Most of the posts about the newly-announced European Super League have correctly noted that this is “about money” (New York Times), that it’s being driven by “capitalist greed” (Jacobin), et cetera, and there’s been plenty of discussion about how the Super League will accelerate the already-stark inequalities in global football by essentially giving all the Champions League money plus some (according to FT, maybe €4 billion, double what the UCL currently gets) to fifteen clubs instead of letting UEFA spread it around a bit.
All of these articles focus mainly on revenues, and not without reason; the numbers are astoundingly big. I’d argue it’s less about the size of the check, though, than about its consistency, and that even those who immediately recognize the American-style financialization the Super League would bring to European football are (this post from the Double Pivot’s Michael Caley aside) mostly missing the other angle: the Super League is about player wages.
Top-level European soccer is a corrupt and unequal industry, yes, but there’s one sense in which it’s “fairer” than others: wages-to-turnover ratios, which any good Marxist should recognize as how capitalists talk about surplus value.
In most industries, owners are under significant pressure from competitors in the market to keep wages as low as possible, ideally at or below 15-30% of gross revenue — in other words, to let the workers keep 15-30% of the value that they one hundred percent create. Football clubs, whether owned by their members or by a locally-based businessman, are under a different kind of pressure: they want to win games. They want to bring home trophies and avoid being relegated. That means spending as much as the owners can afford on player wages. Top football clubs are not and have never really been money-making entities, and their wages-to-turnover ratios reflect this:
Deloitte, as a financial institution, unsurprisingly end their 2020 review of football finance by advocating for the simplest and most American of solutions to the problem, as they see it, of increasing wages in football: a hard salary cap.
With football currently on pause due to the impact of COVID-19, and losses set to spike due to the financial impact of this disruption, now is the opportune time to create more effective cost control regulations for the future and an overall regulatory framework to facilitate, monitor and enforce a more financially sustainable environment for Football League clubs.
Deloitte Annual Review of Football Finance 2020; “Put a cap on it”
Now, I’m not trying to make some contrarian point about how doing a Leeds is good, actually. Having football clubs be financially sustainable within some kind of overall regulatory framework is something I could get behind. But, regulated by whom, and in whose interest? If what we’re saying is, it’s bad when clubs drop down two divisions in two years and have to make a bunch of normal people redundant to cut costs, yes, I’d agree that’s bad. When Deloitte, JPMorgan, et al talk about “financial sustainability,” though, it’s clear they’re talking about something else entirely.
I alluded to this in my previous post about why the Philadelphia Union aren’t going to spend any money on an attacking midfielder, but it should go without saying that salary caps exist to benefit owners and, if structured favorably enough, guarantee profitability. MLS has a salary cap because the organizers didn’t want the league to go bust too quickly after the 1994 World Cup, which seems like an understandable concern on its face; the demise of the NASL was too recent to ignore.
Today, MLS is as secure as any other professional league, but its single-entity structure (see Fraser v. MLS) and incredibly restrictive and asinine salary cap rules let it maintain a wages-to-turnover ratio of just 28% in 2017, far lower than other American leagues and miles behind the 70% wages-to-turnover ratio UEFA deems to be sustainable for a well-run club. If the MLSPA has negotiators worth their salt, they’d have been hammering this point home at the last round of collective bargaining; not only is the salary cap effectively limiting the quality of the American league in a world without one, but also, MLS players are getting fucked, and unlike their counterparts in Europe, their club owners are starting to turn a profit.
The European Super League statement doesn’t mention a salary cap explicitly, but it does contain a telling reference to a “sustainable financial foundation with all Founding Clubs signing up to a spending framework,” and I would challenge anyone who doesn’t think this means a salary cap to answer: how could such a spending framework leave 70% of club spending untouched? Clubs can’t cut commercial costs, they can’t cut infrastructure, they can’t stop buying equipment, keeping up the stadium, paying the nutritionist and the physios; in business, the easiest thing to cut is labor costs, provided you can still attract and keep your most able workers, and hey, if all the other rich teams in the world sign up for a salary-capped league along with you, getting Messi to lower his wage demands won’t be such an issue, right?
It seems pretty clear that, despite the short-term focus on revenues, broadcast deals, and that big JPMorgan advance, the long game here is going to be (potentially in contravention of EU antitrust regulations?) to tamp down on wage spending as a percentage of revenue. Maybe player wages will stay static for a while and revenue will increase. Maybe the COVID salary cuts were the start of a downturn. At levels below the Super League, player wages will fall as advertisers and broadcasters leave the domestic leagues behind — besides, why should e.g. Leicester City or Olympique Lyon bother paying competitive wages to the James Maddisons or Memphis Depays of the world if they legally can’t make the Champions League?
Ultimately, even the highest-paid players stand to lose from any arrangement where their fifteen bosses get to decide between themselves how much money they can make, and that’s what their employers signed up for this weekend: a closed-shop league with guaranteed revenues and a limit on labor costs. The Super League says This far, but no further not to the rent-seekers in football, but to the players, and opponents of the plan can only hope the players recognize this fact before it’s too late.
file under: tragicomedy 
As a former business owner and entrepreneur, it’s difficult to accept this statement: “let the workers keep 15-30% of the value that they one hundred percent create”. This represents a fundamental misunderstanding of business and capitalism. It discounts the value of the entrepreneur’s idea, the risks taken to produce it, and the financial constructs required to support it.
LikeLike