What is the ‘football pyramid’?
The ‘football pyramid’ is a metaphorical visualisation of the structure of European football. Similar to the ‘trickle down’ model of economics, the pyramid is heavily reliant on the success of ‘elite’ or ‘top tier’ clubs that drive revenues for the rest of the football community.
The national federations for football in consultation with the ‘top-flight’ clubs in each national league determine the distribution of funds to the clubs in the lower leagues. The intended idea for this structure to utilise the significant revenues of the commercialised clubs and leagues and re-distribute the resources to the lower divisions. Therefore, the financial responsibility lies with the premier clubs of each domestic league.
An example of such programs to re-invest football profits into the pyramid are ‘Solidarity Payments’. These are made to the clubs in the lower leagues such as the EFL Championship, League One and the National League in order to invest in infrastructure, stadiums upgrades and maintenance, training facilities, and general business functions for the smaller clubs. These payments are applied to the transfer of a player from one club to another as a percentage of the total fee.
However, the majority of grants that flow from the top of the pyramid to the grassroots level are in the form of capital investments are made by the league associations in coordination with the member clubs of that specific division. Thereby, the political games become an inherent foundation of the ‘funding’ process as clubs and governing bodies decide the optimal amount of assistance to provide the smaller clubs.
Who is on top of the pyramid?
The ‘Big Six’ clubs of England dominate the market share, alongside the heavyweights of Bayern Munich, Real Madrid and FC Barcelona. These clubs entice huge sums of broadcasting fees for media conglomerates of the domestic leagues such as the English Premier League and La Liga. The matchday revenues have significantly increased with larger stadium capacities from recent upgrades to hubs like Anfield and the newly built Tottenham Hotspur Stadium. In fact, the revenue in the footballing network in England alone has almost doubled over the last ten years according to some pundits and insiders in the community.
These patriarchal clubs are not alone at the top of the mountain. The governing bodies that provide oversight for transfer market, league rules, qualification prerequisites and football development possess an enormous amount of power. FIFA, UEFA, the FA and the complementary governing bodies from other nations represent the collective interests of fair and meritorious competition.
The governing bodies operate, organise, and run the domestic leagues, knock-out tournaments and European Cups that configure a pyramid of competitive annual seasons. The top teams from each league are promoted to the next division until the point they reach the UEFA Champions League, which represents the pinnacle of football competition in Europe. The existence of a promotion and relegation mechanism ensures the stakes of each season are consistent with the ethos of football as a meritocracy.
However, there is an epidemic of commercialisation within the World Game. The ‘Big Six’ of England have been transformed from a ‘working class’ identity to the corporate business model through financial takeovers and mergers with overseas venture capitalists such as the Fenway Sports Group (FSG), Kroenke Sports & Entertainment, and the Glazer Family ownership of Manchester United. As a result, the livelihood of semi-professional teams, small clubs in the national divisions and grassroots football are dependent on the altruistic authenticity of these stakeholders. By extension, the prosperity of the football community is contingent on the sanctity of the pockets of such wealthy businesspeople.
Hence, it can be viewed the current setup is an oligopoly with privatised elements from overseas sources that represent the power base for the business of football in Europe.
Why is the ‘Super League’ such a fuss?
The proposed ‘European Super League’ is a supposed replacement for the current UEFA Champions League that is run by the independent governing body of the same name. The premier clubs of Europe are dissatisfied with the proportional split of broadcasting, commercial and matchday revenue that is provided by UEFA for the completion of each European football fixture. In their eyes, the domestic leagues should not be the epicentral source of revenue for clubs.
In other words, the lack of consistent marquee matches, ‘cap’ on the revenue streams, and inability to ensure annual qualification into the Champions League create an unsustainable revenue model for the biggest clubs in Europe.
Hence, the idea of the European Super League (ESL). This would allow the biggest clubs in Europe to guarantee their place in the foremost league in Europe. As a result, the Founding Clubs of this league would have full control of the broadcasting split, number of matchdays throughout the season and the intellectual property of the principal prize in European Football. Most importantly, the exclusive ability to monetise their club’s consistent participation in this ‘Mount Olympus’ of football.
However, the owners of such clubs have myopic vision. Underpinning the current ‘football pyramid’ is an ethos of fairness, merit, and open competition. Whilst the language of revenues is unbiased in the sense of power. It is unbelievably biased against the success of smaller clubs in a market filled with cash-driven giants. The unexpected backlash towards the ESL from the fans, national governments and former players was irreconcilable. The ESL in its original proposed form would not be allowed to prosper in an ecosystem of tribalism at its core.
Where does the ‘beautiful game’ go from here?
The ESL proposal is a microcosm for a larger divide within the game. The ideological battle between fans; and the owners, and directors of the Europe’s biggest clubs and governing bodies. Whilst governing bodies such as UEFA may construe that they represent the ideals of fairness and merit. Their sole purpose is to maximise revenues for their competitions in the domain of a highly mercantile footballing landscape.
Likewise, the ‘Big Six’ and the premier clubs of Europe have transformed from entities of the ‘people’ to businesses that operate on balance sheets. The Machiavellian ambition to maximise profits, rather than enjoyment (or entertainment) for fans is a crucial distinction in the contemporary era of football. The unparalleled push for the ESL supports this argument in a nutshell.
This division between the fans and the controlling powers in Europe cannot be sustained for much longer. The increasing debts, costs, and liabilities in the era of Covid are making clubs unsustainable investments for owners. The bloated transfer market, unsustainable wage bills and inability to account for uncertainty are the root causes for the large losses at the biggest clubs in Europe. Something must be done to curb such poor business management.
Sports as a business is volatile. Owners and shareholders must be risk-averse in the operations of football clubs. Therefore, instead of proposing projects that enrich the divide between the fans and owners. The clubs must look toward cost-control measures that aim to stabilise and reduce spending in order to account for variable change in the market. For instance, the implementation of salary caps for clubs, introduction of trading schemes to transform the transfer market into a sustainable marketplace for transactions and transition to fan-owned (50 plus one) financial models for larger clubs.
Otherwise, the commercialisation of football will reach a turning point wherein the fans are only customers. The once mystical nature of football would be dead, and the green machine will be out of gas.
Daniel Dell’Armi.
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