The 12 football clubs that have signed up to a European Super League breakaway competition have each been promised a €200m-€300m “welcome bonus” by JP Morgan Chase, the US investment bank financing the controversial project.
The Wall Street giant said on Monday it has committed €3.25bn to getting the new league off the ground and it would be shared among the clubs when the new competition begins.
The founding clubs of the new league are Milan, Arsenal, Atlético Madrid, Chelsea, Barcelona, Internazionale, Juventus, Liverpool, Manchester City, Manchester United, Real Madrid and Tottenham Hotspur. Three more permanent members are expected to be announced in the next few weeks. Bayern Munich, Borussia Dortmund and Paris Saint-Germain are all said to have been approached.
A further five teams will join the competition via a qualifying tournament, according to the Financial Times.
The funding provided by JP Morgan is secured against expected multibillions in TV broadcasting rights. A spokesman for JPMorgan declined to comment on the deal beyond stating: “I can confirm that we are financing the deal but have no further comment at the moment.”
The plans have been condemned by world leaders, the Premier League, football stars and legions of fans.
Boris Johnson said the plans would be “very damaging for football”. The former Manchester United and England defender Gary Neville said the creation of the new league revealed the “pure greed” of billionaire owners of English clubs.
Manchester United’s billionaire co-chairman Joel Glazer said the new league would open up a new chapter for the biggest football clubs.
“By bringing together the world’s greatest clubs and players to play each other throughout the season, the super league will open a new chapter for European football, ensuring world-class competition and facilities, and increased financial support for the wider football pyramid,” he said.
Glazer will become a vice-chairman of the new league. Manchester United’s executive vice-chairman, Ed Woodward, was a JP Morgan banker before taking the top job at the club. In his role as JP Morgan mergers and acquisitions banker, Woodward advised the Glazer family on their 2005 takeover of the club.
Manchester United is saddled with net debts of £455.5m, according to its latest accounts, and increased borrowing by £60m during the coronavirus pandemic as playing in a closed Old Trafford cost the club about £6m a game.
Andrea Agnelli, the chairman of Juventus and a vice-chair of the new super league, said: “We have come together at this critical moment, enabling European competition to be transformed, putting the game we love on a sustainable footing for the long-term future.”
The billionaire Agnelli family own the majority of Juventus, as well as large stakes in Ferrari and the Economist newspaper, via Exor, a holding company in the Netherlands.
Florentino Pérez, the president of Real Madrid and the chairman of the new super league, said: “We will help football at every level and take it to its rightful place in the world. Football is the only global sport in the world with more than 4 billion fans and our responsibility as big clubs is to respond to their desires.”
The former Football Association and Manchester City chairman David Bernstein said he was ashamed of his old club, and the creation of the new league showed the desperation of club owners who had built up huge debts.
“There are two things in play here, one is greed and the other is desperation because some of these clubs … have incurred enormous debts, certainly Barcelona and Real Madrid and at least one of the English clubs who shall remain nameless are approaching £1bn of debt,” he told BBC Radio 4’s Today programme. “It’s a lifeline that is going to end, if it happens at all, very badly.”
The new league is likely to resemble US sports leagues, where there is no promotion or relegation and owners can predict steady yearly profits. Many of the recent purchasers of big European football clubs already owned sports teams in the US. The Glazer family bought the NFL team the Tampa Bay Buccaneers in 1995 for $192m; it is estimated to be worth $1.2bn today.
Sign up to the daily Business Today email
Gavin Patterson, a former boss of BT, has reportedly held discussions about possibly becoming chief executive of the European Super League.
JP Morgan was also the financial backer of the earlier proposals for a new Super League competition for elite European clubs. The bank’s chief executive, Jamie Dimon, has recently called on politicians to do more to control yawing inequality.
Dimon, who was paid $31.5m last year, said the US needs a “Marshall plan”, referring to the initiative to help western Europe rebuild after the second world war. Such a plan would mean more spending on infrastructure, education, affordable childcare and job training, and “may very well mean higher taxes for the wealthy”.
Dimon said in his annual letter to shareholders: “Should that happen, the wealthy should keep in mind that if tax monies improve our society and our economy, those same individuals will be, in effect, among the main beneficiaries.”
Source: The Guardian