What’s next following the disbanding of the European Super League

What has taken place in professional football over the past 48 hours (which, to me, has felt like years) is fascinating.  With each of the six Premier League “founding clubs” bailing out of the proposed European Super League (ESL) yesterday evening in quick succession, it appeared to turn into a race between them to disassociate from the ESL the quickest. 

There may be a number of reasons why the English clubs pulled of the ESL so quickly.  Today’s announcement by the ESL indicates that it was due to the pressure placed on them, which, given the scale of vehement opposition to the ESL proposition from fans, footballing governing bodies, government and those involved in football such as managers and players, appears to have considerable merit.  It is clear, however, that the actions of the founding clubs has caused significant and lasting damage to European professional football, both internally and externally with its partners and fans.

In the aftermath of the disbanding of the ESL, thought now moves towards what will be the repercussions for the clubs and individuals involved, as well the impact on European football going forward.  Until the full story of why the venture collapsed so quickly comes out, if it ever does, it is hard to know precisely what the full impact of the attempted breakaway on the future of football’s institutions or the clubs involved in the ESL will be, but look out for developments in the following areas:

Punishment

In the short term, the actions of the founding clubs have brought the sport into disrepute and put them in the firing line for potential disciplinary action from FIFA, UEFA, their respective national associations and domestic leagues.  Such measures could include expulsion from competitions and fines.  The extent to which any sanctions will be imposed is currently far from certain as the relevant governing bodies will need to tread carefully between welcoming the prodigals back into the family and deterring them (and others) from attempting it again. Whilst the case against the breakaway clubs has been presented in forthright and straightforward terms, these things are rarely as clear cut as that and there may well be a degree of self-reflection, in particular on the part of FIFA and UEFA, in relation to ways in which they and their competitions continue to operate, but in a manner which averts future dissidence.

Governance

Boris Johnson’s suggestion of imposing legislative changes to prevent the six English founding clubs from joining the ESL appears to have dissipated for now with the ESL’s collapse.  However, in the light of the founding clubs’ willingness to disregard the rules to which they had freely committed, the interests of every club outside their select group and the wishes of football supporters everywhere in England, discussion of, and calls for, replacing the self-governance structure of professional football with an independent regulator are likely to increase. 

Going forward, questions will be asked, more than ever, about the ways clubs interact with their fans and the importance of solidarity and financial stability throughout the football pyramid, not only to lower league clubs, but down to grass roots.   One consequence of the ESL saga could be a re-drawing of the relationship between clubs and their fans.  Whilst the sheer amount of investment in elite English clubs by financial investors is unlikely to mean ownership of football clubs being moved to the German-style “50+1” model, whereby to compete in a league, a club’s members must hold the majority of voting rights in the club, models involving supporter ownership are likely to be explored. Many would welcome protection of this type against investor activities creating significant dislocation between owners operating clubs for maximised rewards for themselves and the interests of the supporters whose spending and loyalty form the foundation for those rewards, but don’t expect financially driven owners to be amongst them.

Commercial / sponsorship deals

Some club statements which announced the withdrawal from the ESL made references to the decision being reached following communications with, amongst others, “key stakeholders”.  Such “key stakeholders” would almost certainly include commercial partners.  Despite the six English founding clubs acting swiftly to withdraw from the ESL, their actions will have had a detrimental effect on their relationship with a number of commercial partners.  For example, Tribus announced yesterday its withdrawal from its partnership with Liverpool FC as its official global timing partner, citing the club’s decision to join the ESL as its reason.  It would not be a surprise if further withdrawals from commercial partners follow.  

It has also been reported that the actions which have taken place over the last 48 hours have halted negotiations between certain founding clubs and prospective commercial partners.  Going forward, the legacy of the ESL may result in existing and future commercial partners of football clubs, in particular, at elite level, seeking to include more robust provisions in commercial contracts with football clubs, for example, to expressly restrict clubs from joining and participating in unauthorised competitions and/ or competitions outside of the existing system.

Players

There is potential for the involvement of founding clubs in the ESL to raise employment law issues between them and their players, if the clubs are considered to have committed a repudiatory breach of their players’ contracts.  It might also be arguable that there has been a breach by the clubs of the implied obligation, which applies in all employment contracts, to act in trust and confidence. In either case, this could result in players having the ability to exit their contracts.  It is likely that some players may also be influenced in future decisions on their contracts by the apparent willingness of the group of six to expose them to the risk of worldwide bans.

Overall, there are a lot of relationships to be mended as the actions of the six have burnt a lot of trust and goodwill. My hope is that the events of this week, the issues that led to them and the precipice that everyone outside the group of six seemed to be looking into at the start of the week are considered in the round and that genuine attempts are made to reach answers which provide lasting solutions which suit all stakeholders. Given professional football’s long history of self-interest, I expect some will tell me not to hold my breath.

To discuss the above or anything else Sports Law related, please contact Daniel Billson (dbillson@prettys.co.uk), Head of our Sports Law initiative.

Expert
Daniel Billson
Senior Associate