How JPMorgan Chase got European football so wrong

When JPMorgan Chase agreed to finance a breakaway competition of some of the world’s richest soccer clubs, it expected some heated discussions.

But America’s biggest bank didn’t foresee this: Following massive blowback from fans, the sport’s governing bodies, UK Prime Minister Boris Johnson, French President Emmanuel Macron and even the British royal family, efforts to form the European Super League crumbled in a matter of days.

Six English Premier League clubs — Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur — announced their withdrawal on Tuesday. Italian giants Inter Milan and AC Milan and current Spanish league leaders Atletico Madrid followed suit on Wednesday.

“I don’t think that project is now still up and running,” Andrea Agnelli, chairman of Italian club Juventus and one of the plan’s key architects, said on Wednesday.

The 12 teams that tried to form the doomed league have been accused of seeking to orchestrate a massive cash grab by walling themselves off from competition, a goal that runs counter to the traditions of European football.

JPMorgan, which provided a €3.5 billion ($4.2 billion) loan to get the project started, is now being painted as a willing accomplice to billionaire club owners out to line their own pockets while undermining one of Europe’s prized cultural assets with its roots in working-class communities.

The bank has faced criticism and mockery on social media for its role in the deal. One Twitter user sarcastically included a screen shot of Jamie Dimon’s recent letter to shareholders, in which the CEO states that “businesses must earn the trust of their customers and communities by acting ethically and morally.” Others joked about the demise of the “JPMorgan Cup” and slammed America’s efforts to “invade” the European sport.

How did JPMorgan get it so wrong?

That bank said on Friday it “clearly misjudged” how the proposed Super League would impact football.

“We clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future. We will learn from this,” a JPMorgan Chase spokesperson told CNN Business.

A source familiar with the discussions said the bank’s involvement was vetted by an internal committee that assesses potential deals for reputation or credit risks. The lender predicted there could be controversy, but in the end, it would be a matter “for the football world to decide.”

“There’s always a large emotional component to [sports],” the source said. “When you’re making a financial decision on a loan, you have to try to put emotion aside.”

The source said discussions about forming a league had been underway for a number of years, though JPMorgan was not involved in any negotiations between clubs.

The bank had existing relationships with many of the teams involved. It provided stadium financing for Real Madrid, whose president Florentino Perez was also set to lead the Super League.

The debt financing agreement was a long term bet, with funding set to be paid off over 23 years and secured against the competition’s future broadcasting rights, which were expected to be extremely lucrative.

But JPMorgan clearly underestimated the magnitude of the backlash, which the source admitted had been “extraordinary.”

The bank will not suffer a financial loss if the project doesn’t go ahead. But among some fans of the sport, its image has taken a major hit.

“The reputational risk in being the principal financier … is massive,” commentator Ben Marlow wrote in a column published this week in UK newspaper The Telegraph. “Bank-bashers will see it as a gift.”

The Guardian observed that it’s a good thing JPMorgan has not yet launched its new digital UK bank.

“If it had, calls for a boycott would probably be heard already,” wrote financial editor Nils Pratley.