, and Manchester United, announced plans to participate in the new, closed league. The announcement sparked a significant backlash in the sports community. Top players, as well as government officials, spoke out against the new league.

And by Tuesday afternoon, several clubs, including Barcelona and Manchester City, reportedly decided to withdraw from the league following criticism. Chelsea fans protested outside the team’s stadium on Tuesday, leading the club to withdraw the same day.

On Twitter, numerous soccer fans called for a boycott of JPMorgan.

“If your bank is @jpmorgan you simply have to move your money elsewhere,” one fan posted on Twitter. “Say NO to the #SuperLeague.”

Fans also called for a boycott of services that would stream the Super League games, pointing fingers at Amazon and ESPN.

“To all footbalfans: if the SuperLeague arrives, refuse to choose the TVchannels they will use: If they cannot make money, JP Morgan and the greedy clubs will soon loose their appetite,” one Twitter user wrote.

Streaming rights to the European Super League could be a major boon to media groups like ESPN and Amazon Prime, likely on par with the NFL.

Amazon responded to claims the company would stream the Super League events and said it “understands and shares the concerns of fans.” The company said it has not been involved in any discussions about the new league.

A primary concern among fans was that the new league meant increased control over the game from American corporations. The Super League would be more reminiscent of US sports leagues than European ones, as the league would no longer regulate teams to lower levels based on their performance.

Some fans said JPMorgan was attempting to turn European soccer into a “money-grabbing” entity like the NFL.

Other fans cracked jokes and made memes about JPMorgan’s decision.

JPMorgan declined to comment about its backing of the league.

The founding members of the project have already filed motions in several courts against any efforts to stop the foundation of the league, according to The New York Times.

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Major soccer club shares jump after teams unveil new European Super League that counts JPMorgan as a backer

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Juventus and Inter Milan play in an empty stadium in Turin, Italy, on March 8, 2020.

  • The shares of the biggest European soccer clubs rose after they announced a new Super League partly backed by JPMorgan.
  • An investment of around $4.8 billion is expected from the bank, which did not confirm exact numbers.
  • The breakaway soccer league has met with controversy amongst football fans and institutions.
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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.

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Almost 70% of the world’s soccer balls are made in one city in Pakistan – here’s what it’s like inside one of the factories

  • Nearly 70% of the world’s soccer balls are made in the city of Sialkot, Pakistan.
  • Sialkot is home to at least 1,000 soccer ball factories that employ almost 60,000 people.
  • The demand for soccer balls has dropped dramatically during the pandemic, but a factory we visited has its sights on the 2022 World Cup.
  • View more episodes of Business Insider Today on Facebook.

Most of the world’s soccer balls – nearly 70% – are made in one small city in Northern Pakistan.

Soccer ball production is a major source of income in the city of Sialkot, with at least 1,000 soccer ball factories employing nearly 60,000 people there.

But during the coronavirus pandemic, many closed down.

“The demand for footballs has dropped drastically due to the coronavirus because playgrounds are closed, there are no matches, people don’t have the space to play it. So buyers have cut demand by 70%,” said Waseem Shahbaz Lodhi, managing partner of Bola Gema Pakistan, a factory that produces 160,000 balls per month.

At Bola Gema Pakistan’s factory, workers are responsible for all aspects of a soccer ball’s creation, from cutting and molding sheets of hot rubber to patching together the 20 hexagons and 12 pentagons that comprise a ball’s exterior.

“The industry has been around for nearly a century, and that’s why our perfection of skills is amazing,” Lodhi said. 

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FIFA-approved balls like the ones Bola Gema makes can sell for over $100 in the US – more than the monthly wages of some workers who make them.

Ahead of the last World Cup in 2018, Pakistan exported more than 37 million soccer balls across the globe. And Bola Gema has already begun manufacturing balls ahead of the 2022 World Cup in Qatar.

While business is down due to a stall in team sports during the pandemic, Lodhi has been looking out for his workers.

“We’ve been home for two to three months, but the owners of Bola Gema still paid us. So that’s why we weren’t worried,” Saeeda Bibi, a Bola Gema factory worker, said.

The company also created a store where workers can buy household products at a discounted price.

The shop is made possible through a 10% premium on soccer balls sold to foreign buyers through the Fair Trade Association, Lodhi said. That 10% is taken back to provide lower prices at the store for Bola Gema employees.

As the pandemic drags on, Lodhi hopes that the soccer ball industry will bounce back.

“We are getting new inquiries, and we are hoping that despite the corona pandemic, we will start getting orders,” he said. “And the production that fell by 70% will gradually start getting better, and we won’t be forced to close the factory.”

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Israeli soccer team whose notorious fans chant ‘death to the Arabs’ set to be bought by sheikh from Abu Dhabi for $100m

Beitar Jerusalem fans chanting racist slogans in 2013
Beitar Jerusalem fans have a history of chanting anti-Arab slogans

  • A member of Abu Dhabi’s royal family is in advanced talks to buy Beitar Jerusalem.
  • The sheikh is reportedly set to invest $100 million in the soccer team.
  • The club has a long history of chanting anti-Arab abuse and targeting Muslim players.
  • Beitar Jerusalem’s owners have travelled to Dubai to try and bring negotiations to a close.
  • Visit Business Insider’s homepage for more stories.

Sheikh Hamad bin Khalifa al Nahyan, an Emirati royal, is set to buy a major stake in the Israeli soccer team Beitar Jerusalem. The team is infamous in Israel for having fans who have consistently targeted Muslim players and chanted anti-Arab abuse.

It is being reported that al Nahyan will purchase about a 50% stake in the club at a price of $100 million, according to Middle East Eye.

The club’s owner, Moshe Hogeg, traveled with Beit Jerusalem’s senior executives on Thursday to try and close the deal. Naum Koen, an Israeli businessman based in the United Arab Emirates, is responsible for brokering it.

Talks of a deal were first reported by Bloomberg in September. This was shortly before an agreement was signed in Washington which normalized ties between the UAE and Israel.

Hogeg is hoping to “close matters” during the trip to Dubai, he told Israeli website Walla.

In a statement on the club’s website, Hogeg confirmed that negotiations are going well and “seem to be progressing.”

He said: “I hope there will be something to announce shortly.”

In the statement, Hogeg also addressed the club’s reputation for having fans who hold an anti-Arab sentiment. He insisted that racist fans are only a “minority.”

He also added: “We do not do racism. Not in the Holy City and certainly not on my watch.”

The club’s controversial history might suggest otherwise.

Beitar Jerusalem is the only club in the Israeli Premier League to have never signed an Arab player.

In 2012, a violent group of fans – referred to as ‘La Familia’ – flooded into a mall in Jerusalem and chanted “death to Arabs.” That slogan has become commonplace at soccer games since then.

A year later, fans protested the signing of two Chechen Muslim players. Shortly after Zaur Sadayev and Dzhabrail Kadiyev were introduced into the team, members of La Familia set fire to one of the club’s offices.

Prime Minister Benjamin Netanyahu, who supports the club, condemned the acts as “racist.”

As recently as last year, CNN reported that Beitar Jerusalem fans demanded that Ali Mohamed – a Christian player from Niger – change his name to sound less Muslim.

In response, Hogeg threatened to sue the fans responsible for these demands.

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