The Brief — The football cartel

The behaviour of football associations like FIFA and UEFA can best be understood when they are seen as economic cartels in an industry favouring natural monopolies.

The first games of the World Cup have already been played but for now, public attention still seems to be centred on the politics around the event – rather than on the games.

From the initial corruption scandal that led to Qatar being handed the rights to hold the World Cup to the abysmal treatment of the workers that built the stadiums for the 28-day event, and the homophobia of the Qatari government, there are plenty of reasons to call this a “world cup of shame”.

In fact, members of the European Parliament did so when they interrogated the Qatari labour minister in Brussels last week.

On Saturday, FIFA president Gianni Infantino caused another uproar when he said he felt gay, disabled, Arab, and like a migrant worker in a rambling speech to defend Qatar and FIFA from criticism.

While it is peculiar that the man with a multi-million salary seemingly cannot afford a better speechwriter, his apparent detachment from reality is less surprising.

As head of FIFA, Infantino is not accountable to public opinion but to the functionaries of the national football associations that make up the FIFA membership, a rather more exclusive set of constituents.

His job is best understood as that of a cartel boss who extracts as much economic rent as possible from the cartel’s position as the sole organiser of worldwide football competitions, distributing the gains among the group members.

Infantino’s job is secure as long as he can credibly get more money to flow to more cartel members than any potential contender for his seat. Whether the money is ethically earned is not a particular concern.

Understanding the organisation of international football as an economic cartel also helps to understand the European football association UEFA, which openly admits that the basis of its success is its “centralisation” model, which is a somewhat nicer term for a monopoly.

When twelve of the biggest European football clubs announced their intention to start a parallel European Super League (ESL) to rival the UEFA Champions League in 2021, UEFA and its member associations came down hard on them, threatening to exclude them from national and European competitions.

And when the new boss of the ESL organising firm A22 went to the UEFA headquarters earlier this month to talk about the future of European club football, he was not met with an open ear, but with more than 30 representatives of European football who poured scorn over the ESL project – a cartel closing its ranks.

The ESL organisers have brought the case to the European Court of Justice, claiming that UEFA constitutes a cartel that violates EU competition law.

Of course, the goal of the ESL organisers is not to just play football for fun. They want to become the new best European club competition, hoovering up the money for TV rights and sharing less of it among other clubs and associations.

The organisation of football competitions might be an industry with a “natural monopoly” since there can only be one ‘real’ World Cup and only one ‘best’ European club competition. Thus, a cartel might be the inevitable form of organisation in international football.

However, natural monopolies in other industries are usually tightly regulated to rein in their power, for example, operators of electricity grids.

Football might not yet be as important as electricity grids, but the more the football cartels misbehave, the more they build the case for their regulation.

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The Roundup

The EU and US are expected to extend the mutual recognition for manufacturing standards to plasma and vaccines while continuing to monitor China’s protectionist developments related to medical devices.

The European Parliament’s rapporteurs circulated a new batch of compromise amendments redesigning the enforcement structure of the AI Act.

There is significant momentum to find a compromise on a new EU pact on migration and asylum, Manfred Weber, president of the European People’s Party, told EURACTIV in an interview.

The Czech presidency has circulated the first compromise on the Cyber Resilience Act, dated 18 November and obtained by EURACTIV, heavily editing the proposal’s scope and free movement clause.

Last but not least, don’t miss the latest Transport Brief: Are beef-powered cyclists a climate threat?

Look out for…

• European Economic Area Council meeting.
• Commission Vice President Margaritis Schinas, Competition Commissioner Margrethe Vestager and Jobs Commissioner Nicolas Schmit meet with representatives of European social partners to discuss European Year of Skills.

Views are the author’s.

[Edited by Alice Taylor/Nathalie Weatherald]