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IS IT BIRD? IS IT A PLANE CRASH? NO, IT’S SUPER LEAGUE

The spectacular collapse of the two-day-old Super League isn’t a story about European soccer — I wouldn’t subject you to that. Instead, it’s a peek into the global business of sport, and a lesson in the rise of stakeholder capitalism over shareholder capitalism.

All six U.K. Premier League soccer teams involved in the European Super League withdrew from the competition Tuesday, and today only Real Madrid and Barcelona remain. The rapid collapse delighted fans and political leaders including Boris Johnson and Emmanuel Macron. Even the grieving future King, William, Duke of Cambridge stepped in to slam the breakaway league.

It’s the consultation, stupid

The league was financially backed by J.P. Morgan (reports range from $4 billion to nearly $6 billion) — including “welcome bonuses” to participating clubs of $300 million or more — and may go down as the storied bank’s worst-ever investment. One of the chief reasons is lack of consultation. Liverpool manager Jurgen Klopp said he was not consulted by the club’s owners, and neither were J.P. Morgan teams that would cop the political and media backlash.

Giving “bubble” a bad name: It appears that only a small group of very wealthy, middle-aged men at the clubs in question — working-class heroes like Russian billionaire Roman Abramovich — and J.P. Morgan bankers were in the loop.

The backlash may have been unexpected, but that doesn’t mean you couldn’t have predicted it. The Super League is so unoriginal even its name is a copy: stolen from Rupert Murdoch’s failed takeover attempt on Australian Rugby League football in the 1990s. The bottom line: J.P. Morgan is the new Murdoch.

BILLIONAIRES VS FAIR PLAY? The issue comes down to a fundamental question: “what is sport?” Is it an athletic competition, a toy for rich owners, or an entertainment product to be packaged and sold to the highest bidder? The multi-billion-dollar world of elite European soccer is undoubtedly all three.

Global versus local: European fans are understandably out for themselves — they’re not particularly interested in what billions of non-European fans may want from European soccer clubs, or how much money bankers and oligarch club owners may make from those global audiences. But European fans shouldn’t kid themselves either.

If money really is the problem, the horse bolted long ago. Yes, European soccer teams can be promoted to or relegated from various competitions based on performance (unlike in U.S. sports leagues), but there is no level playing field in terms of salaries, fringe benefits or facilities. Attempts by soccer’s governing bodies to address these money issues range from the toothless to the bizarre.

That means the Super League debate is about more than a simple choice between money and community. Some of the clubs that signed up to Super League are publicly listed companies: they long ago turned their fans into a combination of product and customer.

The problem is the brazenness of money. Big Sport exists in a unique gray zone of power. There is a legal owner of each club, there is a talent system of player-stars, and then there are fans who serve, in effect, as the moral owners of each team. It’s nearly impossible to achieve radical change to that ecosystem without consulting two of the three core components.

A MARKET OPPORTUNITY FOR GOOD GOVERNANCE: Aleksander Ceferin, the head of UEFA, European football’s governing body, minced no words in slapping down the new league, calling it “a spit in the face for all football lovers and our society.” What he really meant was that it was a spit in the face of his continental monopoly on soccer governance.

Soccer governance has a sordid recent history — there’s reason to think it can be improved: Cerefin’s former counterpart at soccer’s South American governing body wassentenced to nine years in jail in 2018 for taking bribes. Russia and Qatar bribed their way into hosting the 2018 and 2022 World Cups, and there’s the 47-count indictment then Attorney General Loretta Lynch brought against 14 defendants from soccer’s global governing body FIFA in 2015 — with FIFA President Sepp Blatter resigning in disgrace. Ian Watmore (a former boss of your author) quit as chief executive of the England’s Football Association in 2010, unable to countenance the dysfunctional vested interests managing the sport.

