Over the last few days the world of football has experienced a level of greed, volatility and rebellion unlike it has ever seen. John Henry’s Fenway Sports Group was directly involved with Liverpool. But what drove him to be a part of such a disastrous, self serving scheme?
The last few days at Liverpool
A series of avarice villains arose last Saturday from the murky depths of the capitalist hellscape both UEFA and the Premier League helped create to propose an elitist, closed shop breakaway league for Europe’s elite.
But as in life, there is a limit to everything. Everyone has their level. A capacity to which, at one point or another, enough will be enough. Football fans hit that limit over the last few days and with Henry, attaching Liverpool’s name to such a proposal he caused such a passionate angry rebellion amongst the Reds’ fanbase.
The level of backlash FSG has faced from fans and media around the world was unlike anything we have ever seen. A collective effort that has led many to believe John Henry and FSG have no place in the club anymore.
On the plain face of it it seems a ludicrous decision. It appears anyone with any ounce of business or moral intelligence would of at least asked those it concerned and saved the embarrassment and the PR disaster that has subsequently followed.
So how does a wealthy billionaire, and an intelligent man get it so wrong and arrive at this decision? What drove him to do this?
Kieran Maguire, a football finance expert, author and lecturer explained some of the financial numbers that may have motivated John Henry to make this awful decision.
UEFA Model & Domestic Instability
“The reason why it’s all come to a head is UEFA were due to announce the format and financial distributions for the next reincarnation of the champions league. The franchise clubs have been trying to extract greater concessions in terms of control and broadcasting rights. It all boils down to money and these clubs wanted a greater slice of the pie,” Maguire explained to Merseysportlive.
Such a “pie” currently sits at eye watering levels.
“The current UEFA model makes around $2.5b dollars a year. If you win the Champions League, it is somewhere in the region of $120-140m. Thats where we are at present.”
Despite the large sums at play, it is the domestic instability in order to access such fees that have driven the ‘top 6’ and John Henry to make such a bold decision.
“In order to get that, you have to be successful domestically. What the owners have said is there’s a way to circumvent the arrangement and qualify for the tournament without having to win football matches.”
Ultimately the European Super League proposal removed any jeopardy of loosing out on the finances as currently in play with UEFA. Essentially, these clubs saw themselves as so prestigious that they didn’t have to earn their European place and subsequently their financial rewards were removed from old-field success.
Broadcasting Rights & In-House Pay Per View
Maguire continued to explain the discrepancy between what UEFA currently offers and what the European Super League could have generated with their so called ‘Netflix’-styled model.
Such a model offered Liverpool and others the chance to generate huge sums via selling rights to wealthy distributers who would have come circling, such as Disney or Amazon.
Crucially, clubs would also have had the capacity to stream some games in-house and hoover the direct profit of those games. Such pay-per-view prices could have only been set at £1-2 pounds per match for around 3 games. But with the fanbase projections and the modelled interest the financial incentives would have been astronomical.
“The so called ‘franchise clubs’ have been trying to extract greater concessions in terms of control and broadcasting rights. If I was John Henry and made my money as a commodity trader and who is Boston Red Sox fan, why would I be bothered about competitive balance in the Premier League when I can make $100m per match selling TV.” Maguire said.
The proposition of making around $100m per game appeared too tantalising for Henry to pass. It appeared easy. In-house streaming cut out the middle man, and when the middle man was required we can leverage higher prices for wealthier clientele.
With the estimated fan bases of the ‘top six’ and Maguire stating Manchester United claim to have 1.1 billion fans worldwide, the numbers and results “don’t even require a spreadsheet” to see the financial gains these clubs would have made.
“The finances say it’s a no brainer, that’s why they went through with it” Maguire concluded.
The finances themselves may have been a ‘no brainer decision’, but what appeared to be a far more damaging and ‘no brain used’ decision from John Henry was not to consult fan bases, club groups and wider stakeholders.
Instead they decided to disregard communication, club heritage, values, tradition and all things that make football what it is in order to implement an Americanised franchise system. Such a system that attacks the core of football and has subsequently fallen flat on its face a mere 48 hours since its conception.
Background image: Creative Commons
_32.jpg){kind=link}