Is Qualifying for European Football Beneficial For All Clubs?

Players want to play in it, clubs want to qualify for it. The UEFA Champions League. The most prestigious club competition and one that comes with a major financial windfall. 2021/22 champions Real Madrid received €133.7 million from UEFA for their successful run. Only a quarter less than what the 30th highest-revenue generating club, Southampton, made in total revenue (€177.7 million) during 2022.

The increase in income and the prestige of European club football, cause that qualifying for the Europa League and the Conference League is met with the same excitement by smaller (league) clubs and their fans.

However, the question is whether it is always a positive to qualify for European club competitions? What are really the advantages of securing European football? And what are the disadvantages, usually overlooked?

Advantages of qualifying for European football

Qualifying for European football has at least the following three advantages: extra revenue, prestige of playing at the highest stage and the ability to attract higher profile players.

Higher revenue comes from the revenue UEFA distributes amongst European clubs. In addition, clubs will play more matches and thus can earn more matchday revenue. There is also the aspect of sponsorship deals that stipulate higher payments in case a club qualifies for European football. This is mostly the case for regulars of the Champions League.

For example, had Manchester United failed to qualify for the Champions League for a second consecutive season, they would have lost 30 percent of some of their most important sponsorship deals. Liverpool has a similar clause in their Nike contract.

€2.732 billion distributed by UEFA to participating clubs

The money clubs receive from UEFA for participating in one of the European club competitions vary widely. UEFA estimated the gross revenue from the various club competitions (Champions League, Europa League, Conference League, and Super Cup) to be €3.5 billion for the 2022/23 season.

After deducting such costs as administrative costs, payments to non-participating clubs and allocation to the Women’s Champions League, €2.732 billion (78 percent) remains to be distributed to clubs participating in the tournaments. Due to COVID-19 adjustments and market changes, UEFA can only note the exacts amounts in hindsight.

UEFA payments per European competition in 2022/23

For the 2022/23 campaign, almost three quarters of the total amount to be distributed, was reserved for the 32 clubs participating in the Champions League. Making up a total of €1,994 million. A further €30 million went to the six losing teams of the Champions League play-off round.

The purse for the Europa League was set at €465 million. 17 percent of the total money distributed and just 23 percent of what is reserved for the Champions League. While €235 million (8.6 percent of the total) was the projected amount for Conference League clubs.

The Champions League and Europa League winners also divide €8 million (€4.5 million for the winner) between them by participating in the Super Cup.

Major differences between the three European tiers

There are thus major differences between the European club competitions in the total amounts to be distributed. Understandable, when observing the difference in popularity between the Champions League, the Europa League, and the Conference League, that so far has only staged two editions.

The Champions League also generates the most revenue from the sale of media and commercial rights. Together with the Super Cup, the top-tier competition generated €3,087 million in media and commercial rights revenue for UEFA in 2021/22. While the Europa League and Conference League only generated 15 percent of that with €467 million.

Media and commercial rights revenue from European competitions in 2021/22

This means that UEFA generated 87 percent of their media and commercial rights revenue from European club football from the Champions League / Super Cup in 2021/22. However, when distributing money between these four competitions, participants of the Champions League / Super Cup received 74 percent. A smaller portion than the two competitions generated together. This is in line with other strategies for money redistribution by UEFA. The gap between the different competitions could thus have even been larger.

Starting fee and performance related amounts

The amounts clubs receive from UEFA is based on four factors. First, clubs receive a starting fee for entering the group stage. For the Champions League this amounted to €15.64 million per team in 2022/23. For the Europa League and Conference League this was respectively €3.63 million and €2.94 million. For the Champions League and Europa League, the starting fee pool is 25 percent of the total money distributed, while it is 40 percent for the Conference League.

The second part comes from performance related fixed amounts. For the Champions League (€600.6 million, including €8 million for the Super Cup) and Europa League (€139.5 million) this amounts to 30 percent of the total amount distributed. While this is €94 million, or 40 percent of the total, for the Conference League.

Clubs receive money for every group stage win and draw and the round they reach during the knock-out stages. For example, in the 2022/23 Champions League group stage, clubs received €2.8 million per win and €930,000 per draw. A win in the Europa League group stage was worth €630,000 while it generated half a million euros in Europe’s third tier competition.

Performance related payments per European competition in 2022/23

During the 2022/23 Champions League, Bayern Munich was the only team to win all their group matches. In prize money alone the German club had already racked up over €42 million at the end of the group stage (not considering possible adjustments). They received €15.64 million as starters fee, plus six times €2.8 million for the matches they won and €9.6 million for qualifying for the round of 16.

Rangers and Viktoria Plzen lost all their group stage matches and thus received only the group stage fee of €15.64 million based on their on-field performance. Which is 37 percent of the maximum amount a team could generate during the group stage.

Coefficient-based amounts and market pool

In addition to the starting and performance related fees, clubs receive a sum based on a coefficient ranking determined by the club’s performance over a ten-year period. Clubs who consistently qualify for European football and do well, like a Manchester City and Real Madrid over the last decade, will have a higher coefficient and are thus entitled to more income.

