It’s okay folks. Those bastions of the people, Roman Abramovich’s Chelsea and Abu Dhabi’s Manchester City have interceded to save the day on behalf of Joe Football Supporting Public. They pulled out of the tri-nation Super League, followed semi-swiftly by the other four English clubs. ‘Pres Perez’ called a Zoom meeting but couldn’t keep the band together. So much for the Little Power-Grab That Could. Sorry if you were one of the not-so-vocal few who thought that watching Cristiano Ronaldo face down one of Harry Kane, Zlatan Ibrahimović or Kylian Mbappe on a weekly basis might not be the worst thing, especially on a bespoke streaming service which wouldn’t force you to also subsidise golf, rugby, Formula One and a load of other sports and teams you don’t care about. You lose. It’s not happening.
Or so it seems. For now. At time of writing.
Peter Farrelly’s reaction here on Monday to the proposal was a well-articulated distillation of the anger felt by many with a deep and personal connection to football at the announcement of a breakaway Super League. But what did we really witness this week? A smash and grab for power? Pure greed? Betrayal of football supporters? Elites doing what elites do? Or, on the other side, mass inertia and fear of change? I didn’t find any of these explanations satisfactory.
I did find myself talking to students on Tuesday about the then-still-breathing Super League in a lecture about digital commerce and the sociology of the economy. A few slides later I was giving a potted explanation of the ongoing developments around GameStop. The phenomenon linking these two phenomena? Financialisation. This is the facet of capitalism which concentrates economic activity into the protection and proliferation of wealth through strategic investment based on perceived future value. The climactic scene in Trading Places is ostensibly a gaggle of men trading stock in frozen orange juice. But you never see an orange, or a glass of juice. What’s really happening is betting, based on varying degrees of knowledge about possible demand and price. Financialisation takes the emphasis away from the content and character of the economic transaction. In essence it doesn’t matter if what’s being traded is oil, a mortgage bond, a football club, or frozen orange juice. It’s the ability for that thing to hold monetary value.
What makes football an attractive bet for someone out to protect and grow wealth through investing money in player transfer fees, high wages and expensive stadiums? Lots of people pay to watch it. And they watch it live, making it an ideal proposition for advertisers and team sponsors. They watch it live, because of the uncertainty of the outcome. For most people, knowing the result takes away the enjoyment. In a competitive and fragmented media market, this live unfolding drama helps explain both popularity of live sport and also why many flagship reality TV shows are nearing their 20th seasons. Uncertainty also fuels one of football’s biggest backers and advertisers, the gambling industry.
So, eyeballs, but the key is many eyeballs. You might have seen The Big Short and recall the opening in which Ryan Gosling gives an explanation of mortgage-backed securities, forerunner to the Collateralised Debt Obligations whose collapse in value in 2008 directly precipitated a global recession. The logic of these bonds was that, while an individual mortgage represents a small investment with a small yield, if you combine a lot of mortgages into one asset, its yield over time is significant and reliable. Why? Because people usually pay their mortgages and the interest: default is the exception. So we thought before 2008.
A similar logic steers the likes of John Henry and Fenway Sports Group’s investment in football. A few fans might cancel their subscription, but there are enough eyeballs out there for it to be worth TV companies’ while to bid high for the rights.
But then we arrive at a paradox centring on the very uncertainty which drives those viewing numbers. Uncertainty in the short run is okay, but over the long run, how does John Henry convince his board to fund the next £125 million signing if it’s in no way guaranteed that player will be in the Champions League next season or the season after? Though some have sneered at Tottenham Hotspur, it is difficult to dispute that the six English clubs who put their name to the Super League are the six dominant clubs in the Premiership. In most years, four of the six will qualify for the Champions League, with the others down on their projected income. Given there seems no prospect of additional Champions League places for English clubs, the guarantee of elite competition in the Super League was too alluring to turn away from.
So, if an elite football club seems like a good place to put your money, then an entire league taking place in 12 of the world’s biggest and most iconic stadiums among the best footballers on earth must sound good to some. And so it did. Now while the Super League ‘Dirty Dozen’ have been taking it in the ear all week, Peter Farrelly’s Slugger post on Monday was one of the only pieces I read calling attention to the role of JP Morgan. The merchant bank was in line to put up £2.7 in investors’ money to finance the league and now appears to have incurred a hit to its most recent sustainability rating – https://www.theguardian.com/business/2021/apr/21/jp-morgan-chase-gets-sustainability-downgrade-standard-ethics-after-funding-failed-super-league , though who knows whether this downgrade is because of the Super League flop or a combination of factors.
