Apr 22, 2021 - Economy

How anti-greed backlash killed the European Super League

A sign reading "Super greed" hangs on a fence with the chelsea football club logo.

Photo: David Cliff/Anadolu Agency via Getty Images

The 48-hour rise and fall of the European Super League is the perfect encapsulation of how anti-greed sentiment has changed the rules of capitalism.

Why it matters: The highly-complex structures of capitalism are built from the mostly base motivations of individuals chasing money. That's been condemned and celebrated in equal measure — but has also largely been accepted.

  • Not everyone makes most decisions on the basis of financial considerations, and no one makes all their decisions on that basis. But, in aggregate, economies tend to behave as though people generally act that way.
  • When entrepreneurs get the opportunity to become dynastically wealthy by taking their startups public, for instance, it is almost certain they'll end up doing exactly that.

The big picture: The structure of European soccer does not maximize profits. It creates a lot of l0w-interest matches that are hard to monetize (Osasuna vs. Eibar, for instance) and many fewer of the big-name match-ups like Manchester United vs. Barcelona that are avidly watched around the world.

  • The Super League was an attempt to create many more of the real money-spinners, with the profits, naturally, mostly accruing to the owners of the super-elite clubs.
  • That violated the sense of fair play that underpins most sport, as I explained on Tuesday. Even if the Super League was Pareto-optimal, thanks to its "solidarity" payments to lower-ranked clubs, it wasn't fair. And that brazen unfairness led to its almost-immediate death.

What's new: A small group of 12 ultra-elite soccer clubs had access to the finest strategy, polling and public relations advice that money can buy. The deal they unveiled on Sunday night was years in the making. But they and their advisers missed something big — that society as a whole is now willing to forego wealth if it means more equality.

  • Brexit made almost everybody in Britain worse off, for instance — but it also hit the rich London cosmopolitans and bankers the hardest.
  • The Fed is openly embracing the prospect of higher inflation — something that erodes wealth and hits rich savers, while inflating away the debts of the poor.

The bottom line: If Peter Thiel is right that "monopoly is the condition of every successful business" — and a lot of Americans would agree with him on that — then every successful business should start getting worried.

  • When the source of a company's profits is manifestly unfair, those profits are more likely than at any time in decades to be facing existential threats.
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