Clubs will pay a price for backing out of Super League, insist lawyers

Clubs will pay a price for backing out of Super League, insist lawyers

EXCLUSIVE: The English ‘Big Six’ have already lost £8m each after their European Super League was killed off in days… and they could still face huge financial punishments for breaking their contracts

  • Super League clubs bought equity stakes for £8 million to support development
  • The rebel clubs had signed deals with penalty clauses if they left early
  • Man United, Liverpool, Man City, Spurs, Arsenal and Chelsea have withdrawn
  • And specialist sports lawyers expect organisers to make the contrite clubs pay
  • Meanwhile ECA board member Wanja Greuel admits he has ‘mixed feelings’ 

The Big Six rebels have lost tens of millions between them in their disastrous attempts to set up a European Super League, which ended in a humiliating defeat, Sportsmail can reveal 

The 12 Founding Clubs who announced the venture on Sunday evening purchased equity stakes of around £8million each in the Super League, which its creators ultimately hoped to turn into global competition that would dominate club football. 

It emerged yesterday that the English clubs could also face financial penalties for pulling out as the ESL contract signed last week contained clauses committing them for at least three years. 

Lawyers say the contracts will have been structured to encourage clubs to stick with the controversial project in the face of expected protest by imposing large penalties.  

Arsenal fans hung banners outside the Emirates Stadium in protest at the proposals

But in the end the derision was so extreme that the English clubs – Manchester United, Manchester City, Liverpool, Chelsea, Tottenham Hotspur, and Arsenal – were forced to withdraw last night, apologising profusely to fans as they left the stage.

And the Super League has been left to lick its wounds and ‘reconsider the most appropriate steps to reshape the project’.

However, the ambitions for the derided project were far more extensive than many realised.

For Real Madrid president Florentino Perez and Manchester United’s outgoing chairman Ed Woodward the ESL was just the first step in their vision for creating a global franchise.

Premier League’s Big Six clubs pulled out of the European Super League under huge pressure

There was the the prospect of setting up similar invitation-only Super Leagues in South America, Asia and Africa at some point in the future under consideration if the initial European tournament went well. 

There were even discussions about potentially creating a World Championship involving winners of the various continental leagues in a direct challenge to FIFA’s Club World Cup, which was founded 21 years ago and the world governing body are planning to expand.

The equity stakes purchased by the 12 rebel clubs were being used to create the new competition’s infrastructure and fund crucial roles such as negotiating with potential broadcasters, commercial partners and pay legal fees.

It is unclear how much of the money has been spent, and if any of it will be returned now the ESL has collapsed less than three days after its launch, which was confirmed this morning when Juventus chairman Andrea Agnelli said that the competition could no longer proceed without the six Premier League clubs.

Chelsea fans and those of other clubs protested fiercely at the prospect of a Super League

Asked whether the project could still happen after the exits, Agnelli told Reuters: ‘To be frank and honest no, evidently that is not the case. I remain convinced of the beauty of that project. But admittedly I don’t think that that project is now still up and running.’

The Premier League’s Big Six could also be forced to pay compensation to the six other European Founding Clubs for breaking a clause in the ESL’s 23-year contract which stated they could not leave for its first three years.  

‘I think the clubs taking part in the Super League have put themselves in a position where it is not easy to get out or step back,’ said ark Orth, of MEOlaw based in Munich.

‘The Super League knew there would be a lot of pressure on clubs to get out so I assume there is also a strong obligation on the clubs not to get out of it.’

Aleksander Ceferin continued his war path against the European Super League on Tuesday

A previous attempt to launch a European Super League in 1998, called Project Gandalf, foundered in part on the fact that the participating clubs were not guaranteed an income for the project and so stuck with the security of UEFA competition.

In this case, it appears the contracts guaranteed funding of up to £310 million for the 15 founding members of the closed-shop competition. These bank guarantees delivered the commitment of 12 of Europe’s biggest clubs, but at a price.

‘Project Gandalf did not come into effect because there were no bank guarantees,’ Orth added. ‘I think they have changed it this time.

