European soccer club shares jump after Super League announcement

super league president Florentino Perez

Shares of European soccer clubs are moving higher in live and pre-market stock trading action after a group comprised of 12 of the most powerful organizations announced that they will be breaking up with the Union of European Football Association, also known as UEFA, in what has been categorised as a “seismic move” in the discipline.

In a joint statement released on Sunday, the 12 founding clubs including the Real Madrid, Barcelona, Juventus, and Manchester United stated that “they have agreed to form a new competition” named the Super League that will be governed by its founding members.

The clubs cited the instability resulting from the pandemic, which led to the cancellation of matches and tournaments that were scheduled to occur last year – a situation that caused these organizations millions in losses.

Meanwhile, the founders of the Super League emphasised that “the solutions proposed by the regulators do not resolve the fundamental issues” that European clubs are currently facing, prompting the teams to break their ties with the region’s top soccer association along with five more clubs that have also agreed to participate in the competition.

manchester united shares

Manchester United FC (MANU) price chart – 1-day candles view with multiple indicators – Source: TradingView

Shares of European clubs are reacting quite positively to the news, possibly as investors expect that an exclusive competition will produce higher revenues in advertising and tickets while clubs will probably receive a higher cut of the proceeds obtained during the tournament as well.

In the US stock market, shares of the Manchester United (MANU) soccer club are advancing 9% in pre-market action at $17.6 while, in Italy, the stock of the Juventus FC (JUVE) is up 14.2% at EUR 0.883.

How will the competition work?

More details about how the Super League will work were released alongside this statement and they included information on which teams will participate and when will the competition take place.

The 15 founding teams will always be part of the competition while another five teams will be allowed to participate based on their performance during the previous season of their local tournaments.

The matches will take place in the middle of the week, similar to the format followed by UEFA’s Champions League tournament, while the competition will start in August with a first play-off round in which 10 teams will compete against each other after being dividend in two groups.

The three clubs that obtain the highest score will automatically advance to the quarter-finals while the teams that finished fourth and fifth in their respective group will play a two-legged playoff to fight for a place in the next round.

The statement also clarified that the competition will include a version for female clubs as well who will compete in a separate tournament that should take place after the men’s competition is successfully launched.

The Super League’s Finances

From a financial standpoint, the founding clubs stated that solidarity payments, allotments received by participating clubs as compensation for being part of the tournament, are expected to total €10 billion while founding clubs will also be entitled to receive a one-off payment of $200-300 million each to invest in infrastructure and offset the impact that the pandemic had on their bottom line.

Florentino Pérez, the top boss of the popular Spanish football club Real Madrid, will preside over the Super League.

In regards to the launch of this new competition, an spokesperson from the Super League commented: “We’re going to help football at all levels and position it in its rightful place in the world. Football is the only global sport in the world with over 4 billion followers and, as big clubs, our duty is to satisfy the fans’ demands”.

Meanwhile, Joel Glazer, the vice-president of the Super League and co-owner of the Manchester United, stated: “By bringing together the best clubs and players from across the world to play against each other for a whole season, the Super League will represent a new chapter for European football”.

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Alejandro Arrieche

About Alejandro Arrieche PRO INVESTOR

Alejandro is a financial writer with 7 years of experience in financial management and financial analysis. He writes technical content about economics, finance, investments, and real estate and have also assisted financial businesses in building their digital marketing strategy. His favorite topics are value investing and financial analysis. Other publications Alejandro has writtend for include The Modest Wallet, Capital.com, and LearnBonds.

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