The lowest ranked team gets one share, while the highest ranked team receives 32 shares. During the 2022/23 season, the lowest ranked team in the Champions League received €1.137 million, while the highest ranked team received 32 times as much with €36.38 million. For the Europa League one share equalled €132,000, while this amounted to €44,500 in the Conference League.

The final part received is based on the market pool. An amount that is determined by the proportional value of a country’s TV market and the participating clubs. In 2022/23 the Champions League had an expected market pool of €300.3 million. More than double the €139.5 million of the Europa League. While the Conference League market pool was set at €23.5 million.

Different basis of distribution for competitions

Apart from the major differences in amounts distributed, there is thus also a difference in the basis of distribution. In the Champions League, the performance over a ten-year period (i.e., coefficient) is relatively more important than it is in the Europa League. While 80 percent of the Conference League’s budget is distributed based on starting fees and performances. Relatively less importance is given to previous European results. Which may be due to many Conference League clubs having had few to no appearances in European football over the last decade.

There is also a major gap between the amounts the winners of the different competitions receive. With €133.7 million, 2021/22 Champions League winner Real Madrid earned 3.5 times more than 2021/22 Europa League winner Eintracht Frankfurt (€38 million). The German club, in turn, earned almost twice as much as inaugural Conference League winner AS Roma (€19.2 million).

Payment received after 2021/22 European campaign

For Eintracht Frankfurt the €38 million received from their successful Europa League campaign was 18 percent of the €208.3 million in revenue the club generated in 2022. And although Real Madrid earned far more, the income from their successful 2021/22 Champions League campaign was around 19 percent of their 2022 revenue.

The basis of distribution also causes differences between clubs within the same competition. During the 2021/22 Champions League campaign, Sheriff received the least amount of money from UEFA. The Moldovan champions finished third in their group after starting their campaign in the first qualifying round and racked up €23.7 million in revenue. Just 18 percent of Real Madrid’s Champions League income. Yet, still more than Conference League champions AS Roma

Longer European journeys for smaller nations and financial boost

One of the reasons UEFA launched the Conference League is to have more clubs play European football. It is also makes a ‘prolonged European campaign a realistic ambition for champions of smaller nations’.

For example, Icelandic champions Víkingur started their 2022/23 campaign on June 21, 2022, in the preliminary round. The club won two matches to qualify for the first qualifying round of the Champions League, a tie they lost to Malmö in the beginning of July. Then they won the second qualifying round of the Conference League at the end of July, before losing in the third qualifying round in the first half of August. Eight matches played and the club earned a total of €1.21 million in prize money. An amount equivalent to 50 percent of Víkingur’s annual budget.

It shows, that while there are major differences between the amounts received by clubs stranding in qualifying and those that go on to lift the trophy, many clubs receive a financial boost from European football. For Víkingur it was half of their annual budget. For Eintracht and Real it made up around a fifth of their annual revenue. And while Sheriff received the least amongst the 2021/22 Champions League participants, €23.7 million was still a lot after surviving four qualifying rounds.

Non-financial advantages of European football

Apart from the financial boost qualifying for European football can give, it is also positive for a club’s image and its place in football history. Several European clubs have been bought by wealthy individuals and consortia with the aim of one day winning the Champions League. For Sheikh Mansour this dream finally came true when Manchester City won the 2022/23 Champions League.

For other clubs, the focus lies on consistently qualifying for the Champions League, either the group stage or a certain knock-out round. As consistency leads to higher income streams in the future as well. For others, European competitions, especially the Conference League, gives them the opportunity to win a European price. West Ham won just their second major European price by beating Fiorentina 2-1 in the 2022/23 Conference League final (their first was the European Cup Winners’ Cup in 1964/65).

Qualifying for European football also results in clubs becoming more attractive to (high-profile) players. Especially when qualifying for the Champions League, because it gives players the opportunity to shine on the biggest stage against the best players.

Higher revenue, higher costs

European football thus brings excitement to clubs’ stakeholders, boosts the financials, and attracts higher profile players. However, there are also disadvantages. And the question is whether the advantages always outweigh these.

For starters, European football may allow clubs to attract higher profile players, but this also comes with a price. Clubs will have higher wage costs. Most player salaries are performance dependent. So, clubs’ wage costs are higher when they qualify for the Champions League (or another European competition). It also increases as the team performs well on the European stage.

For example, Manchester United notes in their financial reports how players wages are reduced if Champions League football is not secured. Most of their contracts are said to stipulate a 25 percent wage reduction in such a scenario, although there are differences between contracts and there are players who have inserted a total reduction cap. This means that United had a lower wage bill during the 2022/23 season (not considering player turnover) than during their 2021/22 campaign when they played in the Champions League. Their 2023/24 wage bill will rise again after they secured Champions League football.

Performance bonusses

Apart from these higher fixed wage costs, there are also bonusses stipulated in contracts. Champions League champions Manchester City supposedly paid out over £20 million in bonusses after winning the 2022/23 Champions League. While Real Madrid’s bonusses for winning the 2021/22 Champions League, La Liga and Spanish Supercopa amounted to €900,000 per player.

