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Manchester United and Tottenham are now almost certain not to take part in the remodelled 36-team Champions League which promises generation of more revenue streams.
The Champions League, Europe's most prestigious football competition, is set to undergo significant changes in the upcoming 2024-25 season.
With a forecasted increase in revenue and alterations to the distribution model, clubs are gearing up for a new era of financial opportunities and challenges.
UEFA's ambitious expansion plans for the Champions League will see the tournament adopt a 36-team league phase, opening doors for four additional clubs to participate.
This move not only promises heightened sporting excitement but also brings about a substantial financial windfall, with an estimated £372 million ($477 million) in extra prize money to be distributed annually.
The allure of the Champions League lies not only in its sporting prestige but also in the financial riches it offers.
The revamped format aims to capitalize on both aspects, with a focus on maximizing revenue through increased TV rights and commercial deals.
UEFA's proactive approach follows the threat of a European Super League in 2021, prompting a revised competition structure in 2022 to appease elite clubs and ensure the Champions League remains the pinnacle of European football.
The new distribution model reflects a shift towards rewarding on-pitch performances more prominently.
While the existing model divides revenues into participation fees, performance-related fees, coefficient calculations, and market pool allocations, the revamped system allocates a larger share based on sporting achievements.
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A significant portion of the revenue will now be distributed equally among all 36 participating clubs, with additional funds allocated based on performance and a new 'value pillar.'
The financial implications for participating clubs are substantial. Qualifying for the Champions League guarantees a base payment of €18.6 million, with additional earnings tied to performance incentives.
Each win in the league phase is estimated to bring in €2.1 million, while finishing higher in the league standings translates to increased rewards.
Clubs reaching the knockout stages stand to earn significant bonuses, with the winning team expected to receive substantial prize money of up to €161 million
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The last official UEFA numbers on record come from the 2022-23 season, when Manchester City’s first Champions League title returned them just under €135m.
Any English club, theoretically ranked in the top half of UEFA’s value pillar, will earn at least €70m if they were to progress automatically to the last 16 next season. And all for playing eight matches.
The bulk of revenue associated with Champions League qualification will come from UEFA but clubs can expect to make more than just the central distributions.
There is the guarantee of one extra home game, bringing in anything between £2m and £4m in matchday revenues. Liverpool, with Anfield’s capacity extended to 61,000, are sure to benefit from their Champions League return.
Then there are the kickers in commercial deals, that can typically see additional revenue paid on the back of reaching European football’s elite competition.
And, in this world of increasing financial scrutiny, it all comes in useful. Clubs playing in UEFA competitions next season will not be allowed to spend more than 80 per cent of revenue on wages, transfers and agents in 2024-25, a figure that will fall to 70 per cent by 2025-26.
The introduction of the 'value pillar' adds another dimension to revenue distribution, with clubs' rankings influenced by factors such as their UEFA coefficient and the value of broadcasters' rights in their country.
English clubs like Manchester City and Liverpool are poised to benefit from their strong European performances and market influence, while others, like Aston Villa, may see more modest returns.
The financial rewards extend beyond UEFA's distributions, with participating clubs expected to generate additional revenue from matchday earnings and commercial deals. The increased exposure from additional Champions League fixtures presents opportunities for clubs to enhance their revenue streams and comply with UEFA's financial regulations.
As clubs prepare for the revamped Champions League, the financial landscape of European football is poised for transformation.
With revenue projections reaching unprecedented levels, the competition for success on and off the pitch has never been more intense.
As clubs adapt to the evolving dynamics of the sport, the Champions League remains a coveted platform for sporting glory and financial prosperity.
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