Last year, Quibi was eviscerated by the media for its quick flameout.
After raising $2B, the short-form video startup launched and shut down all within 6 months.
Well, last week, another media-related venture saw an even more spectacular blowup:
- April 18: 12 European football (AKA soccer) clubs announced plans to form a “Super League” backed by a $4.2B loan from JPMorgan Chase.
- April 20: Within 48 hours, half of the league’s founding members pulled out and the plan was canceled.
The teams involved with the Super League plan — primarily from the UK, Spain, and Italy — were some of the world’s most valuable brands (e.g., Manchester United, Real Madrid).
There is an existing European football competition, called the Champions League, but the richest clubs wanted to address 2 issues:
- Qualification: In the current arrangement, a poorly performing team gets demoted to a lower tier and can’t participate in the Champions League. A Super League guarantees a slot for all participating teams, whether or not they are actually playing well.
- Money (of course): Guaranteed participation means guaranteed TV and sponsorship deals. Many rich clubs are unhappy that the money their brands bring in helps to float poorer clubs.
And the money is no small beans
The Super League was projected to bring in ~$5B a year in broadcasting rights vs. only $3B for the 2018-19 Champions League season, per The Economist.
The proposed Super League arrangement is actually similar to how American sports are structured (i.e., teams don’t get demoted for poor performance).
By guaranteeing a spot in the top league, team values benefit. Case in point: 43 of the 50 most valuable sports teams are based in the US.
The rollout for the Super League was disastrous
Star players and team managers weren’t informed about the plan.
Fans of excluded clubs were upset for obvious reasons, but even fans of the Super League participants saw it as a cynical cash grab.
The billionaire owner of Real Madrid maintains that the Super League will proceed in some form. Meanwhile, UK sports minister Oliver Dowden says he will use every tool at his disposal to block the Super League.
“Owners should remember that they are only custodians of their clubs,” Dowden said. “They forget fans at their own perils.”