Three critical business lessons from the European Super League debacle

With the ESL concept bombing spectacularly, there are pertinent takeaways here for businesses across the board, not only those in the sport arena.

The failed launch of the European Super League contains lessons for businesses, key among them being to not take your core market for granted.

By Engel Schmidl

The European Super League (ESL) was supposed to bring together the world’s elite football (soccer) clubs to surpass all other competitions in quality, fan appeal and financial riches.

In reality, the ESL concept bombed spectacularly. There are pertinent takeaways here for businesses across the board, not only those in the sport arena. 

Breakaway movement

Leading the push for a breakaway league were Real Madrid, Juventus and Manchester United, closely followed by Barcelona, Atletico Madrid, Inter Milan, AC Milan, Liverpool, Tottenham, Chelsea, Manchester City and Arsenal. 

JPMorgan Chase backed the endeavour with a €3.5 billion (A$4.2 billion) loan to get the project started, secured against future television broadcast and media earnings. 

However, within three days of its unveiling on 18 April 2021, the league was dead in the water. 

Protesting fans rejoiced as the clubs involved beat a hasty retreat. The dominant media narrative has been, “fan power won out in a battle for the soul of the sport, with billionaire club owners eating humble pie”.

Lesson 1: Know your ecosystem 

Professor Simon Chadwick, director of the Centre for Eurasian Sport at the EMLYON Business School, has worked with UEFA, Coca Cola, Formula E and FC Barcelona. 

He says fan protests made for feel-good optics but diverted from far more complex realities at play.

“We’re living in a very dynamic era of digitalisation, globalisation and ideological polarisation. These are significant forces that individuals and small groups of representative interests will never succeed in controlling.” 

Chadwick says one such force is the Russian majority state-owned energy corporation, Gazprom. As a major European football sponsor, Gazprom most likely leveraged its strong connections to football’s governing bodies to play a part in the ESL’s demise, he says. 

Challenging significant players in your business ecosystem can lead to bruising encounters and potentially a red card. If your business plans involve going on the offensive, be aware that you could leave yourself open to counter-attacks.

Lesson 2: Don't upset the referee

In football, clubs must play by the rules of governing bodies like the Union of European Football Associations (UEFA) and the Federation Internationale de Football Association (FIFA). 

The rebel clubs earned the ire of the sport’s governing bodies and stern rebukes from governments, too. Britain’s Prime Minister Boris Johnson referred to the proposed league as a “cartel” and “against the basic principles of competition”. UEFA is still mulling over suitable financial and competition penalties for the clubs involved in the ESL.

FOS Group Australia chief executive Theo Fotopoulos says the proposed league looked like a “coup” instead of an exciting new product. 

“FIFA and UEFA control their product at that level, and they weren’t going to allow someone to come in and compromise that,” says Fotopoulos, a specialist in B2B marketing growth strategies and branding, with a focus on the sports and entertainment industry.

“It’s a textbook case of how not to launch a product. 

“It failed because they did not work with the stakeholders like the domestic leagues or UEFA. They didn’t share their vision or bring others along on the journey. There was no consultation. It looked like they were cheating the domestic leagues and smaller clubs.”

Lesson 3: Understand your market

Global TV rights and merchandising provide substantial revenue streams for clubs. Chadwick says opening up new markets in Asia and globally was a significant factor behind the ESL push. 

“Fandom is a much more fluid and open and diverse concept than it once was. It is increasingly conceived in economic terms,” Chadwick says.

Most businesses need to consider the changing needs of their target consumers. But what happens when the needs of consumers in one market clash with another? 

“In other words, on a fan-by-fan basis, which groups of fans generate most revenues for clubs today? 

“The reality is that the European marketplace is saturated, the market is mature, there’s very little room for growth. There’s no brand switching from one club to another. People essentially are very fixed in how they consume football in Europe and how much they spend on football.”

In wanting to cater to this global audience, the ESL clubs alienated their traditional fan base. Fotopoulos says they badly misread the situation and were not ready for the backlash they received.

“Fans in Europe are very intelligent, and they are passionate about their clubs,” he says. “Without fans, you have no eyeballs on screens and no one going to the stadiums or buying merchandise.”

“The clubs are still in damage control mode. They have a lot of ground to make up with fans and other stakeholders.”

Expanding your business to tap into new markets is a positive strategy, but it could backfire if you run foul of your existing customer base.

Chadwick says the takeaway for businesses is not to take your core market for granted. “Fans saw this as a cash grab by the clubs.” 

Weakened strategic position

Despite strong merits as a concept, the clubs behind the ESL badly mishandled the product’s development and launch. 

By failing to consult key stakeholders, the clubs lost the trust of their core consumers and created tensions between themselves, commercial partners and regulators. 

The concept of the ESL may yet return, but the clubs involved in this push have ceded their strategic strongholds, leaving them in a weaker position to negotiate in the future. 

December/January 2022
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