Whether you are a football fan or not, you will no doubt have heard about the farce of the Super League in spring – where twelve well-known football clubs from England, Spain and Italy established a new football association, but it collapsed within 48 hours.
Counteracting the impact of Covid-19
The impact of Covid-19 has seen all football clubs struggle with financial support, especially the giant clubs. Ticket sales are a major source of income but the lockdown around the world has seen these dwindle. Yet these clubs still need to pay the high salaries of their superstars, imposing a great burden on their operations. That’s why they were eager to join in the Super League, even though they could anticipate a lot of pressure with such a choice.
From a commercial point of view, the Super League seems to be a good design. The best teams are gathered under a ‘self-competition’ system to obtain better bargaining chips with broadcasters. This model can maximise their expected benefits. For broadcasters, there may be no game with more purchase value than the Super League. This could be the most luxurious event the football world has ever seen, and each game could attract a lot of attention. Moreover, the rumour of the Champions League expansion worries these big clubs due to the potential loss of profit share. All these reasons incentivised the launch of the Super League – a commercial product to counteract the impact of Covid-19.
Doomed to fail
Despite the seemingly successful commercial cooperation, the closed interest groups of the Super League abandon the competitive spirit of football. Unlike the Champions League where the top ranking teams advance, the closed Super League completely stifles the upward channel of the middle and lower teams. In other words, players have little incentive to compete without promotion and relegation. As Marcus Schreiber points out in a recent article, this not only undermines the idea of fair sporting competition, but also the market economy as a system that is based on permeability and in which one can move up and down economically.
Although football matches are a commercial activity, the spirit behind football makes it well-loved all around the world. Just as my beloved Liverpool’s song “You’ll Never Walk Alone”, crazy players competing for the victory, fanatical supporters showing love to their idols, together with the spirit of competition, all make football enchanting. The Wall Street hedge fund owners, who provide the money to the Super League, can never fully understand this. In their minds, lack of competition or a closed format means the best way to lock in profits. In some sense, they are founding a football cartel and misusing market power.
The Super League not only steals jobs from the Champions League and national leagues, but it also cuts off the blood supply of football to a large extent. The emergence of the Super League will also subvert the order established by professional football over the past century and even affect the overall development of football.
Prisoner’s dilemma
For those who are interested in game theory, the prisoner’s dilemma is probably the first lesson encountered. Now, let’s look at this event from a game theorist’s perspective, to see why the Super League collapsed within 48 hours.
The table above shows the prisoner’s dilemma payoff matrix, which was originally framed by Merrill Flood and Melvin Dresher. It describes a situation where two prisoners are arrested and decide independently whether to stay silent or betray. If both of them stay silent, the payoffs will be -1 for each (equivalent to both serving one year in prison). If both betray, the payoffs change to be -2 (equivalent to serving two years in prison). If A betrays but B keeps silent, A’s payoff will be 0 and B’s will be -3 (equivalent to A being released and B put in prison for three years). If A stays silent and B betrays, the payoffs for A and B will be -3 and 0 respectively (equivalent to A serving three years in prison and B going free).
Based on game theory, the only equilibrium in this case is that both players betray and serve two years in prison. Although strictly they can be better off by both keeping silent, each player has the incentive to deviate because betraying offers a higher expected payoff. That’s why it ends up with the worst-case scenario and we call it the prisoner’s dilemma. In reality, humans always have a behavioural bias towards cooperation.
If we look at the Super League from a game theorist’s point of view, the situation is very similar to the prisoner’s dilemma. Twelve football clubs act as prisoners, facing great pressure from all of society, and need to decide whether to stay in the Super League or betray and quit. If all of them stay collusively, they will receive a lot of benefits from Wall Street but incur losses on their reputation and punishment from UEFA. Generally speaking, this should be better than all betraying, given they will all be penalised in this scenario. However, if any team benefits from betraying, the whole organisation will collapse, and all the teams end up quitting.
In this event, the strategy implemented by UEFA to “solve” this dilemma is very simple – giving benefits to those who quit and severe punishment to those who stay. Together with the huge pressure from angry fans and society, even the Government, the expected payoff of betraying becomes much higher than staying.
Subsequently, the association did collapse as game theory predicted, and we witnessed another example of behavioural bias towards cooperation.
If we look at the Super League as a football cartel it offers a good way to show how this cartel was destabilised. In order to break up the collusion, the weakest link of the cartel becomes the best target. In this case, Manchester City was UEFA’s choice and became the first club to withdraw. With the support of the Middle East consortium, Manchester City does well financially. After winning the Premier League, the Champions League has always been the team’s holy grail. Being only a few games away from their first Champions League honour, it was an easy choice for Manchester City to make given UEFA’s threat of cancelling their Champions League qualification for this season. The others then fell like dominoes, within 48 hours.
It’s a game of two halves
The game has not yet ended. According to the news, the Super League may in turn try to sue UEFA and FIFA for abusing market power. It would never be easy to define who has the market power and how it has been misused. To cooperate or not, that’s always the question…
Sources
2) Nur 48 Stunden: Wie die Super League zu einem Lehrstück in der Spieltheorie wurde