Sports Finance Expert: European Super League Widen Gap Between Clubs, Elite Clubs Are Getting Richer

Illustration - Meeting of two elite European clubs, Real Madrid and Liverpool in the Champions League (Twitter @championsleague)

JAKARTA - Sports finance expert from DBRS Morningstar Michael Goldberg believes the European Super League will harm small clubs because it can reduce the number of viewers and the contract value of the broadcast rights of domestic leagues.

According to Goldberg, the framework of the European Super League will widen the gap between clubs and elite clubs will be richer, easier to attract better players, and easier to win domestic competitions than is currently happening.

"From a financial point of view, the Super League clubs might be better off, but I think they will shrink the product they present when they appear in the domestic league," Goldberg said.

"Then the clubs that are not involved in the Super League will be increasingly at a disadvantage than what is happening now," he added.

On Sunday 12 European clubs simultaneously announced the launch of a midweek competition against the European Super League, which has been the subject of criticism from football authorities to politicians, who have called it a perpetuation of the strength and wealth of a handful of elite clubs.

Goldberg predicts the value of domestic broadcast rights and sponsorship may not be disrupted instantaneously, but it is regularly eroding and widening the gap while fans "don't want to watch the 5-0 result every week."

DBRS Morningstar analyzes the probability of each club meeting its debt obligations based on the magnitude and volatility of their receipts, revenues, and cash flows.

"Super League clubs, I thought the size would go up and the volatility decreased, but those who didn't participate experienced the opposite," Goldberg said.

"What you find then is a stark difference in credit ratings, balance sheets, and how these clubs can be capitalized."

"So, maybe there will be an increase in income, in line with the increase in debt for Super League teams, while the smaller clubs have increased their debt to get through the crisis due to COVID-19 or this period of financial tension and their credit rating will be eroded because of it," he concluded.