Details of the proposals for the Club World Cup have been leaking out at the Financial Times. FIFA is due to consider the entire proposition which is valued at around $25 billion, and seems to come from a consortium led by Softbank. The World Club Cup element is said to be worth around half of this and entails a competition every four years in the slot currently occupied by the Confederations Cup which is to be abolished.
The tournament would involve 24 teams, of which half would come from Europe (UEFA). I assume the format would be along the lines of the World Cup- six groups of four initially, then the top two and the four best third-placed teams go on to a knock-out round of sixteen, and so on to a final. That would produce 40 games (including a 3rd place playoff), valued at around $3 billion, which is comparable, if a little less than the annual value of the UEFA Champions League. That competition has 125 games, but 96 of these are the group stage games which pit giants against minnows with largely predictable results and small audiences. It’s the later stage games that generate the real money.
Way back in 1999 I published a paper with Tom Hoehn (The Americanization of European football, Economic Policy, Volume 14, Issue 28, April 1999, Pages 204–240) which suggested that this kind of development was inevitable for a simple reason. The big European clubs are very attractive to watch but they hardly ever play each other. The FT provided two hypothetical lists of clubs (option 1: Arsenal, Atletico Madrid, Barcelona, Bayern Munich, Borussia Dortmund, FC Porto, Juventus, Manchester City, Manchester United, Paris Saint-Germain, Real Madrid, Sevilla; Option 2: Atletico Madrid, Barcelona, Bayern Munich, Borussia Dortmund, Chelsea, Juventus, Liverpool, Manchester City, Manchester United, Paris Saint-Germain, Real Madrid, Sevilla).
Between 2007 and 2017 (ten seasons) these clubs met in the Champions League 148 times (option 1) or 136 times (option 2). If these twelve teams just formed a conventional European league they would play each other 264 times- more times in one season than over an entire decade. The FIFA bid demonstrates that there is untapped potential for watching these games (at least in the minds of broadcasters). Indeed, the FIFA proposal would not contribute that many of them – just one hundred or so on average each decade.
It’s a very smart move, largely because the obstacle to most new developments is the crowded fixture calendar and losing the Confederations Cup is not likely to upset anybody. UEFA might worry that it will undermine the value of the Champions League – but it’s hard to see that it would make much of a dent. For example, Barcelona played Bayern Munich only six times in the past decade. It’s hard not to imagine that this match –up would be highly watchable twice a year (20 times in a decade). In the World Club Cup they might meet a couple of times in a decade, but they could miss each other entirely.
However, UEFA might also fear expansion- playing in the year of the World Cup or the Confederation Championship (Euros, Copa America, etc) might not be feasible but the other off-year might work. And you might also play it during a midwinter break.
I think the Achilles heel of the proposal will be the inclusion of teams from outside UEFA. Even the South American teams nowadays look weak compared to UEFA – the Europeans have won nine of the last ten World Club Cups. But Asian and North American teams are not remotely competitive. They will provide about as much interest to global audience as do the group stage games of the Champions League.
And finally there’s location. Is this about developing Asian markets or the US market? If played in the Asian time zone the demand could be huge, although this will limit demand in Europe and in the US there would probably be no market. If you play it in the US then it will reach Asia mid-morning, which would limit interest there. Europe and Africa are perfectly placed in terms of time zones- maybe South Africa to utilize all those three quarter empty stadiums.
First, the proposed plan differs substantially from the Hoehn & Szymanski piece because it selects teams based on some frozen question of popularity rather than sporting merit. To this extent it violates the European Model of Sport and arguably distorts competition.
Second, as a cultural matter, H&S were more sensitive to an important distinction between sport and other businesses. In the market, it is one-euro/one-vote. Intensity of preferences are measured by how much money consumers will spend. Unclear if this is how we as a society want sports to be organized. Economist Szymanski is likely correct that the market equilibrium is for hundreds of millions of couch potatoes to either become avid supporters of 24 clubs around the world, or to have no preferences (perhaps other than the third-tier league club supported by the grandmother) and simply enjoy as a fan excellent contests among the 264 best players in the world, all of whom play for the top 24 clubs. It is not clear whether this is the best way to organize the social institution of sport.
This is not an easy issue. Some would say that those like me who question the consolidation of sport into a single global competition, consigning the wide number of other clubs who now might compete for trophies or titles, are like the septagenarian activists in the Kent Co Cricket Club who opposed T20. But if sport is different, whether the economic equilibrium is socially desirable is worth rigorous and serious consideration.