What, then, is the connection to GameStop? In some ways, financialisation of football is relatively straightforward. Elite football has been a growth industry over successive decades, with clubs and leagues generating huge revenues. So investing gets you a share of the profits, with huge losses being relatively rare. That type of investment is now dwarfed in size by the derivatives market. Since February, the price of shares in high street retailer Game Stop has been going the opposite direction to where people expected: up. This is driven largely by non-professional investors inspired by online discussion threads highlighting how large hedge funds had been buying up short position derivatives, in other words betting on Game Stop’s demise.
Now, there are dark corners of the web, darker than I recommend spending too much time, where you can find people linking the Super League fiasco to some apocalyptic-sounding economic predictions arising directly from the Game Stop saga. For now, I am content to the offer the following observation. As a society we hold sport in this special emotional place, separate and distinct from other economic activity, other areas of trade and labour. I think this is because as children, we could understand the game long before we understood anything about wages, or contracts or the difference between a manager and an owner. So we think of it as something simpler and purer than the otherwise complex mess that society is. (Probably also the reason many people still wish sports and politics wouldn’t mix.) And, yes, as an industry, football it is different in key respects. But separate it is not. It is right at the nexus of contemporary capitalism and geopolitics and, to my mind, all this week’s announcement did was drop any pretence to the contrary. Peter’s article on Monday was also the only one I saw to mention his beloved Dundalk FC, though not in the context I had thought of. Its owners? Peak6 Investments. Their slogan? “We’re in the Business of what Ought to Be”. Further down their homepage they describe themselves as “Rooted in Trading; Growing through an Options-Thinking Approach.” For Peak6, Dundalk looks on paper just close enough to Dublin and Belfast to grow its support and become a potential member of the second or third tier of European football and thus, again, a nice story for investors in ten years’ time.
All this begs the question, what was it precisely that people were against and what is it that they’re for. The phrase ‘naked greed’ was used a lot:
Pure naked greed, completely at odds with the culture of football clubs being representative of communities. The second that we allowed the likes of Abramovich and Henry to get a foothold in the game, this was always the end goal. I'll be doing a video on this tomorrow.
— Rory Jennings 🍊🦩 (@Chelsearory) April 18, 2021
Is it the case that, indeed Rory, we don’t like naked greed: We like our greed sharply dressed, fake tanned and roots dyed? The visceral moral outrage witnessed in media and at stadiums was partly spontaneous, but also martialled to a significant extent by stakeholders in the status quo: from TV companies to second-tier clubs. Time will tell if this is the moment when that status quo began to be re-evaluated. But you would wonder how much staying power there is in a movement which spanned from Owen Jones to Nigel Farage (who by Tuesday night had switched from using #FootballAgainstSuperLeague to his more tried and trusted #BrexitBritain while directing an untasteful taunt at the aforementioned JP Morgan).
Also worth mulling over is how something as significant as the Super League could fail so quickly. An interesting wrinkle in the plot is that the first two clubs to blink, Chelsea and Manchester City, are probably the ones of the twelve least concerned with revenue per se and most with prestige. So unpopularity was much more aversive to Roman Abramovich and Sheikh Mansour than unprofitability, because their real wealth is secured in distant oil wells. Fans’ reactions were enough to either spook those owners, or presented an opportunity for a favourable news cycle.
But here is where I think the weirdness lies in the sequence of events from Sunday to Tuesday which I have no doubt will be reported out over time. I have followed a lot of the events through the excellent Second Captains podcast, where co-host Ciarán Murphy made the point that it seems inconceivable that something like this would launch with no accompanying professional PR drive, no attempt to engage influential fans to gather support for the concept. Again, the ready explanation which fits the dominant narrative is arrogance on the part of the key players. Why would we need to explain? We own football clubs. We didn’t get this wealthy making bad decisions. But where was the plan? The announcement got moved around on Sunday, suggesting possibly some reluctant signatories. Some public communications still said 15-team league even with only 12 named. Did something cause this to go from important, to urgent, to extremely pressing/now or never guys? Hopefully some journalists will ask those questions, even if the answers may not be forthcoming.
Finally, to the big question that remains. Was it the idea of joining a self-appointed elite that put off football fans, or the weird way it was announced and the vague and off-putting format? Former Republic of Ireland and Stoke striker Jonathan Walters tweeted a picture of a sign held aloft by protesting Chelsea fans. It was harking back to an infamous comment by former Sky pundit Andy Gray who questioned whether Lionel Messi could hack the Premiership. https://www.goal.com/en-us/news/85/england/2010/12/21/2271248/top-epl-journalist-andy-gray-lionel-messi-is-not-good-enough-for-
It said “We Want Our Cold Nights in Stoke”, I wonder do they really.
— Jonathan Walters (@JonWalters19) April 20, 2021