Slate Money: "The Not So Super League"

Date: April 24, 2021
Host: Felix Salmon (Axios)
Guests: Emily Peck, Peter Thal Larsen (Reuters BreakingViews)

Episode Overview

This episode delves into three major stories: the spectacular collapse of European football’s proposed “Super League,” the financial implosion of Greensill Capital, and the contrasting COVID vaccine rollouts across the US, UK, and Europe. The hosts dissect the interplay between sports, finance, and politics, with their trademark wit and explanatory prowess.

Main Discussion Points & Insights

1. The European Super League Fiasco

[00:10–21:00]

What was the Super League?

• A proposal by 12 elite European football clubs to create a closed competition, effectively locking in status and revenue, much like US sports leagues (e.g., NFL).
• The plan promised regular high-profile matches for global TV audiences but excluded most clubs from participation.

Why Did It Collapse So Quickly?

• Universal Opposition: Fans, politicians (e.g., Boris Johnson, Emmanuel Macron), players, and media universally panned the idea as greedy and unfair.
  • Felix Salmon [06:26]: “It just kind of dropped. There was a leak in the New York Times…and no one was in favor of it.”
• PR Disaster: The rollout was “catastrophic”—there was no communication plan, lack of supporters, and no effort to address the concerns of fans or grassroots football.
  • Peter Thal Larsen [07:21]: “As a corporate rollout, it’s the most catastrophic product announcement I’ve ever seen.”
• Fairness Issues: Clubs would have permanent spots, killing the drama of qualification and the “magic” of football upsets.
• Financial Motivation: The goal was stable, cartel-style income for owners, not better football.

Legacy and Globalization

• The “old” fans (UK, Spain, Italy) care about domestic rivalries; new fans (Asia, U.S.) want star-studded spectacles.
• Tension between football’s roots as a local, merit-based sport and its evolution as a global, entertainment commodity.

Memorable Quote

• Emily Peck [19:09]: “It’s such a great example of sort of the competing forces in the world right now, like globalization versus populism and nationalism. And it all seemed to come to a head in this fight over football.”

2. COVID Vaccination Rollouts in Europe vs. UK/US

[21:00–31:59]

Contrasts in Progress

• US & UK Ahead: The US was struggling to find people to vaccinate (supply > demand); the UK was steadily vaccinating down through age groups.
• EU Lagging: Europe around 20% first-dose coverage versus UK’s ~50%; only 7–8% fully vaccinated.

What Went Wrong in the EU?

• Slow, Bureaucratic Procurement: The EU approached vaccine procurement cautiously, leading to delays in approvals and contracts.
  • Peter Thal Larsen [22:36]: “The EU was slow to jump on the vaccine bandwagon…It took them longer to approve vaccines and…sign up supply deals.”
• Botched AstraZeneca Response: Politicians’ skepticism and mixed messaging undermined confidence and rollout.
• Negotiation Challenges: EU tried to save money, less adept at “strong-arming” pharma companies.
• Nationalism vs. Fairness: EU’s joint procurement was more equitable but far less nimble than single-nation deals (e.g., UK).

Brexit Factor

• UK’s independence allowed swift vaccine deals—ironically, a point in favor of Brexit, at least logistically in this arena.
  • Peter Thal Larsen [30:52]: “That bit of not being part of the EU, I will admit, has worked out for them.”

Memorable Segment

• Emily Peck [26:19]: “One reason the EU is behind...maybe more fair because, you know, if Germany went it alone, maybe Germany would be moving much faster...trying to work together and do something more for the greater good.”

3. The Greensill Capital Collapse Explained

[31:59–42:10]

What Happened?

• Greensill, a lender specializing in supply chain finance, collapsed.
• Credit Suisse and other investors lost billions despite supposedly “insured” loans.

Why Did It Fail?

• Dependency on Insurance: When insurance backing its loan packages evaporated, the business model—already precarious—collapsed.
  • Peter Thal Larsen [33:27]: “That was the trigger that brought down the whole house of cards.”
• Shadow Banking Risks: Greensill repackaged supply chain loans to sell as investments, often off-balance sheet, reducing transparency.
• Non-Bank Structure: Unlike traditional banks, Greensill was not holding loans on its balance sheet, but selling them to funds for others to hold the risk.

The Supply Chain Finance ‘Wrinkle’

• Unlike classic supplier financing, Greensill’s model allowed companies to stretch out payments and effectively take on hidden debt without disclosing it as such.
  • Peter Thal Larsen [36:46]: “It’s a way of borrowing money that is not disclosed as borrowing.”

The David Cameron Angle

• Former UK Prime Minister worked as an adviser for Greensill, aggressively lobbying government for COVID relief access during the crisis.
  • Peter Thal Larsen [41:03]: “As far as we know so far, it seems that the heroes of this are the officials at the treasury and the Bank of England who basically listened politely to David Cameron and Lex Greensill and then told them to go away.”

Larger Lessons

• When hidden leverage and lack of transparency mix, financial “innovation” can mask big risks.
• Regulatory gray areas abound in non-bank lending.

Notable Quotes & Memorable Moments

• On the Super League’s fairness:
  Peter Thal Larsen [10:38]: “What was unfair…was the idea that you were going to exclude all these other clubs who in theory have a chance of winning their national league…And the idea that possibility was going to be completely removed.”

• On football ownership and billionaire incentives:
  Felix Salmon [14:12]: “…billionaire whimsy…It’s an amazing toy to have, and there are not that many top teams. And you want to own a football team and you get to own a football team.”

• On the role of shadow banking in Greensill:
  Peter Thal Larsen [33:27]: “The story about Greensill really I think is a story about shadow banking after 2008.”

Other Noteworthy Segments

Numbers Round

[42:35–47:36]

• Emily Peck: 5231 – The code to hack a McDonald's ice cream machine; referenced a Wired magazine story on tech innovation vs. corporate resistance.
• Peter Thal Larsen: -45 – The negative spot price in pounds per megawatt hour for UK electricity, illustrating the challenges of renewable energy oversupply.
• Felix Salmon: $99.99 – The “premium” entrance price for an NYC immersive art exhibit themed around Vincent van Gogh (teased for the Slate Plus segment).

Timestamps for Key Segments

• Super League explained: [03:35–07:21]
• Why the Super League was so unpopular: [07:21–11:58]
• Vaccine rollouts in UK/US vs. EU: [21:52–31:59]
• Greensill Capital collapse: [31:59–42:10]
• Numbers Round: [42:35–47:36]

Tone and Language

The episode strikes a balance between playful banter (Marvel jokes about the “Super League,” poking fun at football tribalism, and McDonald’s code hacking) and serious, clear-eyed economic analysis. Felix Salmon’s ironic, skeptical humor pairs with Peter Thal Larsen’s incisive European perspective and Emily Peck’s accessible questions.

For Listeners Who Missed the Episode

• The Super League taught a lesson on the limits of commercialization in European football, with fan and political backlash halting club owners’ attempt to “just make more money.”
• EU’s sluggish vaccine response is traced to political, procedural, and fairness-related bottlenecks—unlike the aggressive, more nimble UK and US rollouts.
• Greensill’s implosion is a warning about shadow finance: when “innovation” overtakes transparency, you get hidden leverage and eventual collapse.
• The episode is peppered with memorable, often tongue-in-cheek asides about football club allegiances, ice cream machines, and how energy markets work when the sun shines.

For more detailed insight into any of these topics, refer to the timestamps above.