Unify League explainer: Is this a Champions League threat?

The folks behind the Super League are back.

A22 Sports, the company attempting to organise an alternative competition to the UEFA tournaments (Champions League, Europa League and Conference League) announced on Tuesday that they had petitioned UEFA to recognize their new cross-border tournament, the “Unify League.” This comes nearly a year after the European Court of Justice (ECJ) ruled that UEFA held a dominant position and to comply with competition law, they could not oppose the creation of other cross-border tournaments provided they met certain criteria.

Among them are the stipulations that any such tournament must have a qualification process that’s inclusive and meritocratic, and that complies with the FIFA match calendar.

So that’s it? We now have a rival to the Champions League?

Not exactly, as there are a ton of hoops to jump through first.

Technically speaking, the ECJ judgement found that the UEFA’s regulations gave them too much power to block rival cross-border competitions, so UEFA wrote new ones immediately after the verdict — ones they say comply with the ECJ ruling. Some of those UEFA regulations lay out criteria in terms of open and meritocratic qualification — things the Unify League appears to meet — while others, according to A22, do not comply with the ECJ ruling.

A22 said there are too many to mention, but they did cite one that prohibits any new club competition from “adversely affect the good functioning” of UEFA tournaments. (Which is kind of the point of competition: disrupt your rivals and grow your market share.) But A22 argued that UEFA’s rules, as written, basically force teams that qualify for UEFA competitions to play in them.

We haven’t heard from UEFA yet, but you assume they think their rules are compliant with ECJ rulings. So I think we can expect more arguing between lawyers and possibly letters to the European Court to clarify this, but that’s really just the first hurdle.

What’s the next one?

Well, even if they clear that hurdle and they get their way — which, as A22 wrote, means “clubs are free to decide which tournament they want” — they then need to persuade them it’s in their interest to do so. And that’s not going to be easy, because while clubs are interested in prestige, history, having a say in their competitions and engaging with fans — all that good stuff — let’s face it, money is a prime motivator. It’s not clear how the Unify League’s business model is going to generate more revenue in terms of commercial and media rights. (The UEFA Champions League has certainly cornered the market when it comes to being an event, arguably the Super Bowl of the sport.)

What is A22’s model anyway?

There isn’t too much detail, but presumably they’ll have sponsors just like UEFA does. The big difference, though, is in media rights.

Instead of selling rights to broadcasters and streamers, they’re going to have their own streaming service, the Unify Platform. All games will be shown for free, albeit with advertising. And for those who don’t enjoy commercial breaks, there will be the opportunity to purchase “affordable premium subscriptions” that will offer more technological bells and whistles than standard TV.

Is it possible to make more money this way?

The question raises a bunch of pretty obvious questions. If all you have to do to make more money than they do in the existing competitions is show games for free with commercial breaks, why haven’t existing broadcasters thought of this? And if the secret to more revenue is having “affordable premium subscriptions” — rather than the current expensive ones — why haven’t they done that?

Sure, there’s some merit in questioning the current pricing model — free to air delivers a bigger audience and more exposure for sponsors, which can mean higher ad rates, while lower subscription fees might make it a volume play, where you get more subscribers and end up with more money — but it takes a real leap of faith to think these guys can make it work where everybody else has failed. That said, they’re convinced their format will be more exciting and generate bigger audiences …

How so?

You can watch their video explainer here, but in a nutshell there will be four leagues, with the top two — the Star League and Gold League (don’t ask) — comprising 16 clubs each. Each league is split into two groups of eight, and they play everybody home and away for a total of 14 games. The top four in each group qualify for the quarterfinals, which will also be home and away fixtures, and the semifinals and final will be single-leg affairs.

I make that a total of 246 games — marginally more than the total in the existing “Swiss Model” Champions League (237 games), but, of course, that has 36 clubs vs. the 32 in the combined Star and Gold Leagues, so I guess they can divide their pie in fewer slices and have a slightly bigger pie.

