The Champions League: A promised land for clubs both on and off the pitch

Insights

Author: Jason Traub

Posted: 02.09.19

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The Champions League is considered the pinnacle of European football competition. Perhaps only the World Cup has a more mythical and revered aura surrounding it within the sport.

It is a tournament soaked in history, dating back to the original edition of the competition, when it was known as the European Champion Clubs’ Cup. From Real Madrid’s di Stefano-inspired domination in the late fifties to Manchester United’s Busby Babes and their tragic end in 1958. Celtic’s Lisbon Lions to Ajax’s Total Football revolution of the early seventies. The unlikely lads of Brian Clough’s Nottingham Forest to Ole Gunnar Solskjaer’s last minute winner in 1999. These highlights set this tournament apart.

The modern-day iteration of the Champions League is a competition that not only promises glory on the pitch, but it can also transform the fortunes of clubs off it.

Since the European Champions Cup evolved into the Champions League in 1993, the commercial and marketing prospects of the competition have grown beyond recognition. Today, the competition is screened in over 200 countries, with a reported 165 million people tuning in to watch the final.

With total prize money of €1.9bn allocated by UEFA, the perfect storm of success on the field, combined with broadcasting revenue and sponsorship deals can earn the biggest clubs upwards of €80m.

Teams are eligible to receive a financial windfall just by reaching the group stage. The 32 teams which have gone into the hat for the group stage draw have already pocketed €15.25m. It doesn’t end there. Each win at this stage will bank a club €2.7m, whilst a draw will reward them with €900,000. That’s before they add revenue from sponsorship and broadcasting rights.

For certain clubs, namely those without a wealthy backer or those who do not enjoy the good fortune of being part of a cash-rich domestic league, the group stage is the promised land! The prize money earned from those six games can make the difference between posting a profit or loss in the next financial year, or to retaining or selling their star players the following summer.

Many teams pin their hopes on making it to the group stage. Take Celtic for example. Season after season, they win their domestic league at a canter. As winning the league can be a given, a ‘successful’ season for the manager, board and supporters alike rests on qualification to the Champions League group stage.

Earlier this month, they lost to CFR Cluj of Romania in the third qualifying round and were denied entry to this season’s tournament proper. The financial hit for being eliminated at this stage is an estimated €44m, when additional revenue, after prize money is taken into account.

The consolation is a second chance to play European football in the Europa League. On paper the Europa League is a more realistic opportunity to compete for European silverware. Celtic should make it to the later stages of the competition. However, prize money for clubs reaching the group stage is €2.9m, with group winners receiving an additional €1m. Such sums pale into insignificance when compared to the riches of the Champions League. A combined €32m is guaranteed for reaching the Champions’ League semi-final, with a further €15m for reaching the final.

In May 2018, Liverpool made it to the Champions League final, where they were defeated by Real Madrid in Kiev. Despite that, the success of reaching the final contributed to a £125m pre-tax profit later that year; a world-record for a football club.

This season Liverpool went one better, beating Spurs in Baku earlier in May to lift their sixth Champions League trophy, only adding to their financial success. These financial rewards have helped to create a spectacle, watched by hundreds of millions of people around the globe, but at what cost to lower ranking clubs?

The Champions League was launched as a tournament that pitted the champions of European domestic leagues against one another. To a certain extent the direction the tournament has taken in recent seasons has been influenced by the vast amounts of money circulating in football today. More and more, we are seeing signs from UEFA that they want participation in the competition to be rewarded based on club stature, not sporting performance across the continent.

UEFA has been accused of showing preference to the largest clubs in Europe’s biggest leagues by guaranteeing an automatic group stage place for clubs finishing in the top 4 in England, Spain, Italy and Germany. This is at the expense of winners in ‘smaller’ leagues across Europe.

To put that into context, Valencia, fourth-placed finishers in La Liga last season, received a group stage pass in this year’s competition over BSC Young Boys, Swiss Super League winners, who were forced to enter at the Play-off round.

The two finalists in this year’s competition, Tottenham Hotspur and Liverpool, were not champions in their domestic league. They finished 3rd and 4th respectively during the 2017/18 Premier League to qualify for the Champions League. In fact, only one winner of the Champions League from the past five seasons were champions of their domestic league.

Gone are the days when domestic giants outside of the major European leagues such as Celtic, Ajax or Red Star Belgrade can rise-up and be crowned Kings of Europe. Whilst they haven’t given up trying, it remains harder than ever to reach the final stages of the competition

The amount of money flowing through the game has created a financial gulf between Europe’s biggest clubs and the remaining teams on the continent. These riches enable elite sides to hand-pick leading players from smaller clubs, promoting sporting performance. Those clubs which progress to the group stage and beyond will make significant financial gain – a reward, that to some is more valued than sporting success.

(All sums and figures discussed in the article are sourced from UEFA and EUFA)

Tags: Football, Champions League

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