Wall Street Capitalism and the Soul of European Football – JP Morgan Chase and Jamie Dimon have scored a Super League Own Goal

Never has football seen a clash like this. The proposed European Super League pits a US model of a tournament played among members of a largely closed group against the more open style of footballing competitions in the “old continent”. Cynics might call it a brass-knuckle attempt by a powerful new quasi-cartel to supplant a rather older one, in the shape of Uefa, its Champions League and national associations. Who wins will have a profound impact on the future of the European game.

The struggle poses questions about football’s nature: is it a business like any other, or something more? With billions of euros of television rights and sponsorship money at stake and many clubs owned by investors demanding a return, top-level football clearly is big business. The recent clash reflects its evolution from community-based sport into an arm of the global entertainment industry. Yet TV revenues generated by the big clubs help to support an extensive ecosystem of more miner teams.

As a business, football also relies for its audience on passion, suspense and unpredictability. True, a handful of clubs are now dominant in most countries. But the “pyramid” structure of the game in Europe allows even the smallest teams to break through to the top ranks – including European competitions – or win trophies through giant – killing exploits. Outside the top few, other clubs rise and fall with time.

While the Super League is proposed to have five rotating places, it will have 15 permanent members. That will make it look more like US leagues where there is no relegation or promotion and, as a result, revenues are far more predictable – leading to higher valuations. It is no coincidence that four founding clubs – Manchester United, Arsenal and Liverpool, plus Italy’s AC Milan – have American owners, and that the US bank JP Morgan Chase is providing the financing to be able to promote its own cryptocurrency (JP Coin) for purchases like tickets, merchandise and streaming the games. The league may also have US – style cost – control elements such as salary caps and spending limits.

Its backers insist there is no shortage of excitement in American sport. The potential to pull in large global TV audiences and tap new markets, they add, including through partnerships with the likes of Amazon and Facebook, would create a more financially stable tip of the European pyramid and increase fund flows to the base.

Yet having only five places up for grabs each year would limit the intrigues over who will “qualify for Europe”. Even if national divisions, such as the Premier League in the UK, relent on their threat to bar ESL (European Super League) participants, there is a real likelihood they will become less competitive as the top teams focus on midweek European fixtures. That would erode the attraction for the hundreds of thousands of fans who turn out to weekend games each week, but could never afford to travel repeatedly to European matches.

Perhaps JP Morgan Chase is just too rich and powerful to care. It was certainly caught unawares. Presumably, executives in Europe failed to warn the bosses back in New York that a multibillion-dollar plan to change the face of European football for the benefit of a dozen or so super-rich club owners risked igniting a political firestorm.

Yet even if football is more than pure business, it is not an area in which governments should intervene, despite the spluttering of leaders from Boris Johnson of the UK to France’s Emmanuel Macron. The battle may be brutal, and poses a threat to this year’s European Championship for national teams. But the future of top-flight football should be decided not by politicians but by players, clubs, managers, if necessary the courts, and above all the fans.

As the financial backer for the ESL, JP Morgan Chase might now draw some comfort from the fact that the idea collapsed so quickly under the weight of protest. It is not often that Boris Johnson and Emmanuel Macron agree on anything, but the view from Downing Street and the Elysee was the same. Here were a bunch of Wall Street globalists seeking to reorganize Europe’s most popular game without the slightest regard for the views or interests of its managers, players and supporters. At least JP Morgan Chase can now set about limiting the reputational damage.

But we have to wonder what the bank was thinking when it agreed to underwrite the new competition to the tune of 3.25 billion euro, with each of the members promised an initial payment of between 200 million and 300 million euro.

Twelve clubs had already signed up.

No one at JP Morgan Chase apparently had read the letter to shareholders written by its chair and chief executive Jamie Dimon in the bank’s latest annual report. Published only last month, the letter showcased Dimon’s well-publicized efforts to position the bank as a leader in the brave new world of socially responsible and sustainable capitalism. He placed particular emphasis on the alignment of the bank’s value with those of the “communities” in which it operates across the globe: “As you know, we have long championed the essential role of banking in a community – its potential for bringing people together, for enabling companies and individuals to reach for their dreams.”

Tell that to the players and supporters of such hallowed institutions as Manchester United and Liverpool, and to the communities in which these great teams grew up. The plan to supplant the present Champions League with a “closed” competition between Europe’s richest clubs promised to tear up the game’s traditions, destroy its competitive spirit and mock the towns and cities in which the teams are rooted.

Never mind “communities”. Here was an arrangement that illustrated in our opinion everything that is wrong with anything – goes globalization. The new league was designed with a single purpose: to extract for wealthy owners a still bigger share of the income from broadcasting rights and to ensure that their returns were stable by eliminating the risk of any club falling out of the competition and by providing JP Morgan with an opportunity to introduce its own cryptocurrency. The flip side was that it would have extinguished the game’s competitive impulse. This is what makes football exciting – open tournaments that reward success on the pitch with a shot at reaching the top and, along the way, take down the mighty when their performances fade. In the new scheme of things local fans – those “communities” again – would be relegated to second place behind lucrative digital subscribers thousands of miles away. The “left-behinds”, the fans might have been called.

The pandemic, which has wrecked the finances of many sports, played its part. And four of the twelve clubs who had signed up have American owners. Perhaps they assumed that a closed system that seems to work for baseball and American football could be transplanted on the other side of the Atlantic. But then that is one of globalization’s conceits. You should be able to sell the same thing everywhere. We still hear people profess themselves perplexed by the rise of populism. There in our opinion really is no mystery. The insurrections against elites have been rooted in a perception – often a fair one – that the system was rigged. The rich pocketed the gains of globalization and of technological advance while those lower down the scale were obliged to take on the economic insecurities. Unfettered capitalism trampled on tradition and disregarded the interests of local communities.

The Super League club owners proposed to apply this formula to European football. In the description of Aleksander Ceferin, the president of the European game’s governing body, Uefa, the plan was to create “a closed shop run by a greedy, select few”. Just about everyone with a role or a passing interest in what is called the beautiful game agreed with him.

Dimon may now like to ask himself again – after calling Bitcoin a fraud two years ago and that its value will go down to zero – just how JP Morgan Chase found itself again on the wrong side of this argument.