When Fans Strike Back: The Dramatic Rise and Fall of the European Super League​

By Curtley Bale​

The Story

Last week, the international football community rode a wave of shock, fury, and eventual relief within the space of a few days.

The initial shock and fury began last Sunday when reports began to circulate of a breakaway European Super League (ESL) which would rival the well-known and prestigious Champions League tournament. The ESL soon published confirmation of the plans for the 12 breakaway clubs, including six English teams. The 12 “founding members” of the ESL were Real Madrid, Atletico Madrid, Barcelona, AC Milan, Inter Milan, Juventus and six English clubs: Manchester United, Manchester City, Liverpool, Arsenal, Chelsea and Tottenham Hotspur.

Arguably, one of the main drivers behind the league is its huge ‘guaranteed’ profitability. The 15 permanent teams would become owners of a new company incorporated in Spain to share the media and sponsorship rights. This resembles American sports leagues, where there is never a threat of relegation. In stark contrast, the current system of football across Europe is performance-based with clubs facing a constant threat of relegation.

It was estimated that the tournament would generate €4bn in annual revenue, almost double that of the rival Champions League tournament (Financial Times). This prospect is made more attractive in the face of the coronavirus pandemic, where football teams have lost approximately €2bn in revenue (Deloitte). Drawn like a moth to a flame, the prospect of a ‘guaranteed’ revenue stream promised by a closed-shop formation was enticing to the football teams’ owners who struggled with debt and cash-flow issues brought about by the pandemic.

Despite the initial enthusiasm of the architects of the ESL, fan reaction was hostile and icy. Former player-turned-pundit Gary Neville dubbed the ESL as the “end of football as we know it” (Sky Sports). The pouring of outrage continued for the next 48 hours with players, pundits, managers and even Boris Johnson and Emmanuel Macron condemning the greed of the 12 teams. Johnson went as far as promising to take any measure necessary to prevent the breakaway league – including drafting legislation and facilitating an independent review into the way football is run in England.

Less than 72 hours after the announcement, all six English clubs had withdrawn from the ESL. Teams across Europe soon followed suit. As fans began to breathe their sighs of relief, Barcelona and Real Madrid, (whose President, Florentino Perez, was the mastermind behind the competition) still remain committed to the ESL. Whilst the issue is now dead in the water, reform of the European competition and its pay structure is almost certain. Although the complaints of the big teams have not been answered, one thing is for certain – football is still for the fans. As famous managers Jock Stein and Sir Matt Busby once said, “football is nothing without the fans”.

What It Means For Businesses and Law Firms

A score of US and UK firms have been called to advise on immediate matters pertaining to the ESL; ranging from acting as the general legal counsel to individual clubs which constitute the League, to advising on more specific intellectual property and financing implications. Examples of the former include Baker McKenzie advising F.C. Barcelona, while Clifford Chance has taken the lead adviser role for Real Madrid C.F. Reportedly, Clifford Chance is also advising the group of clubs on the trademark filing for the breakaway league in Spain, whilst Latham & Watkins has taken the lead role for JP Morgan, the ESL’s financier (Law.com). In the short term, the disbandment of the ESL may take a toll on these law firm’s projected revenue.

However, from a long-term perspective, one may raise two questions. Firstly, it will be interesting to see how this event will shake up European competition and anti-trust law. According to Neil Baylis, a partner and competition law expert at Mischon de Reya, “litigation certainly seems likely given the sums of money at stake.” Both sides, the clubs and football authorities, could seek to argue that the other is in breach of competition law (City A.M.). Clubs could claim an abuse of a dominant position or any anti-competitive conduct if authorities prevent them from playing in both the ESL and domestic competitions.

On the other hand, football authorities could argue that rebel clubs are creating a cartel. Secondly, the dramatic unfolding ESL-saga may only be the prelude to a long and bitter war between the European and US sports models. Darren Bailey, a consultant at Charles Russell Speechlys and formerly of the Football Association, argues that the European courts have failed to appreciate the extent to which sports need to be regulated differently to other markets (City A.M.). Regardless of its future outcome, the ESL-saga demonstrates that when fans strike a red card, law firms will be at the receiving end of a green card.

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