How much would Champions League exits cost English clubs?

There is €19.3 million more in prize money on offer to the eventual winner but TV revenues are already allocated and Italian teams pose little threat on Uefa coefficients

By George Ankers

Tuesday sees the beginning of what could be a humbling fortnight for the Premier League clubs. Arsenal, Manchester City and Manchester United teeter on the brink of elimination from the Champions League, while only Chelsea are favourites to progress from the round of 16.

As always happens when teams from one country underperform simultaneously, the debate has begun over whether English clubs are falling behind in quality compared to the rest of Europe’s big hitters. Is there a risk of a more serious decline?

The Champions League is the most lucrative club competition in the world. In 2012-13, a total of €904.6 million of revenue, comprising prize money and TV fees, was distributed by Uefa across the 32 sides who reached the group stage. Those who stay in get richer and those who fall out can struggle to get back in – just ask Liverpool how much effort it takes.



The concern potentially goes beyond just the four clubs involved, however. Entry to the tournament is based on Uefa’s coefficient ranking for all member countries. England has long been in the top three on the continent, thereby granted four places for Premier League qualifiers each season, but these rankings are based on performances – if all four English clubs were to go out now, would the country be at risk of dropping back down to three qualifiers?

The good news for Premier League clubs is that such an eventuality is a long way away. England is currently second in the coefficient rankings, 2.536 points above third-placed Germany, with Italy some distance behind on 64.938.

With the coefficient based on performances over the past five seasons from both the Champions League and Europa League to determine entry into both, recent history is very much on England’s side. Chelsea’s triumphs in both competitions in 2011-12 and 2012-13, plus the relatively regular progression of Premier League teams to the middle-to-late knockout rounds of the Champions League, have created a sizeable gap.

Italy, by contrast, endured some particularly poor years in 2010-11 and 2011-12, which will both continue to count against them for the immediate future. Each of those campaigns saw only one Serie A club in the Champions League quarter-finals (where they were eliminated), two ousted in the last 16 and one falling at the play-off for entry to the groups. In the same period, Italy only had three qualifications from the Europa League groups and even saw Roma knocked out by Slovan Bratislava in a play-off.

In the worst-case scenario for England this season, all five of its clubs (four in the Champions League plus Tottenham) would exit Europe in March. Meanwhile, AC Milan would recover from a 1-0 first-leg deficit against Atletico Madrid to improbably win the Champions League. After one of Juventus and Fiorentina eliminated the other in their Europa League last-32 tie, they would go on to face Napoli in the final.

At the end of such a season, England would still have a lead of 8.653 coefficient points. Even if exactly the same season kept repeating itself every year from now onwards, Serie A would need two further years to usurp the Premier League. Given that such a scenario would require Italian teams to suddenly and consistently do much better in Europe than they have of late, any worries about a long-term shift can be safely forgotten for at least the next couple of years.

The more immediate concerns, however, are – as is always the case in football now – financial. Would Champions League exits now cause much lost sleep in England?

The truth is that there would be a hit – but not a huge one. While broadcasting revenue from participation in the Champions League is indeed significant, teams need only reach the group stages to get their share.

This is listed by Uefa in its breakdown of revenue as the ‘market pool’ and, while some clubs earn more from it than others, it is not necessarily the biggest club or the best-performing who get the biggest share. The fees are allocated depending on how valuable the TV market is in that country – while Arsenal earned €15.8m (£13.1m) from it in 2012-13, Montpellier (who performed worse in the same group) took home €22.8m (£18.9m).

Having qualified but then been eliminated in the last 16, the Gunners earned €15.6m (£12.9m) in prize money that year, while Manchester City and Chelsea were both knocked out in the groups and took home €10.1m (£8.4m) and €12.1m (£10m) respectively. However, they picked up €18.7m (£15.5m) each from the market pool. Simply turning up can be more lucrative than reaching the knockouts but no further.

However, the market pool only accounts for 45.3 per cent of the total revenue on offer in 2012-13; prize money does add up. Winning four and drawing one group game on their way to winning the final saw Bayern Munich make €35.9m in prizes. At this point, then, with the market pool allocated, how much more is on offer for the remaining English clubs?

The answer is €19.3m. If – taking the likeliest-looking candidate as an example – Chelsea finish off Galatasaray, they would earn €3.9m then €4.9m for reaching the quarter and semi-finals, before contesting the final for a €10.5m jackpot. The runner-up is awarded €6.5m. Were all four to stage miraculous recoveries and go on to share all four semi-final places, they would between them bring €26.7m more into the English game.

The potential €19m left to claim is, then, a significant sum but not one likely to make or break any of the four gigantic commercial entities involved.

If anyone might suffer most from its loss, it would be Manchester United. The Red Devils look extremely unlikely to qualify for next season’s Champions League and so will be seeing none of that revenue in 2014-15 – perhaps for even longer, should they continue to struggle under David Moyes.

However, in the short term, all four teams have already banked over 60% of their potential earnings from a Champions League run just by reaching this point. It represents a healthy financial baseline for Premier League achievement, even if on-pitch performances can be the subject of debate. While four eliminations now would represent a disappointment, it is by no means a crisis point for England in Europe.

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