European Super League Will Bring The Lucrative U.S. Sports Model Overseas – Forbes

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It should not be surprising that at least three of the 12 European soccer teams that have announced plans to forgo UEFA’s promotion-and-relegation Champions League system in favor of joining a European Super League have U.S. ownership interests. The very features of the new Super League that cause controversy in Europe make the structure desirable to investors with U.S. sports experience.

Professional sports became big business in both the United States and Europe upwards of a hundred years ago. In that time, however, the underlying models of U.S. and European sports have diverged significantly. The U.S. pro leagues have evolved as closed-system leagues in which teams within a league maintain league membership irrespective of on-field performance. By contrast, Europe has used an open-system model in which the strongest-performing teams are promoted and the weakest are relegated.

Although the European model may be desirable to fans in a wider range of markets, the U.S. model has substantial business advantages for team owners. For example, the certainty of remaining in the highest level of a given league provides incentives for certain teams to promote and grow their brands. At the same time, the closed-league structure has enabled existing team owners to use the scarcity of teams to pressure municipalities into building their teams publicly funded facilities and has allowed them to sell expansion teams at uniquely expensive prices.

The permanent nature of league membership in U.S. professional leagues has also facilitated agreements among U.S. team owners over a wide range of internal, long-term issues and has facilitated the centralization of a wide range of rights, extending from centralized intellectual property licensing to the centralized sale of data—all despite bona fide underlying questions as to whether these actions comply with antitrust law.

The new European Super League owners with an understanding of the U.S. sports league system—Arsenal owner E. Stanley Kroenke, Liverpool owner Fenway Sports Group and the Glazer family, which owns Manchester United—likely perceive the creation of a new closed-system league as opening the door for them to negotiate in lucrative television markets around the world, including U.S. cities. The league will also likely attempt to adopt centralized trademark licensing and data-use policies similar to those emerging in the NBA and Major League Baseball.

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And it would not be the least bit surprising to see the European Super League attempt to place an expansion team or two in the United States within the next several years. Much as the NFL and the NBA have long had their eyes on expanding into markets beyond the United States, the possibility of selling an expansion soccer team in a closed, premier European league to a market such as New York or Los Angeles would seem uniquely desirable—not only based on the collection of expansion fees but also based on improved access to the U.S. television markets.

Perhaps the best comparison one can conjure to the high-powered European soccer teams seeking to break away from certain UEFA rules to form the Super League is the early-1980s efforts by high-powered college football teams to escape from certain NCAA broadcast restraints by forming the College Football Conference. Ultimately, the College Football Conference dissipated, but the founders were able to secure under antitrust law greater financial freedoms.

As UEFA threatens to punish European soccer clubs that have created the European Super League in a number of ways, including banning league players from participating in the World Cup, one can reasonably expect the new Super League team owners to use antitrust law and any other legal remedies imaginable to try to protect their interest in launching this new league. The financial upside for these owners in adopting the U.S. sports model is so great that these team owners are not likely to turn aside so easily.

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Marc Edelman (Marc@MarcEdelman.com) is a Professor of Law at Baruch College’s Zicklin School of Business, Sports Ethics Director of the Robert Zicklin Center for Corporate Integrity, and the founder of Edelman Law. He is the author of many published articles on sports and antitrust law including “Antitrust Risks of Expanding U.S. Sports Leagues into Europe” and “Monopolizing Sports Data.

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