Champions League still a big earner for Premiership clubs

There is an emerging school of thought that qualification for the European Champions League is no longer quite the financial and commercial boost that it used to be, given the galactic increase in Premier League TV money showering fortunes on all 20 clubs from 2016-19.

It is true the increase in the English top flight’s broadcasting deals, from £5.1 billion (€5.9 billion) in 2013-16 to £8.4 billion (€9.8 billion) in the present three-year cycle, is a dramatic windfall – inflated at home by BT’s serious designs on BSkyB’s 25-year subscriber stranglehold and internationally by increased coverage of the Premier League on channels all over the world. However, the idea Champions League participation is now less important dissolves on analysis because it misses several crucial elements – as well as the actual figures, which show it remains a lucrative earner for the top clubs.

The three-year cycles for Champions League TV deals overlap with the Premier League’s; next season will be the final one of Uefa’s 2015-18 deals before the 2018-21 arrangements, which are being concluded now, begin. The current cycle, which the qualifying clubs will share for the final time next season, sold for almost exactly €4 billion over three years: €1.345 billion for the 32 clubs in each season of the competition. This is still serious money for the top clubs, with the English four helping themselves to a larger slice because the money is distributed partly according to the “market pool”, which rewards clubs in line with the scale of TV payments from broadcasters showing the competition in their own country.

Performance bonus

Last season Manchester City, who reached the semi-finals in which they lost 1-0 on aggregate to Real Madrid, racked up €83.8 million from Uefa. That total was made up of the basic €12 million paid to all 32 qualifying clubs, a €6.4 million performance bonus, €46.9 million for the market pool, and the per-round payments: €5.5 million for the last 16, €6 million for the quarter-final and €7 million for reaching the semi-final.

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Even with City’s overall income rising again in 2015-16 to a club record £391 million (€454 million), the Champions League money, purely from Uefa, leaving aside income from the matches themselves and other commercial benefits from performing in Europe’s elite competition, was 18 per cent of that total. It was worth a very substantial further 61 per cent of the £100 million (€116 million) City earned domestically from broadcasting – at the pre-Brexit referendum exchange rate. Uefa’s euros are now more valuable since the fall in the value of the pound after the vote. All of which rather puts the City fans’ habitual booing of the Uefa Champions League anthem in some perspective.

Chelsea, knocked out in the round of 16 last season 4-2 by Paris Saint-Germain, put €69 million in the bank from Champions League TV money; Arsenal, who reached the same round, where they lost 5-1 on aggregate to Barcelona, made €53 million, while Manchester United, who under Louis van Gaal's management failed to emerge from the group stage, nevertheless went home with €38 million.

Windfalls

It is true the significance of those windfalls will reduce for two seasons this year and next, given the Champions League will still be paying €1.345 bn a season to its competing clubs during its 2015-18 cycle, while the 20 Premier League clubs are feasting on the increase to £2.8 billion (€3.2 billion) each year during their 2016-19 bonanza. But then Uefa, which has concluded most of the territorial broadcasting deals for the Champions League’s next 2018-21 period, is projecting a very substantial increase itself, 49 per cent more than the current €1.345 billion, to €2.016 billion a season.

That highlights a key point missed by the idea the Premier League TV deals are diminishing the Champions League’s importance: the two are part of the same media phenomenon and increasing for the same reasons, of domestic and international appetite for elite European football. Uefa’s coffers have been boosted by BT’s payment of £1.2 billion (€1.4 million) for the 2018-21 exclusive rights, a 32 per cent increase on the price the UK’s telephone, broadband and broadcasting behemoth has paid to trundle its tanks on to BSkyB’s turf.

Consolation prize

The Europa League, in which Manchester United have reached the final this season, is more of a financial consolation prize than it once was. Liverpool, who made the final last year, losing 3-1 to Sevilla, banked €38 million from that journey and Manchester United will be clearing a similar sum this time. The TV income per season for the competition is also projected to increase for 2018-21, by 25 per cent, from €411 million to €504 million per season, shared around the 56 participating clubs.

Yet this remains a far lesser prize than qualification to compete with Europe’s topmost elite in the Champions League. Playing in that competition also means more income from the sellout matches themselves, from merchandising, and from sponsors – United made public the £22 million (€25 million) penalty clause from Adidas for failure to exhibit their kit brand on the European and global platform provided by Champions League participation.

These, as well as the imperatives of sporting competition and pride, are the cash reasons why City, Arsenal and Liverpool will be marshalling all their resources to try to secure the fourth and final qualifying place this weekend.

– (Guardian Service)