Shaking the Delusional Tree
“Getting rid of a delusion makes us wiser than grasping at the truth….”
The collapse of the Super-League Football coup is a great illustration of just how self-delusional big money can be. After delusion comes acceptance, which is what Netflix faces as post-covid subscription growth slows in an increasingly crowded Streaming Wars space. It won’t kill the company, but will refocus investors on the depth of its’ moat and profitability. The same process is likely to be repeated across markets as delusional myths unravel.
This morning: The collapse of the Super-League Football coup is a great illustration of just how self-delusional big money can be. After delusion comes acceptance, which is what Netflix faces as post-covid subscription growth slows in an increasingly crowded Streaming Wars space. It won’t kill the company, but will refocus investors on the depth of its’ moat and profitability. The same process is likely to be repeated across markets as delusional myths unravel.
The collapse of the European Super-league franchise, Netflix’s brush-with-reality results, meme-stocks and the wobble in cybercurrencies share a common them. The Power of Delusion – the power entrepreneurs, investors and traders have in believing they know better, and they understand more.
The retreat of all six of the English clubs from the Super-League last night had all the ingredients of a failed palace coup in a Ruritanian state. Heads are going to roll – although in the immediate short-term some face-saving deal will be struck welcoming the chastened rebels back into the fold. But it won’t last – the current club owners are doomed. They have lost the support of the “legacy fans” they so despise, crystalised opposition at the highest political levels, and now face mounting losses that will reveal the perilous economics of the beautiful game.
Of the 12 clubs in the super-league, only Chelsea was making any form of discernible profit. The rest need constant cash to support their bloated models. When Arsenal, (the team I support because they are as boring as Hearts), and Spurs have won almost nothing in years and seem determined to flounce stroppily around mid-table – you have to wonder what was so super about the Super-league.
Money and Football? There is a book to be written about it.
What could we not learn about corruption from Sepp Blatter and FIFA? The business of Football could not have been better designed for self-serving kleptocracies to carve up. Who would not want a share of the billions in revenues European football could generate? What is the difference between FIFA or other groups skimming billions off the top in entitlements and bribes, from some American, Russian and Asian billionaires looking to rip the profits from the game?
Working in the field of private debt I find it incredible how easily broke football clubs can find easy money to acquire players or fund stadium upgrades. Compare and contrast to how difficult it is for businesses with solid, profitable and long-term growth strategies to raise capital. The world is topsy-turvy.
I suspect the ease at which clubs have been supporting their dubious financial edifices is about to come under pressure and serious problems will emerge. Fans may be hi-fiving themselves now for saving their clubs – but tomorrow the bill have to be paid… And who is now going to do that.. Step forward JP Morgan or the next hedge fund with a vision… by which they get to reap the game revenues. Post this week’s football revolution…. the money will quickly reassert itself.
On the face of it, the Super-League should have been a simple slam-dunk for the club owners – the guys financing the club’s monumental negative income streams – to monetise their assets by focusing on extracting maximum revenues from targeted global brand management. The super-league plan was predicated on the fact overweight spotty-tech geeks in unheard of Chinese cities are very willing to pay to watch the beautiful game on cable while buying expensive team strips and merchandise.
Their mistake was in not understanding the reality: Who does football below to?
Abramovich may own Chelsea, but football does not belong to him. Other owners made the mistake of considering domestic fans as something of a distraction – daring to question who clubs belonged to, complaining about the club and team management, the ownership structure and causing crisis when the occasionally rioted. Club owners would be happy to be rid of them in order to more fully monetise their assets. Politicians may be happy to be wined, dined and funded by club owners, but voters have the vote.
Compare and contrast the passion of European and South-American football to the stultifying dullness of American team sports – where everything from the meaningless commentaries, the watered down beers, and atrocious hot-dogs are franchises to be milked for profit. Where rules are written to suit ad-breaks, and cheating is condoned if punishment would damage the business. That was what frightens fans – the soul being ripped from their game.
But it will probably happen anyway. The football revolution has just begun. Handing the clubs to their fans will not solve the problem of the broken financial model. Personally I am switching support to Hamble FC, the Monks, as we seek glory in the Wessex Premier League!
Συνέχεια ανάγνωσης εδώ
Πηγή: morningporridge.com