West Ham, however, did not pay any bonusses to players for winning the 2022/23 Conference League, as this was not stipulated in their contracts. This is rare though. Generally, while revenue increases as a club qualifies for and performs well in Europe, so does the wage bill through higher fixed salaries and bonusses.

Investing in quality and quantity

These higher costs do not only come from players already under contract. European football requires investments in players. Both in quality and quantity. Quality, because better players give a club a better chance of performing well in Europe.

At the same time quantity, because European football will stretch a squad. Qualifying for the group stage means at least an extra six matches, including three abroad. Of the 33 teams from the Big Five leagues that qualified for European football in 2022/23, 31 played at least eight European matches.

Only Atlético Madrid and Marseille were knocked-out after six matches. Fiorentina racked up the most matches in Europe with 17. The Italian side reached the final of the Conference League after starting their campaign with a qualifying round on August 18.

Top 3 clubs with the most European matches in 2022/23

These 33 sides played on average almost 52 games during the 2022/23 season. The German teams played on average the least number of games (47) and at most 49. This is caused by the Bundesliga being the only Big Five league with just 18 teams and thus only 34 league matches. While the Premier League (two domestic cups) and the Serie A (successful European campaigns) teams played on average 54 matches.

Four sides played over 60 matches in 2022/23

Four Big Five league sides playing in Europe played at least 60 matches during the 2022/23 season. Manchester United played 62 matches as the Red Devils went far in all cup competitions. City-rivals Manchester City played 61 matches during their treble-winning season. Spanish giants Real Madrid also reached 61 matches, including Club World Cup (two), UEFA Supercup and Spanish Supercopa (two) matches. While Fiorentina played 60 matches.

Playing so many matches, puts a strain on the players and staff. Especially when the football calendar is already getting more congested. Real Madrid and the two Manchester sides will all have the financials to establish a squad that is sufficient in quality and quantity to deal with this. After all, they often play a high number of games per season. City’s lowest number of matches during the last five seasons was 58 in 2021/22. While Real Madrid played at least 51 matches per season since 2018/19.

Fiorentina went from 40+ matches to 60

For Fiorentina, and clubs like them, it is probably more difficult to deal with such a high number of matches. The Italian side finished their season with a loss in the Conference League final, 10 months after their first match in the competition. While they also reached the final of the Copa Italia, in which they lost to Inter 1-2.

They played a total of 60 matches in 2022/23, the fourth most of Big Five league sides to play in Europe.

A major difference with the four seasons prior, in which Fiorentina played between 41 and 44 matches. So, they played at least 16 matches more in their successful 2022/23 season. This could of course have played a role at the end of the season when they not only lost two finals, but they also came in eighth in the Serie A. One place lower than the year before, and a position that does not come with a European ticket.

European champion, but subpar in the domestic league

Of the 33 Big Five league clubs in Europe in 2022/23, Fiorentina was not the only one not to qualify for a 2023/24 European competition through the league. 8 teams, 24 percent, failed to do so. Europa League champions Sevilla and Conference League champions West Ham also missed out on a European ticket through their domestic leagues.

However, despite a 12th and 14th place respectively, both will play in Europe next season. This is because the champions of the Europa League and Champions League automatically qualify for the Champions League the following season, irrespective of their domestic results, since 2014/15.

Before the 2017/18 season this was a Champions League play-off berth for Europa League winners, but it has become a spot in the group stage since. For the Conference League winners there is a place in the Europa League group stage.

Use of the champion-bonus

Since its introduction, this ‘bonus’ has come into effect several times. Sevilla (2014/15 and 2015/16 champion) and Manchester United (2016/17 champion) qualified for European football through their respective leagues, but not for the Champions league. By winning the Europa League their European ticket for the following season got upgraded.

While the last three champions of the Europa League – Sevilla, Eintracht Frankfurt, and Villarreal – all failed to qualify for European football through their league position but qualified as champions.

European champions performing subpar in their domestic league since 2014/15

During the last decade several European champions (Europa and Conference League) have thus qualified based on their European results, as their performance domestically was subpar. This suggests that going far in European competitions, especially in the Europa League and Conference League, could impact performance in the national league. Clubs who are ‘smaller’ and financially slightly less powerful seem to have a harder time performing in all competitions.

Increase in European matches from 2024/25

From 2024/25 onwards clubs will play even more (European) matches. The group stage of the three European club competitions will change into a Swiss league model. It means that instead of six matches, every club will play at least eight matches. Moreover, two third of the teams will play at least 10 matches. The increase in number of matches, means more strain on players. And while the biggest clubs can navigate these issues by investing in a bigger squad, smaller teams will have to stretch their resource even further. Or maybe even prioritise one competition over the other sooner than they do now.

There is thus a big difference between the benefits and costs of European football and between clubs. The Champions League clubs, often the same ones, get the best financial rewards. Smaller (league) clubs earn a lot relative to their budget, but the cost for them is probably higher as well with a possible impact on domestic results. Overall, it seems though that the benefits outweigh the costs for most clubs. Not least because of all the excitement European football brings to the club, the players, and the fans.