How financial situation in Real Madrid and Barcelona accelerated ‘European Super League’ formation

Florentino Perez and Josep Bartomeu-Barcelona-Real Madrid

The European Super League was announced last night but the idea has been around for over two decades now.

A breakaway tournament for the continent’s richest clubs to form their own competition was proposed by an Italian organisation, Media Partners, back in 1998.

However, the idea was shelved because of the lack of support from clubs around the world.

Instead, the clubs continued to focus on the UEFA Champions League and necessary tweaks were made to the competition every now and then.

With time Real Madrid president Florentino Perez became fascinated with the whole idea of the European Super League and started to pressurise UEFA into giving in to his demands or the clubs would go ahead with the breakaway tournament.

Former Barcelona president Sandro Rosell also applied pressure on UEFA publicly demanding for more revenue, governance, transparency and insurance.

This was followed by the backing of Josep Maria Bartomeu who confirmed recently that the board of directors at the Catalan club have approved the requirements to participate in a future European Super League project.

Coronavirus pandemic and financial turmoil

But the tipping point came when the Coronavirus pandemic started affecting the football finances. Football behemoth like Real Madrid and Barcelona are hit hard. They incurred heavy losses because of the pandemic and the clubs have been forced to act with regards to their survival. They found it hard to continue with their workforce management and infrastructure development plans, despite few rounds of salary negotiations and subsequent reductions.

Both the giants were forced to continue with players in their playing or starting eleven, who in normal situation would not be able to continue with these clubs.

According to reports, the participating teams are set to be offered around €350 million each to join the European Super League and they could earn as much as € 230 million a season for just taking part in the competition.

The earnings involved in the European Super League is far greater compared to the Champions League and it is no wonder that these clubs are prepared to walk away from the Champions League in favour of financial security.

Real Madrid are currently undertaking a €600 million renovation of Santiago Bernabeu and they are having to deal with the loss of ticketing sponsorship and match their revenue which is cost them a total of € 300 million recently.

Furthermore, Real Madrid recently took out a loan of € 205 million under the Spanish government scheme to balance their books over the next five years.

Barcelona were reportedly on verge of bankruptcy and announced debts of around € 1.2 billion recently of which € 730 million is due to be repaid in the short term.

Superstars like Lionel Messi are unlikely to accept a pay cut when it comes to signing a new deal and it is no wonder that the Spanish club is under pressure to look for more income. Ironically, world’s two most powerful clubs were not in position to secure Erling Haaland transfer.

Atletico Madrid are in a similar situation as well.

In a statement on their official website, they claim that the European Super League will be built with financial sustainability criteria and the founding members will collectively receive a major one-time payment when they commit to the project.

It is evident that the clubs are struggling with financial issues right now and that has been a major inspiration behind their decision to join up with the European Super League.

Spain's sports minister Rodríguez Uribes on Super League "Best to listen to everyone before forming an opinion. I've already spoken to Liga and RFEF presidents, later I've a virtual meeting with UEFA president. I'll see Florentino Perez soon, will speak with Barca, Atletico..."
Florentino Perez in the past week: 
- Re-elected as president of Real Madrid in an unopposed election for his fifth consecutive term. 
- Established as the first Chairman of the European Super League. #rmalive