How Champions League Clubs Make Their Money

The UEFA Champions League Financial Distribution Model

By Alex Harvey and Daniel Geey

The brilliant Swiss Ramble has published an excellent, detailed analysis of the UEFA Champions League distribution model. We would strongly recommend reading the twitter thread in full, which you can find here. As we have done with previous Swiss Ramble threads, we thought it would be helpful to set out some of the key highlights from the analysis, along with some comments of our own.

UEFA as the distributor

As the governing body of European Football, UEFA is responsible for exploiting the commercial rights in the Champions League, the Europa League and the Super Cup. UEFA earns significant sums through collectively selling broadcasting rights[1], commercial rights and tickets/hospitality, and will then distribute those sums back to the participating teams using a complex financial distribution model. It is that distribution model which we will seek to unpick in this blog.  

The Champions League “Pot”

UEFA’s gross commercial revenue from the 2019/20 season is estimated to be around €3.25bn. Of that, €1.95bn will be distributed to clubs participation in the Champions League, with the remainder being used for administrative costs, solidarity payments and clubs participating in other UEFA competitions such as the Europa League.

Under the current UEFA financial distribution model, the €1.95bn is divided into four pillars:

  • 25% Participation (€488m)
  • 30% Performance (€585m)
  • 30% Co-efficient Ranking (€585m)
  • 15% TV Market Pool (€292m)

Participation (€488m)

All of the 32 clubs which qualified for the 2019/20 Champions League group stage will each receive €15.25m (i.e. €488m/32). This participation fee alone can represent a significant proportion of total revenue for clubs playing outside of the top 5 European leagues.

Performance (€585m)

During the group stage, €2.7m worth of performance bonuses will be paid out for each match. Where a team wins, they receive the full €2.7m (with the losing team receiving nothing). Where two teams draw, both teams receive €900,000 each and the remaining €900,000 is pooled and redistributed among all clubs playing in the group stage in amounts proportionate to their number of wins.

After the group stage, clubs receive additional performance bonuses depending on how far they get in the competition: Round of 16, €9.5m: Quarter-finals, €10.5m: Semi-finals, €12m: Finalist, €15m: Winners, €19m.

Swiss Ramble calculates that, after this year’s group stage, Bayern Munich have already earned €27.3m through performance bonuses alone. This consists of: (i) €16.2m for winning all 6 group stage games; (ii) €1.6m for their share of redistributed “draw” money; and (iii) €9.5m for reaching the last 16.

Co-Efficient Ranking (€585m)

30% of the Champions League pot is distributed to teams based on their position in the UEFA co-efficient ranking, which takes into account performances over a ten-year period.

The €585m is divided into ‘coefficient shares’, with each share worth €1.108m. The lowest-ranked team in this year’s competition, Slavia Prague, will receive €1.108m (representing 1 share) and the highest-ranked team, Real Madrid, will receive €35.46m (representing 32 shares).

TV Market Pool (€292m)

15% of the Champions League pot is distributed in accordance with the proportional value of each TV market represented by clubs taking part in the Champions League. Half of the amount representing the value of each market will be split among the clubs based on their performance in the previous domestic season. The other half will be paid in proportion to the number of matches played by each club in the current Champions League competition.

Swiss Ramble calculates that, in relation to the first half of the Market Pool only (ie. based on performances in the 18/19 domestic season), Man City have the highest Market Pool revenue of all clubs with €14m, followed closely by Liverpool with €10m; a reflection of the large sums that BT Sport pay for the broadcasting rights in the UK.

Swiss Ramble: Key Statistics

Following the completion of this season’s group stage, Swiss Ramble crunched the numbers and unearthed some fascinating findings:

  • English Clubs

Manchester City have the highest 2019/20 Champions League revenue to date amongst the English clubs with €78m. Close behind are Liverpool (€76m) and Chelsea (€73m), with Tottenham lagging behind on €58m.

Man City benefitted from significant performance bonuses totalling €23.2m after a group-stage which included four wins and two draws. As mentioned above, they have also earned a healthy €14m from the first half of the TV Market Pool due to their Premier League triumph last season.

In contrast, Tottenham had the least successful record of English clubs in the group stage (earning €19.3m), the lowest UEFA coefficient based on the last 10 years (earning €19.9m) and the smallest TV Market Pool after their 4th place finish in 2018/19 (earning €3.5m).

  • Highest Earners v Lowest Earners

The highest earners after this year’s group stage are Bayern Munich, who have already amassed a sizeable €82m. Slavia Prague are the lowest earners with a more modest €18m. So how are those numbers broken down?

The first point to remember is that both teams receive €15.25m as a participation fee simply for reaching the group stage. As stated above, Bayern Munich have earned an impressive €27m through performance bonuses. They are also third in the UEFA co-efficient behind only Real Madrid and Barcelona, earning them a further €33m, and have received €6m from the first half of the TV Market Pool.

Slavia Prague, by contrast, earned only €2m in performance bonuses after a group stage campaign which saw them lose four games and draw two. They are also the lowest-ranked team in the UEFA co-efficient, earning them €1.1m. Note, however, that information on their TV Market Pool earnings is not currently available.

  • The Atalanta Case Study

Atalanta are a fascinating case study. They have successfully qualified for the round of 16 after progressing through Group C ahead of Shakhtar Donetsk and Dinamo Zagreb. Despite this, their total revenue after the group stage is only €40m; half that of fellow Italian club Juventus (€80m), and less than five other clubs who actually failed to progress past the group stage (Benfica €51m, Ajax €46m, Shakhtar Donetsk €44m, Inter €41m and Zenit €41m).

The comparison with Inter is telling. Despite outperforming Inter in the performance bonuses (€16.3m v €6.8m) and the TV Market Pool (€5m v €2.5m), Atalanta have suffered due to their low UEFA co-efficient ranking (earning them only €3.3m) in comparison to Inter (€16.6m). It is clear that the distribution model, which includes a 30% pool based on the UEFA co-efficient ranking, advantages the traditionally larger clubs against up-and-coming teams such as Atalanta.

[1] UEFA’s 2017/18 Financial Report showed that 81% of its revenue came from broadcasting rights

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