Real Madrid have spelled out their commitment to a restructuring of the Champions League in which the clubs not Uefa are in control – essentially a European Super League 2.0.
The Madrid chief executive, José Ángel Sánchez, who rarely speaks in public, has taken part in a Harvard Business School (HBS) case study – seen by the Guardian – in which he explains why he feels change is essential. In it, he likens Uefa to the musicians on the Titanic, playing on despite impending doom.
The study was prepared by the HBS professor Anita Elberse, the class of 2024 graduate Juan Pasquín and the research associate Iñigo Pasquin. It delves deeply into Madrid’s business plan, looking at why the club have moved away from the transfer policy of the Galácticos era, prioritising the signing of younger players who can be developed into superstars.
It is to better manage costs in a market where they are no longer the dominant financial force. There is a spotlight on the €1bn Bernabéu stadium renovation project, which began in 2019, and how it stands to drive increased revenues.
What stands out is Madrid’s desire for the new-look European league which, according to Anas Laghrari, an adviser to the club’s president, Florentino Pérez, would feature “the highest-quality football all year round”.
Madrid have doubled down on their position in the HBS study, also offering an insight into their mindset. At one point, Sánchez compares the 15-times European champions to Asterix’s fictitious village, holding out against the Roman invaders.
“If we want to preserve football’s leadership position in the sport and entertainment industry, we have to change the system,” Sanchez said. “The current governing bodies are like the musicians on the Titanic, who kept playing even when the ship went under. The system as we know it is over – we need to organise things differently in the industry. That was the rationale behind the Super League and it is even more pressing now.”
Sánchez, Pérez’s right-hand man, said Madrid would “keep working on the execution of the idea”. It is unclear what that involves or whether they have the support of other leading clubs. Ten of the original 12 Super League rebels from 2021 have made apologies, paid fines and re-embraced the status quo, with only Madrid and Barcelona clinging to the idea that the concept could be revived.
Sánchez talked about what most concerned him and Madrid, starting with the economic strength of the Premier League, where the “media rights income is so high that it is making it difficult for us in Spain and for other continental European clubs to compete” – chiefly in the transfer market. He said the gap was “likely to only increase”.
There was also the “growing sense of unfair competition” resulting from sovereign wealth funds owning clubs, and governing bodies “failing to act to halt those clubs’ increased dominance”. Sánchez said: “They [the governing bodies] are not able or not willing to guarantee an honest competition between clubs.” In his crosshairs were Manchester City and Paris Saint-Germain, controlled respectively by powerful people in Abu Dhabi and Qatar.
Madrid were the highest-grossing European club in 2022-23, in Deloitte’s money league, with a turnover of €831m. Thanks to their Champions League success of last season, they have become the first to exceed €1bn in annual revenue.
“We feel like Asterix’s village in a world dominated by the Romans,” Sánchez said. “We, too, feel like we have our magic potion – we are a very special club, with a strong tradition – but we keep having to fight these battles to defend ourselves. It is one thing to fight private companies but something else to fight countries that own clubs and have infinite pockets of money.”
Sánchez insisted he was worried about “the product itself”, that Madrid wanted to act for the wider good of the game. There will be those who interpret that as taking in the wider good of his club.
“We are now competing with lots of other ways in which people can spend their time and have to make sure the product we provide fans is the best it can be,” Sánchez said. “But football as an industry – and we include clubs such as ours – is generally cautious about making any change.
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“It’s very difficult to seriously consider questions about the product we provide to our fans, let alone take action. Is there anything we should change about the format? About the length? About who competes with whom? About when matches take place – during the weekend or on weekdays? I am optimistic about the future of football – people love it – but certain structural things have to be changed.”
For Madrid, Uefa is the enemy, a cartel overlord. Why should the governing body have such influence over media rights? According to Sánchez, the clubs should take control of them. It would remove certain shackles, reward enterprise and create fairer dynamics.
“We are advocates for a model in which clubs can determine their own destiny, as they do in pretty much every sport or even in football at the domestic level – a model in which they have control over how competitions are managed and in which we can create one-to-one relationships with our fans,” Sánchez said.
“Take a Real Madrid fan living in Osaka, Japan. Now, that fan watches our Champions League games through a Japanese broadcaster, who pays Uefa and Uefa pays us. If we ran the European competition, we could disintermediate those parties and create a more direct relationship with the fan. And because we have so many fans worldwide, we could significantly grow our broadcasting revenues as well as sell more sponsorships and merchandising.”
It is interesting that Laghrari, a serious behind-the-scenes power at Madrid, is quoted in the study. As with Sánchez, it is unusual to hear from him in public.
“Why would Uefa be governing a competition when the clubs bear all the entrepreneurial risks?” Laghrari said. “It is the clubs that invest in players, youth academies, stadiums and other assets. Uefa is trying to hold on to their position but they are only stifling innovation. Clubs like Real Madrid should not have to fear threats of sanctions simply for having ideas and conversations about what the future might look like.
“If you consider Real Madrid’s media rights income now, the club receives less than one euro per fan per year. There is a huge potential for growth. How do you unlock that potential? By Real Madrid leading its peers into a venture that creates an owned-and-operated media platform for fans around the globe with the highest-quality football all year round.”
Source: theguardian.com
