Champions League still a financial and sporting lure for Premier League clubs

The idea that participation in Europe’s top club competition is less important to England’s top flight because of TV money dissolves on analysis

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 £5.1bn in 2013-16 to £8.4bn 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 €4bn over three years: €1.345bn 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.

Last season Manchester City, who reached the semi-finals in which they lost 1-0 on aggregate to Real Madrid, racked up €83.8m from Uefa. That total was made up of the basic €12m paid to all 32 qualifying clubs, a €6.4m performance bonus, €46.9m for the market pool, and the per-round payments: €5.5m for the last 16, €6m for the quarter-final and €7m for reaching the semi final. Even with City’s overall income rising again in 2015-16 to a club record £391m, 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% of that total. It was worth a very substantial further 61% of the £100m 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 €69m in the bank from Champions League TV money; Arsenal, who reached the same round where they lost 5-1 on aggregate to Barcelona, made €53m, while Manchester United, who under Louis van Gaal’s management failed to emerge from the group stage, nevertheless went home with €38m.

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 €1.345bn a season to its competing clubs during its 2015-18 cycle, while the 20 Premier League clubs are feasting on the increase to £2.8bn 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% more than the current €1.345bn, to €2.016bn 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 £1.2bn for the 2018-21 exclusive rights, a 32% increase on the price the UK’s telephone, broadband and broadcasting behemoth has paid to trundle its tanks on to BSkyB’s turf.

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 €38m 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%, from €411m to €504m 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 £22m 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.

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