The bank that was to provide billions of dollars in financing for a breakaway European soccer league said it “misjudged” how fans would react.
JPMorgan Chase apologized on Friday for its role in arranging billions of dollars in financing for a breakaway European soccer league, admitting in a statement that it had “misjudged” how the project would be viewed by fans.
JPMorgan Chase had pledged about $4 billion to underwrite the new league, but the American investment bank did not end up issuing it or losing any money: The league collapsed only 48 hours after it was announced, after more than half of its 12 founding clubs changed their minds and announced they would not take part.
Like the 12 clubs involved in the breakaway group — which included European giants like Real Madrid and Barcelona, Manchester United and Liverpool, Juventus and A.C. Milan — JPMorgan had come under intense criticism from fans and others merely for participating in the plan.
Designed as a 20-team league with 15 permanent members, the Super League would have severely cut in to the revenues of dozens of national leagues, imperiled the finances and values of the hundreds of European clubs who were left out, and upended the structures that have underpinned European soccer for a century — all while funneling billions to a few elite teams.
In a corporate statement rare for its contrition and self-criticism, JPMorgan admitted it had been a mistake to finance the proposal without considering its effects on others.
“We clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future,” a company spokesman said. “We will learn from this.”
But in an interview with Bloomberg TV, the bank’s co-president, Daniel E. Pinto, also sought to distance JPMorgan from the blowback that is still buffeting the clubs.
“We arranged a loan for a client,” Pinto said. “It’s not our place to decide what is the optimal way for football to operate in Europe and the U.K.”
“We were expecting this to be emotional, we were expecting people to have different opinions,” Pinto added, “and that is what is happening.”
Top debt financing executives at the bank had been involved with the group for months, trying to put in place the equivalent of a mortgage that would underwrite the start of the new competition, which organizers hoped to pay down with one of the richest television deals in sports history.
Instead, the majority of the Super League’s members pulled out within 48 hours of its creation.
JPMorgan was not the only powerful institution to offer an apology for its involvement. The majority of the English teams, some of the most popular in world soccer, issued humbling explanations for their decisions to join the failed project. But it was sight of billionaire Liverpool owner John W. Henry, an infrequent public speaker, taking personal responsibility for the fiasco that brought home how catastrophic the endeavor had been.
“I’m sorry, and I alone am responsible for the unnecessary negativity brought forward over the past couple of days; it’s something I won’t forget,” Henry said in a video posted on Liverpool’s website. In it, he apologized not only to the club’s fans, but also to the team’s players, to the club’s manager, Jürgen Klopp, and to other top team executives who were not consulted on the club’s decision.
Joel Glazer, the billionaire co-chairman of Manchester United, also issued rare public comments. “Although the wounds are raw and I understand that it will take time for the scars to heal, I am personally committed to rebuilding trust with our fans and learning from the message you delivered with such conviction,” Glazer wrote in a letter to fans that acknowledged the club had made a mess of things.
“We got it wrong,” Glazer wrote, “and we want to show that we can put things right.”
No one connected with the project was able to escape being contaminated by the criticism, including the bank that financed it. JPMorgan’s chief executive, Jamie Dimon, found himself under attack on social media and from within banking circles.
“How on Earth did such an experienced C.E.O. that is so good at connecting with the real world, how on Earth did they let themselves let this proposal get to where it got?” a former Goldman Sachs economist, Jim O’Neill, told Bloomberg.
The criticism was particularly sharp for Dimon, who in recent years has been eager to position the bank as a good social and corporate citizen.
But even as it sustained an immense reputational hit, JPMorgan has been able to walk away from the deal without suffering financial losses.
That might not be true for the teams that walked away after signing contracts that bound the 12 founding members to the breakaway concept.
The Super League is not, in fact, officially dead. Real Madrid, Barcelona and Juventus are still signed up, and continue to strategize.
One reason they may not have walked away could be financial. The contracts signed by the 12 founding members included penalty clauses worth millions of dollars. Real Madrid, Barcelona and Juventus, whose mounting debts and fears of rising costs led them into the project in the first place, could be positioned — by staying in — to extract tens of millions of dollars in punishments out of their former partners for walking away from it.
Source: Soccer - nytimes.com