As to whether it’s more exciting, I’m not sure. You’re going to get a lot of the same teams playing each other in a group game, year after year and, I imagine, you’ll get a fair few meaningless games because, with four of eight qualifying, you could get teams knowing whether they’re in or out with three or four games to go, making the final match days rather irrelevant. (Of course, this concept has been seen at tournaments before, and we’re still not sure whether the first-ever Champions League Matchday 8, with all 36 teams playing at the same time, will have high stakes hanging in the balance.)

There’s also the fact that the ECJ ruling forces them to be “merit-based” and “open to all,” as that could boomerang against them.

What do you mean?

Well, the old/aborted European Super League had 12 guaranteed megaclubs in it — 15 in the original proposal, before Bayern Munich, Borussia Dortmund and Paris Saint-Germain said no. Based on A22’s regulations, if the competition had kicked off this season, clubs such as Borussia Dortmund, Liverpool, Aston Villa, Barcelona and Atletico Madrid — all of whom are in the Champions League — would not be guaranteed a place in the competition but would need to battle their way through multiple qualifying rounds for one of the playoff spots.

And guess what? Clubs like sure things and hate uncertainty, especially when it comes to revenues.

But won’t they end up in the next league down?

You mean the “Gold League,” right? Actually, Atletico and Borussia Dortmund wouldn’t even be guaranteed a place in that either; they’d need to get there via the playoffs. But yes, the next league down will presumably generate substantially less revenue than the top league, just as the Europa League makes less money than the Champions League. That’s the rub.

It’s a really tough sell, and they’ll have a difficult time convincing the clubs this is more lucrative. Unless …

Unless what?

Unless there’s somebody out there willing to offer clubs a big, fat downside guarantee, somebody who says, “I’ll guarantee you more than what you’re making now.” And that’s tough because right now, UEFA generate around €4.4 billion ($4.6 billion) from their three competitions. Just over a billion of that goes on administrative costs (€387 million), payments to clubs that don’t qualify (€440 million), subsidies for the Women’s and Youth competitions (€25 million) and in UEFA’s coffers (€230 million) to be redistributed to member associations.

Now, A22 obviously might be able to run a leaner tournament so their administrative costs will be lower, and maybe they won’t want to subsidize the women’s competition. (They say they’ll have one, too, though it remains to be seen how the numbers work out there.) They might not pay as much to clubs who don’t qualify or to member associations, though they say they’ll have some solidarity mechanism. But they’ll still need to get well north of that €4.4 billion figure to make it worthwhile.

And, remember, because they’ll be running the games on their own platform, they’ll also have marketing, technology and production costs that are currently absorbed by broadcasters.

So, yeah, I’d imagine it would take somebody willing to say, “I’ll chuck in €6 billion a year in to cover the downside for the next couple of years to get this thing off the ground and guarantee that you clubs are better off with the Unify League than anywhere else.”

Frankly, that’s a ton of money and, of course, there’s the risk of a nightmare scenario for both UEFA and the Unify League.

What’s the “nightmare scenario” exactly?

Imagine they end up competing directly with each other and A22 convinces some clubs, but not others. (Or, because there’s also a whole hornet’s nest of domestic legislation in various countries that prevents clubs from joining a league like this, and which might or might not be compliant with the ECJ ruling, some clubs simply can’t.) What then?

Let’s say the Unify League has Real Madrid, Manchester City, Bayern and Inter. The Champions League has Barcelona, Liverpool, Borussia Dortmund and Juventus (presumably PSG, too, unless Nasser Al Khelaifi jumps ship). Both competitions are markedly weaker and no, it’s not a linear decline because the success of the Champions League is founded on having the best clubs all in one place. Take half of them away and the interest isn’t halved, it goes down by a lot more than that.

Mutually assured destruction might be an exaggeration, but it certainly would make life a whole heck of a lot tougher for everyone.

So what happens next?

I expect a lot of back and forth between lawyers, and maybe some ECJ clarification, but ultimately this seems like a power move, where A22 want to get UEFA to the table somehow. Except it’s hard to see how A22 have any leverage at all because their business model seems goofy and nobody of note, other than Real Madrid, has gone to bat for them. Unless of course there’s somebody in the shadows with several billions willing to bankroll the whole shebang.