The Glazer family (Avram – left, and Joel – right) who own Man United are also under-fire

‘It was obvious there would be a lot of pressure on the clubs and they have committed themselves.’

Yesterday, it initially appeared the Super League was in the ascendancy after a court in Madrid made a preliminary ruling that UEFA and football federations could not impose sanctions on clubs and players, who participated in the breakaway competition.

Sportsmail reported on Monday that competition law and legal precedents gave the rebels a strong legal case with UEFA braced to fight it out in the courts.

And we now understand that the European governing body also filed court papers in Spain insisting it did have the right to sanction participants in the Super League, although a ruling is yet to be made.

However, the weight of public and political opinion became so great that the English clubs concluded that taking an economic hit on the Super League contract was a price worth paying.

It was a belated attempt to limit the already considerable reputational damage.

But that may not be an easy decision for others like Barcelona and Real Madrid, who already face a desperate financial situation.

Barcelona’s finances were laid bare in January with the club in serious debt and reportedly at real risk of going bankrupt.

Financial figures released showed the La Liga giant’s debt at £1.1billion with £648million of that due in the short term while £236million has to be paid to banks by June 30.

Liverpool fans protest outside Anfield on Monday amid the European Super League plans

And the total debt at Real Madrid is reported to be £780 million, with a net debt of £305 million.

‘With the financial situation of the Spansih clubs, they cannot pay it back so easily,’ added Orth, who is a specialist in sports and competition law.

‘The clubs are in a difficult position. They cannot simply say we don’t want a Super League and go back to UEFA. The cannot easily get out of it, they will have to pay.’

It’s not much better at Inter Milan, which according to reports in Asia and Italy have now said goodbye to the ill-fated European venture following protests across Europe. 

Wanja Greuel, chief executive of BSC Young Boys (pictured) has ‘mixed feelings’ about the return of the rebel clubs

The Chinese owners of the club rushed to raise almost £150 million in emergency cash in February, after finances deteriorated due to the pandemic and lavish on players.

No wonder Europe’s powerhouse clubs wanted to earn some extra revenue through a Super League, even if it was ultimately at the expense of others.

The upfront money in the scheme included a £3.03 billion investment fund created to support the Super League was secured via JP Morgan.

‘This is being driven by JP Morgan,’ said Stephen Taylor, head of sports law at JMW, a legal practice that advises footballers and clubs.

‘They will have been taking legal advice at the highest level and drawing up contracts with clubs on the basis that they are expecting the clubs to commit to this.’

Taylor said the clubs would have limited options to back out of the contracts.

Arsenal owner Stan Kroenke has also got the Gunners on the top table despite their big slump

Extricating themselves from the Super League contracts is only part of the problem now facing the clubs.

They also have to rebuild their relationships with UEFA, the FA and other European clubs and that will not be easy.

‘I have mixed feelings,’ admitted Wanja Greuel, European Club Association board member and chief executive of BSC Young Boys ins Switzerland.

‘On the one hand I am happy because I think this would have been the biggest disaster for European football.

‘But I am confused. Did they really think there would be less protest. In my opinion, that was to be expected.

Liverpool owner John W Henry has come in for immense criticism for his role in the plans

‘It will be tricky to reintegrate them,’ added Greuel, who was involved in ECA board meetings that agreed to UEFA Champions League plans, while seven of its members were secretly plotting to leave.

”We cannot ban those clubs, but we have to talk to them about how they repay the football community for what they have done.’

Greuel hopes that the trauma of the Super League project will allow a fresh start.

‘The whole football family has to to find a way to get control of the cost structure.

‘Players perform great and deserve great salaries because they are unique but I am not sure they have to earn £50 million a year.

‘With less pressure on the costs, we would not be so desperate for more money.’

Uefa president Aleksander Ceferin welcomed the reversal, adding: ‘They are back in the fold now and I know they have a lot to offer not just to our competitions but to the whole of the European game.

‘The important thing now is that we move on, rebuild the unity that the game enjoyed before this and move forward together.’

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