It is not long since Michel Plantini criticised the finances of the English Premiership for distorting not only competitiveness within England but across Europe. It seems that the greatest source of these financial imbalances lies in the way UEFA itself allocates revenues especially between the UEFA Champion’s League and the UEFA Cup.

Most recent analysis of the power of England’s big four – Manchester United, Chelsea, Arsenal and Liverpool – has centred on their gate income especially for United and Arsenal and the Premier League TV revenues. It is clear that United and Arsenal with ground capacities over 70,000 and 60,000 have a massive edge over teams like Everton and Aston Villa – the teams coming 5^th and 6^th in 2008, but Liverpool have no such built in advantage – certainly not big enough to persuade Villa’s club captain to turn his back on the club. Prize money, TV cash home and overseas is significant with the club coming fourth earning up to £5M more than the team coming fifth – depending on cup runs, prize money, TV money and PPV.

But the real chasm occurs when the Champions’ League is compared with the UEFA Cup. The earning’s gap this year between Liverpool – in the Champions’ League – and Everton – in the UEFA Cup is an especially relevant comparison as they both had good runs in the respective competitions, come from the same City and have comparable ground capacities. Excluding gate income and any related revenues, Liverpool earned just under €27M or £22M, while Everton earned €0.5M or £390,000. The winners of the UEFA Cup – Zenit St Petersburg earned a million Euros less than lowest earning team in the Champion’s League. These gaps get greater when we look at finalists in the Champions’ League.

It is hard to be exact about how much winning the Champions’ League is worth, we’d estimate the minimum likely earnings for Manchester United at around £47M, while Chelsea would probably have earned around £41M. This is roughly in line with Simon Chadwick’s (Coventry University) estimate that in getting to the final, the two English Premier League sides each had already earned more than £40m, during their respective UEFA Champions League 2007/2008 campaigns. He estimates that total earnings for both clubs will be in excess of £115m

First Principles and components

The principles governing revenue distribution between the participating clubs are the same as last season. Half of the total amount is distributed as fixed sums, and the other half is distributed in accordance with the value of the commercial markets of the national associations involved. There are three main elements:

1. Fixed sums
2. Knockout bonuses
3. Market Value or “Pool” Premium

Fixed sums

Each club received a participation premium of €3m.

There is a surplus revenue premium based on the surplus generated over and above the expected revenue. Last year each club receives an extra €1m.

Each club also received €400,000 per group match played, totaling €2.4m per club.

Group victories were worth €600,000, and draws €300,000.

Knockout bonuses
The teams that reached the first knockout round received €2.2m each.

Another €2.5m was earned by each of the eight quarter-finalists.

The four semi-finalists each received €3m.

For winning the UEFA Champions’ League final, Manchester United received €7m.

Runners-up Chelsea FC received €4m.

The figures do not include income from match ticket sales.

Market value
Half of the prize money depended on the value of its national market, as well as the number of clubs per association, the positions in domestic championships in 2005/06 and the number of games they played in the 2006/07 UEFA Champions’ League.

On this basis, we’ve calculated the following for this year.

Manchester United Earnings – Winning Champions’ League

Chelsea Earnings – Losing Finalists

But this is not all, as the winner’s go on the FIFA Club World Championships and even the losers can expect income boosts across their key activities.

Other Earnings Post Final

All based on estimates e.g. from last years earnings and market power of clubs. These are earnings NOT profits

Club World Championship Winners Potential Earnings Dec 2008

FIFA Club World Championships – this year Japan, after which is open to bids to host. The fifth-place match, dropped for the 2007 edition, will be reintroduced for the 2008 edition. The reintroduction of the match for fifth place prompted an increase in prize money by USD $500,000 to a total of USD $16.5 million. The winners will take away $5 million, second-placed team receives $4 million, the third-placed team $2.5 million, the fourth-placed team $2 million, the fifth-placed team $1.5 million, the sixth-placed team $1 million and the seventh-placed team will receive $500,000.^[3]

Little wonder that Clubs like Villa and Tottenham – despite their upwards progress - cannot hold onto club captains and leading goal scorers despite reaching Europe, when the “big four” come calling.

The solution, however, may lie not in clubs putting themselves further in debt, but in Michel Platini tackling the problems his organisation is creating.

Filed under: Football Finances by admin