SPEAKING OF SPORTS CORRUPTION, WHAT ABOUT AMERICA? It’s not a surprise that U.S. prosecutors have been more interested in prosecuting foreigners involved in soccer corruption than in tackling American sports leagues. Sport inspires extreme devotion and creates unpredictable political effects. There is little incentive for local, state or federal law enforcers to dive into how sports franchises wrangle tax incentives and new stadiums from governments, or impose player contracts that class their superstars as highly-paid cattle. Pulling back the curtain is likely to reveal a mess.

WHAT ROLE FOR POLITICIANS AND REGULATORS? Boris Johnson’s government was afraid of losing the votes of football fans in northern England if it did not slap down the Super League. Yet it was extraordinary to witness U.K. Culture Secretary Oliver Dowden announce his government would change the law, if necessary, to stop the league going ahead, and when the Super League collapsed he insisted a fan-led review of soccer governance would go ahead regardless.

Government may shift from being promoters of competition in sports markets to suppressors of it. For 20 years of EU and U.K. regulators have used antitrust cases to loosen the grip of UEFA and the English Premier League in selling broadcast rights to soccer matches, arguing the soccer bodies are cartels, driving up the price of subscription TV for the very consumers that have rushed to defend UEFA this week.

GLOBAL RISKS AND TRENDS

RUSSIA’S EXPANDED TERRITORIAL AGGRESSION: Russia plans toblock international waters in large parts of the Black Sea through October, in addition to building up forces on Ukraine’s land border. U.S. Ambassador to Russia John Sullivan, is returning for consultations in Washington: “it is important for me to speak directly with my new colleagues in the Biden administration in Washington about the current state of bilateral relations between the United States and Russia,” he said in a statement.

BOAO FORUM WRAP — ASIA’S DAVOS: Chinese President Xi Jinping called Tuesday for global governance organizations to reflect a wider range of views. What he meant was a world with less NATO, and more China and Asia. “The world wants justice, not hegemony,” Xi said.

Xi called for “consultation on an equal footing to create a future of shared benefits” but did not offer any action that would indicate equal footing. The state-backed Global Times newspaper called for nothing less than a “political enlightenment movement to break free from the mind suffocation created by the US” — warning the world will otherwise face a “century of confrontation.”

TECH — AI RIGHTS VS BEATING CHINA: The European Commission published itsproposals for an AI rulebook today, including outright bans on the technology’s use in mass surveillance when it violates EU fundamental rights, and onerous checks in so-called “high-risk” categories including facial recognition in law enforcement. That’s a long way off proposals last month from the U.S. National Security Commission on Artificial Intelligence whose final report was focused on how the U.S could better compete with China.

GERMANY’S ELECTION SHOWDOWN — LASCHET VERSUS BAERBOCK: If the vote were held this weekend, only Greens nominee Annalena Baerbock would be positioned to form a government: she and the Greens topped a new poll after more extraordinary backstabbing among German conservatives this week. Armin Laschet, the new leader of Angela Merkel’s Germany’s Christian Democrats (CDU) will be the center-right candidate for Chancellor. Five things you should know about Laschet, by Laurenz Gehrke.

BIDEN MEETS WORLD

BIDEN BUILT AN ALL-STAR CLIMATE TEAM: But now they face their toughest test, organizing themselves and cutting through domestic division to provide meaningful global leadership.

NEW MANTRA — CLEAN ENERGY IS ABOUT COMPETITIVENESS: “It’s difficult to imagine the United States winning the long-term strategic competition with China if we cannot lead the renewable energy revolution. Right now, we’re falling behind,” Secretary of State Antony Blinken said Monday. With the clean energy economy being made in China (home to more than 80 percent of the world’s big battery plants) and Europe (hope to 8 of the 10 most capitalized clean energy companies), Democrats are launching a late-stage rush to lure it the U.S. through public research, taxpayer backing for risky start-ups and tax incentives across the entire battery supply chain.

