European Super League’s Potential €2.5bn Own Goal
The European Super League (ESL) is set to be a €2.5bn own goal according to analysis by Brand Finance has been tracking the financial value of football brands for 15 years.
With the ESL potentially being the biggest shakeup to the game seen Brand Finance calculates that the its founding clubs are likely to lose a combined brand value of €2.5bn, but that number could potentially be as high as €4.3bn.
The ESL was announced late on Sunday (18th Apr) with 12 clubs set to become founding members of what will essentially become a closed competition for 15 clubs and 5 ‘invited’ teams. The ESL is being financed by Investment banking company, JP Morgan who is backing the plans with a $5bn package.
However, the plans have been met with widespread derision. Speaking of the potential financial impact on the founding clubs, Richard Haigh, Managing Director of Brand Finance, commented: “For the ESL ‘Founding Clubs’ the prize seems obvious – more money – but this ignores the huge risk that fans won’t follow and neither will the money.
“There is outrage in the home markets from both fans and leagues alike, but it is not clear yet what the repercussions will be. Will fans vote with their feet and leave the clubs many have supported their entire lives? Will the leagues impose fines, or point deductions leading to relegation and further financial loss?”
In the most likely scenario, Brand Finance estimates the annual loss for the Founding Clubs will be €1.1bn in revenue a year and the brands will all suffer significant reputational damage, leading to a drop in brand value of €2.5bn.
This loss is a combination of lower broadcasting, commercial, and matchday revenue. It assumes that the UEFA will not allow the teams to compete in Champions League and the national leagues also remove the teams from their rosters.
The analysis indicates that not only would the move inflict financial damage on the Founding Clubs themselves, but also on the other clubs in their leagues, which may lose up to 25% of their brand value.
Hugo Hensley, Head of Sports Services at Brand Finance, added: “In our view the result will be damaging for the clubs involved. The sentiment of fans online is overwhelmingly negative, with negative posts outweighing positive ones 3 to 1.
“Negative sentiment like this will inevitably lead to lower matchday spend and commercial revenue in the clubs’ home nations, which is still the lion’s share of any European club’s income.”