The recent decision of the European Court of Justice (ECJ) denying UEFA the right to stop the European Super League (ESL) illustrates the dilemmas facing the football (soccer) industry.
FIFA (the global non-profit governing body) and UEFA (its
European affiliate), both headquartered in Switzerland, are part of an
international monopoly that acts as the gatekeeper of a global club good: the
right to play football at the “official” (both professional and amateur) level.
We are talking about the most successful and unified global sport. And it is
successful, among other reasons, because it is unified.
That is why the ECJ decision does not guarantee the success
of the ESL. Without the English (also, the French and German) clubs, it will
just not happen. To some extent, the English Premier Legue is already the true
ESL. Internationally, the unification of football’s rules and calendar brings
value to the fans and stakeholders. It is true that one could think of making
numerous improvements, but the challenge is to make them without eliminating
the unified character of the current setting.
However, the ECJ has concluded that FIFA and UEFA (both
regulators and promoters of competitions) abuse their dominant position. How to
solve the problem of abuse of dominant position? Traditionally, market power
has been addressed through three mechanisms: competition policy (antitrust),
monopoly regulation or public ownership. One can discard the latter in this
field (not necessarily in others), because of the diversity of club ownership
models and the involvement of federations and other traditions of self-organization.
Also, given our fragmented institutions at the global level, there wouldn’t be
a way to organize a system of public ownership of planetary scale. That does
not mean that the issue of ownership (club-states, tycoons, sportswashing, the
German model, member-owned clubs…) should not be the object of (interesting)
The ECJ seems to advocate for a pro-competition model, where
agents other than the federations can organize events and tournaments without
their permission. In its decision, the principle is clear, but not the way to
implement it (it is not the job of the ECJ). Economist Stefan Szymanski’s book “Playbooks
and Checkbooks” has a chapter on the history of antitrust in sport, showing a
dynamic field and many open questions, among them the treatment of Sports leagues
as joint ventures that make possible a better product for consumers. One could
extend the argument to global arrangements.
A look at basketball shows the problems of a non-unified
approach. The basketball Euroleague shows that the model is possible, but the
lack of a global calendar also shows that the final product could be much
better if it were globally unified in a hyerarchy similar to football.
Not all monopolies are bad -if they can be regulated. The
problem of a global monopoly such as FIFA is that there is no federal global
regulator, but a patchwork of decisions by several jurisdictions. When large
democratic jurisdictions have been involved in one way or another (the FBI 2015
investigation, the Bosman Ruling), the changes have been significant. But there
is no day to day regulation.
In Europe, the Champions League or the ESL conquering the
week-ends is still a taboo, but would no doubt be a move in the direction of
efficiency if the losers (modest teams in national leagues) were somehow compensated.
The current structure, although it is very successful, is
still inefficient (there is money on the table, because there are too many
boring games), and has other important social problems attached to it, such as
corruption, sportswashing or unfairness. My preference is for making progress
towards a global regulation keeping the unified character of football, but it
will be a second best and it doesn’t surprise me that others try other