160 finance companies back science-aligned targets: The world’s top finance firms are promising to stop emitting or funding harmful emissions by 2050 “at the latest,” in a new Glasgow Financial Alliance for Net Zero, chaired by serial green finance activist Mark Carney. Investors are starting to demand more clarity on such climate commitments: while it is now de rigueur for a company to promise a near-term “net zero,” their lobbying hasn’t always jibed with their public promises. Now shareholders are demanding transparency

THE CLIMATE REVOLUTION WILL BE LIVESTREAMED: John Kerry’s frantic global climate diplomacy faces its first real scrutiny this week, as the Biden administration gathers 40 leaders for an unpredictable live streamed climate summit. Government and corporate leaders have generally offered goodwill thus far to President Joe Biden, but the majority now expect him to announce a tough 2030 emissions target (408 companies call for it here), then get it through Congress, and explain how that will integrate with complex global climate political dynamics.

THE GLOBAL POLITICAL THEATER TO LOOK FOR AT THE SUMMIT:

1. How much will the U.S. boost its climate goal? And is it a number Biden can get through Congress?

2. Will the Biden summit help set the agenda for COP26 in Glasgow? This week’s summit was not part of the U.N.’s 2021 plan, but Biden gets what Biden wants. So the question is now whether this event builds broader momentum towards G-20 discussions and U.N. COP26 discussions.

3. Who brings the biggest new commitment? India is considering a net-zero target for 2047 — in time for celebrations of the centenary of its independence. Johnson’s U.K. government is outshining Biden by planning to cut emissions by 78 percent — compared to 1990 levels — by 2035, while the EU today signed a 55 percent cut by 2030 into law.

4. Can the U.S. put brakes on Asian coal? Michael Bloomberg has pumped close to a billion dollars into ending coal production. While that effort is working in rich countries, it’s not in China — and Japan, China and South Korea remain big backers of coal plants outside their own borders.

5. Will Biden succeed in swaying Brazil on the Amazon? Brazilian President Jair Bolsonaro says he wants billions paid up front for him to enact policies to reduce deforestation.

THE SULLIVAN MODEL: Elise Labott walks you through the collective efforts of National Security Advisor Jake Sullivan to build a foreign policy that delivers for and is supported by America’s middle class.

NEW AMBASSADOR TO BEIJING: Wall Street Journal reported that we can expect two-way ambassador traffic soon. R. Nicholas Burns, a veteran diplomat who has served in both Democratic and Republican administrations, may be Washington’s pick for Beijing, while Beijing plans to appoint Qin Gang, a novice ambassador who has acted as President Xi’s chief protocol officer, to D.C.

Is there a wolf warrior scrapheap? We’re about to find out. Nahal Toosi profiled outgoing ambassador Cui Tiankai here.

CHAUVIN IS GUILTY — BUT THE HARD ROAD IS AHEAD: Biden and Minnesota Attorney General Keith Ellison got the conviction they sought for Derek Chauvin, the police officer who murdered George Floyd. But the verdict wasn’t justice, Ellison emphasized, merely “accountability.” Justice will only come with deeper social transformation, according to a caucus of experts POLITICO consulted.

COVID — INDIA’S UNCONTROLLED OUTBREAK STOPS THE SPREAD OF VACCINES:

The global vaccine facility known as COVAX will deliver 145 million doses instead of about 240 million by end June. India, its main supplier, has largely stopped exporting shots as it fights a surge in cases at home.

GLOBETROTTERS

PRESIDENT OF CHAD KILLED IN ARMED CLASHES: President Idriss Déby died of wounds from a clash between government soldiers and insurgents who refused to accept his election victory, which he claimed on Monday. Déby was backed by Western governments, on the strength of his fight against Islamist extremist groups.

GREEN CEO RESIGNS AFTER TOXIC WORKPLACE COMPLAINTS: David Yarnold, the CEO of environmental group the National Audubon Society, is stepping down under a “mutual agreement,” coming on the heels of an internal audit into its workplace culture prompted by reporting from POLITICO.

CLIMATE BRAIN FOOD

— State of the Global Climate 2020, from the U.N.
— How the Trudeau government plans to meet its climate goals
— ExxonMobil’s climate pitch to Biden: A $100 billion carbon project that greens hate
— Progressives formally reintroduce the Green New Deal

Thanks to editor Ben Pauker and Karl Mathiesen.

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