The Worst Business Launch in Recent History
On April 17, 2021, the European “Super League” was launched. Two days later, it crashed and burned. How did a project that had been in the works for three years end up lasting 48 hours? This is one of the worst new venture launches in recent history. But just what went wrong?
In Europe, they take their soccer (or football, as they call it) very seriously. The league is dominated by “The Big Four” – Manchester United, Liverpool, Arsenal, and Chelsea. The cost of running these teams is not cheap. One team was carrying debt of more than $1 billion in 2020. The way that the units are compensated highly favors the more competitive teams, as you might expect. TV and radio broadcasts provide significant revenue for the high profile teams, but payments are next to nothing for those who are not popular since few people watch or listen to those games.
The cost of running these teams is not cheap. One team was carrying debt of more than $1 billion in 2020.
Enter the “Super League.”
The idea was to create a new league and establish new media contracts and thereby level the playing field among the twelve clubs planning on joining this league. Despite advisors warning that “this is going to be spectacularly difficult,” the group moved ahead. Two of the final twelve teams were on the fence and only signed on at the 11th hour. So, there were many warning signs, but they all went unheeded.
The Proverbial Last Nail
What was the final nail in the coffin that doomed this effort? It wasn’t money since they had established a $4 billion line of credit with JP Morgan. It wasn’t a lack of solid teams to fill out the roster. They had the Big Four. No, none of these were the cause of its demise. It boiled down to the “consumers.” That’s right, the fans. No one bothered to consider what the reaction might be from the people who make it all possible. European soccer has very dedicated and loyal fans - both to their teams and to the league. The idea of making any changes to either one, even if the change is relatively minor, is enough to cause a furious and swift response. That is exactly what happened.
No one bothered to consider what the reaction might be from the people who make it all possible – the dedicated fans.
There was one more factor that played into it that also was not taken into consideration. As the public immediately rejected the idea, several politicians jumped into the fray. One of the key factors that was important to the success of this new league was that the participating clubs were to be reclassified as protected institutions. When a key political figure in the U.K. threatened to drop a “legislative bomb” on the proposed restructuring, the whole thing imploded like a house of cards. One team after the other began drawing up papers to withdraw from the new league. By midnight, all twelve teams were out.
The Lesson Learned:
- Consumers are king. Companies (or soccer teams) can do all of the strategic planning they like, but the results can be devastating if consumers are not factored in.
- Key influencers need to be informed. If this new league had bothered to review it with the important political factions before moving ahead, they could have put to rest any concerns there may have been. Or, at worst, they would have known not to proceed.
- Chasing the money often leads to poor decisions. The potential for more money was driving this project. Period. That framework for decision-making often causes companies and their leaders to be blind to anything that gets in the way (including little to no support by the very people where the money comes from).
- Cautious planning alone does not ensure success. The group behind the three-year planning process felt that they had meticulously planned for anything and everything. After all, spending more than three years on the project should guarantee success. Maybe four years would have been better? Five?
- Sometimes evolution wins out over revolution. There are certainly times when innovation calls for a revolution. But there are other times when steady evolution wins the day. The key is to know which one is the right call.
As the league fell apart, the co-owner of Liverpool, John W. Henry, had this to say to the fans: “I alone am responsible for the unnecessary negativity brought forward over the past couple of days. That’s something I won’t forget.” Personally, I wonder if he hasn’t forgotten already.