A private league

Some of the top soccer clubs in the world have announced their willingness to create a new European super league, as an alternative to the current European Champions League organized by UEFA, the European governing body. According to MURAD AHMED and ARASH MASSOUDI from the Financial Times, "up to 12 clubs have signed up to a plan, backed by $6bn in debt financing from JPMorgan, to launch a new tournament that would supersede the Champions League, currently the continent’s top annual club competition."

"The new league, according to documents seen by the Financial Times, would involve 20 clubs with 15 being “permanent members”, meaning they could not be relegated and would not need to qualify through strong performances in national league competitions.The founder members would be granted between €100m-€350m each and would continue to play in their national competitions, such as England’s Premier League and Spain’s La Liga. With expected revenues of €4bn for the competition through media and sponsorship sales, clubs would receive a fixed payment of €264m a year.The moves threatens the existence of an open, fair and unified soccer." 

One of the reasons of social segregation is the existence of groups of wealthy parents that prefer to send their kids to exclusive private schools and abandon the collective system. Of course, they may still have to pay taxes, but they will use their political power to erode a system in which they have no special stake.

It is not the first time that top European clubs threaten to secede, although this time they seem more credible than ever because of the severity of the COVID-19 crisis. In the early days of the crisis, economist Stefan Szymanski advocated for a mutualized exit from the crisis. Now twelve top clubs have decided to propose exactly that -with them in command.

Soccer is a unified sport unlike basketball (Branko Milanovic makes also a useful comparison with tennis), where small and big teams are integrated in a coherent system where the same players play for club teams and national teams in hierarchical related competitions and a coordinated calendar. To understand how the institutions have evolved with globalization, an article by Branko Milanonic in 2005 and two blog posts by the same author are very helpful. In one of them, he criticizes the statistician Nate Silver for proposing to break the power of the governing bodies along the lines of what the top clubs are now proposing.

In his piece criticizing Silver's proposals, Milanovic says that there are two possible collective choice methods: the one individual-one vote method that prevails at the national level, and the one country-one vote method that prevails at the international level. He accepts that globalization requires some changes in the one-country one-vote method, and that the Internet may make it possible to extend the one-individual one vote method at the global scale. But he argues that the shortcomings of the current global system are no excuse to replace it by the one-dollar one vote method. In his piece about corruption in FIFA he argues that we must choose between "dirty devolution of power or (seemingly) clean oligarchy." The terms of the trade-off may not only not be improving, but they may be deteriorating. The super league chaired by Florentino Pérez (a man in the peak of the Spanish lobbying system trying to expand internationally) with the participation of Joan Laporta (the current Barça president, an ally of the controversial media company Mediapro), may achieve both a return to, or consolidation of, oligarchy and an expansion of corruption. Kleptocracy and corruption can be complementary unless collective institutions keep the dark side of soccer under strict control. This is a problem of efficiency and equity: the size of the pie could be bigger (more games between top teams) and distribution of the pie could be better. But modest teams do not only want money to be compensated from the big teams getting bigger. They also want to play against them, and to keep alive the dream of winning one day big tournaments. Now the top teams propose to enlarge the pie and to keep to themselves the power to cut it and share it. It is as if the rich decided to stop paying taxes because they will from now on be in charge of redistribution.

There are other ways to make soccer more efficient in addition to having more games between top teams. European soccer could be played more on the week-ends, some small national leagues could be merged, and more could be done for the national leagues to stop being the last refuge of the white man. Is a more efficient, unified, clean,  totally open-league soccer system still possible? Perhaps, but not without some sort of public intervention. The problem is that there is no global government and soccer is a global phenomenon.