20 December 2023
In April 2021, plans for a new so-called European ‘Super League’ (ESL) emerged involving some of the biggest clubs in Europe. This was soon dismissed due to public outrage, with 12 of the 15 founding clubs revoking their intention to join inside the first 72 hours. In response to these plans, the union of European football associations (UEFA) issued fines and threatened further sanctions to the clubs and players proposing to join.
Since then, the parties interested in founding the league have accused UEFA of wrongdoing. They argue that, by issuing sanctions on their proposal, UEFA are acting against competition law.
The ESL, and its supporting clubs, are arguing that their proposal did not represent any form of misconduct and that UEFA have acted monopolistically in their response. The European Court of Justice, will deliver its final verdict on the validity of the European Super League this Thursday (21 December 2023).
The founding clubs first argued that the league would appeal to a wider audience of the sport, increasing the number of blockbuster games. The ESL clubs claim that they would have access to more revenue and exposure which can be distributed fairly throughout the footballing pyramid. Many argue against this and claim that the league is motivated by greed and self-interest, which will create a closed shop of elite teams that will dominate the game.
A key concern for many with a breakaway league is the strain this could place on the finances of lower division English clubs, which could lead to a potential increase in bankruptcy petitions by HMRC, as seen recently with Reading Football Club’s second winding-up petition.
Lower division clubs play an important role in the English football pyramid, which larger clubs arguably benefit from, and earlier this year, the government announced a new independent regulator whose main objective is to protect English football. One of the regulator’s key roles will be to prevent English clubs joining exclusive and elitist competitions such as the ESL. The regulator means that, without a favourable ruling from the European Court of Justice, it is unlikely that English clubs will be able to join any future endeavours.
If the verdict goes against the ESL, clubs will be held liable to pay their disciplinary fines and from UEFA’s perspective, will hopefully conclude these plans. If the ruling is in favour of the ESL, however, then plans may even come back into fruition, with Real Madrid and Barcelona still keen on the idea. If the ruling is in favour of the ESL, we might see some English club owners wanting to explore this route again in the future and attempt to circumnavigate any rules imposed by a regulator. If such clubs were successful and were met with public outcry, then it could ultimately lead to a tax own goal.
At the time of the last attempted breakaway, there were calls by ministers to impose a tax on club owners. Tax can be an important carrot in incentivising behaviour, but it can also act as a powerful stick. If necessary, we could see the government exploring whether any breakaway plans could be given the red card with a super tax on club owners, with funds redistributed through the football pyramid.
The verdict will have important implications for the future of European football and its governance, as it will determine whether the sanctions imposed by UEFA were lawful or whether the clubs have the right to pursue their own interests. The knock-on implications for English football remain to be seen but the financial and tax implications could be significant.
Since then, the parties interested in founding the league have accused UEFA of wrongdoing. They argue that, by issuing sanctions on their proposal, UEFA are acting against competition law.
The ESL, and its supporting clubs, are arguing that their proposal did not represent any form of misconduct and that UEFA have acted monopolistically in their response. The European Court of Justice, will deliver its final verdict on the validity of the European Super League this Thursday (21 December 2023).
The founding clubs first argued that the league would appeal to a wider audience of the sport, increasing the number of blockbuster games. The ESL clubs claim that they would have access to more revenue and exposure which can be distributed fairly throughout the footballing pyramid. Many argue against this and claim that the league is motivated by greed and self-interest, which will create a closed shop of elite teams that will dominate the game.
A key concern for many with a breakaway league is the strain this could place on the finances of lower division English clubs, which could lead to a potential increase in bankruptcy petitions by HMRC, as seen recently with Reading Football Club’s second winding-up petition.
Lower division clubs play an important role in the English football pyramid, which larger clubs arguably benefit from, and earlier this year, the government announced a new independent regulator whose main objective is to protect English football. One of the regulator’s key roles will be to prevent English clubs joining exclusive and elitist competitions such as the ESL. The regulator means that, without a favourable ruling from the European Court of Justice, it is unlikely that English clubs will be able to join any future endeavours.
If the verdict goes against the ESL, clubs will be held liable to pay their disciplinary fines and from UEFA’s perspective, will hopefully conclude these plans. If the ruling is in favour of the ESL, however, then plans may even come back into fruition, with Real Madrid and Barcelona still keen on the idea. If the ruling is in favour of the ESL, we might see some English club owners wanting to explore this route again in the future and attempt to circumnavigate any rules imposed by a regulator. If such clubs were successful and were met with public outcry, then it could ultimately lead to a tax own goal.
At the time of the last attempted breakaway, there were calls by ministers to impose a tax on club owners. Tax can be an important carrot in incentivising behaviour, but it can also act as a powerful stick. If necessary, we could see the government exploring whether any breakaway plans could be given the red card with a super tax on club owners, with funds redistributed through the football pyramid.
The verdict will have important implications for the future of European football and its governance, as it will determine whether the sanctions imposed by UEFA were lawful or whether the clubs have the right to pursue their own interests. The knock-on implications for English football remain to be seen but the financial and tax implications could be significant.
Callum Littlefield
Assistant Manager, RSM UK’s Sports & Entertainers Team
AUTHOR
Callum Littlefield
Assistant Manager, RSM UK’s Sports & Entertainers Team