Rabo: The Angry Public Wants To Give A Red Card To The Whole Global System

By Michael Every of Rabobank

A red card for the whole system

“IT’S RED!” A straight red card for Global Neoliberalism United, that is. 12 of Europe’s top football (‘soccer’) clubs are planning to break away from their already-lucrative elite domestic leagues, and their even-more lucrative Champions League, in order to form a breakaway closed-loop European Super League with no relegation and no cup competitions. In short, the richest (if not most successful) clubs, and the world’s most famous players, are potentially about to walk away from the entire global system of football – including the quadrennial World Cup – to keep all of the global money in the game rather than sharing just a little of it with others: this is of course backed by Wall Street and private equity to the tune of USD8bn.

Even the US football system sees the least successful team get first pick of the draft new players; by contrast, global football has long seen increasing returns to the biggest clubs and their subsequent de-anchoring from their own domestic and now pan-European leagues. Amazingly, this puts UEFA –an institution with the transparency and public affection of a Bond Villain– in the position of the good guys trying to hold the game’s gossamer-thin ties to its grassroots. This is, sadly, perhaps what the market wants though: endless ‘Clash of the Titans’ games with no consequences. No true fans needed, just click-bait viewers. In which vein, may I make some suggestions to the bankers setting up the new rules to make it even more neoliberal/lucrative?

• Two halves of 45 minutes without ad-breaks doesn’t work – so let’s have 10x 5 minute ‘plays’ with 1 minute ad-breaks in-between before and after half-time’s 15-minute long ad-break;
• Off-side and hand ball rules are confusing and stop goals being scored – so let’s get rid of them;
• The middle of the field is irrelevant because no goals are scored there – so let’s cut it out and move the goals closer together;
• The size of goals reduces the number of goals – so let’s make them twice as big; and
• Defenders touching attackers risks injury, so you might not get to see your favorite player score in the Big Derby every week – so let’s make the sport non-contact.

If my contempt shines through here – good. As a third generation fan of one of the teams on this breakaway list, whose mother was waved a mascot in the stands by his grandfather – I am out. I will never love another team, but I no longer care what happens to the next iteration of this one. And as for the neoliberal Beautiful Game, the real beauty is that if the USD9bn invested proves misspent because fans don’t want to watch sport like a movie trailer rather than a movie, then all involved will just call for the referee’s Fed card.

European press will no doubt be dominated by this news today: yet the power-play here reflects the world around us in microcosm – and ‘reds’ are deeply involved again.

• New US regulations mean companies will have to ask permission from the government to use any IT equipment and services from China or other countries deemed “adversaries” as of May, seen impacting up to 4.5m firms. This potential disruption comes on top of a shortage of semiconductors already seeing global production lines halted. So a rich, break-away, closed-loop league(?),…and just as a PBOC advisor states from 2025 China’s growth will slow sharply due to a demographic collapse, which will cause a crisis in consumption: so much for Wall Street/private equity straight-line projections on *that* front;
• Jack Ma is reportedly being pressured to sell his stake in Ant Group; and
• In the Netherlands, De Volkskrant reports Huawei would have had free access to national telco KPN’s mobile network in the past and could eavesdrop on all conversations, including the government: what does it imply about future choices of IT systems in Europe?

Then again, over the weekend France and Germany had another side-bar discussion with China, underlined they want to ratify the CAI investment deal despite EU parliamentarians being under Chinese sanctions, and Germany stressed ongoing cooperation. That’s as Deutsche Telekom is still working with Huawei, and VW states “…we will also stand by our engagement in Xinjiang, as long as we think it’s doable from an economic point of view.” Even so, after finishing the call Xi Jinping attacked the EU for plans to impose green tariffs to prevent ‘carbon leakage’ (and financial leakage from any Green New Deals – though what is China’s own ‘dual circulation’, one may ask?). This follows the pattern of their last video chat being followed by China arresting dozens in Hong Kong, leading to the aforementioned tit-for-tat sanctions on EU MPs. Someone doesn’t learn.

Ironically, Macron has just stated there has been a “naïve approach” towards Russia and “clear red lines” need to be set by the international community. Some would point out that these already exist in the form of Ukraine’s border. There, a huge Russian military force has been assembled, and continues to grow. Military (and financial) logistics suggest it must either go home soon – or be used.

Tellingly, Belarussian President Lukashenko has alleged an assassination attempt against him; Ukraine and Russia have both expelled diplomats; the Czechs have expelled 18 Russian intelligence operatives; and imprisoned Russian opposition leader Navalny, on hunger strike, may be close to death according to his family, something the US says would have “consequences”  – so the background music is ominous. Putin gives his annual address to the nation on Wednesday, which could be key. Yes, these tensions could rapidly fade away: but those with more military expertise than market analysts suggest the Russian aim could be to seize eastern Ukraine up to the Dnieper river, and the whole Black Sea coast through to Transnistria. If so, the potential consequences, and precedents, even raise the spectre of 1930’s-style break-aways from the League. (Tumbleweeds here, no doubt, from those in markets who don’t know the history I am referring to: they are too busy making magical straight-line projections about goals per game and Chinese consumer spending, all underwritten by expectations of central-bank bailouts.)

Relatedly, with Turkey banning crypto from the real economy, India planning to, and Wall Street in love with it (because it was going up – past tense), there are unconfirmed reports today that Cuba might adopt Bitcoin to try to work its way around US sanctions. To which I ask: only Cuba? That’s another awkward break-away/big money topic to focus on: so let’s not.

Indeed, let’s all talk about football today instead, why not, and see if the outrage already being expressed by the likes of the British Prime Minister is enough to stop this one microcosm of the problems that we face, in the hope that it is enough to assuage an angry public that would, if it could, give a red card to the whole global system.