We had a great deal of interesting news this week but the main one must have been the decision by 12 football clubs to set up a European Super League, a project that got shipwrecked even before the ship had set sail. It made the front pages of leading European newspapers and the top item of most news programmes. The reason why I write about it this week is because the whole issue is an economic one and has little to do with sport and the values of sport as we have conceived them. There are lessons to be learnt by other economic activities.
The whole issue is an economic one because the 12 clubs wanted to find ways and means of increasing their revenues to address the indebtedness which they have got themselves into in the last years and to sustain their current operational model.
They thought that such a Super League would have captured the imagination of fans and consequently earned even more revenues from television rights. They would have probably sold those rights to some investment fund and would have got an immediate cash injection to pay back current debts, in the hope of making their operational model sustainable in the future.
The whole project fell through before it was even born because the clubs made three fundamental mistakes. First, they ignored their stakeholders. Second, their senior officials had an evident conflict of interest which angered their competitors and their regulators. Third, they sought to address the symptoms of the problem and not the cause. These are three mistakes which no businessperson in one’s right senses should make. What are the lessons to be learnt by other economic sectors? The most important one is the sustainability of a business model. It is easy to make money while the going is good – to use the infamous proverb, “make hay while the sun shines”. It is also easy to extend oneself beyond what is reasonable as the future always looks rosier than the present.
The failed attempt to create a European Super League should serve us as an example of how not to address business issues
However, the strength of any business model is not whether one makes money when the going is good, but whether it can survive and sustain itself when the going gets tough. These major football clubs are showing that their model is not sustainable at all.
Another lesson is the way they have dealt with conflict of interest. They were taking part in discussions with other clubs and associations, while planning this new competition which goes against the interests of the other clubs and associations. This caused anger and accusations of unethical behaviour.
This brings me to the fact that they ignored their stakeholders, most notably their own supporters. I believe that it was the reaction of their own supporters against this project that finally convinced them to abort the whole idea. When announcing that they were taking a step back from the Super League project, most of the 12 clubs did say that something needs to be done to address the problems that football clubs are facing today, but this sounded more like attempting a dignified retreat.
The final lesson is that when there is an issue, a business organisation should address the cause of the issue and not the symptoms or its effects. This is basic training in problem solving provided to supervisors and not chief executives.
Are there lessons for Malta? Yes, there are. How sustainable is our economic model? Are we willing to address conflicts of interest? Do we really listen to what our stakeholders, especially the customers, are saying? Do we try to plaster over issues, or do we address the root causes of problems? Do we sacrifice values for short-term economic gain?
The failed attempt to create a European Super League should serve us as an example of how not to address business issues.
By the way, if anyone is wondering which team I support, it is Inter!!!