UEFA's proposed Champions League revenue sharing model threatens European football structure
According to reports, UEFA is planning to change the revenue sharing model in 2018 to benefit clubs that have historically done well in the Champions League. The new model will see clubs that have won more titles rewarded with a bigger slice of the pie when part of the TV revenue is distributed to all the clubs taking part in the competition.
The Champions League has always been the most prestigious competition in Europe. But these changes could soon see many clubs breaking away to form a Super League. On the other hand, this seems like a move by UEFA to ensure that the big clubs actually stay in the Champions League.
Points based on titles won could improve clubs’ coefficients
Last season saw Manchester City earning the most from TV revenue after they reached the semi-finals of the competition for the first time in the club’s history. The club earned approximately £63m in performance and television revenue combined.
But the new rule is expected to favour previous winners. EPL clubs such as City and Arsenal could get affected while their domestic rivals such as Manchester United and Liverpool could profit from the new rules – provided they qualify for the Champions League.
The new rules proposed were built on the foundation that it was these big clubs that helped make the Champions League what it is today and hence deserved a larger share of the profits. In retaliation, the European Professional Football Leagues is ready to hit back by scheduling domestic games on Champions League nights – something that was not allowed to ensure that the Champions League grabbed all the eyeballs on midweek nights.
“A major change in European football has been announced without the support and consensus of the organisers of domestic league football in Europe.
“This decision will have a detrimental impact on domestic competitions and will lead to an exponential growth in the financial and sporting gap between the biggest clubs in Europe and all the others.” – EPFL statement.
According to The Times, UEFA will award points to various clubs based on their previous title wins. A club would get 15 points for Champions League titles won in the last five years, 10 points for any other trophies since 1992 (when the Champions League was formed) and five points for any European Cups won prior to that.
These points would see clubs like Liverpool and United have a higher UEFA coefficient and give them a higher seeding while simultaneously getting more revenue.
Another rule that could be changed involves the revenue sharing based on results rather than each member association’s individual deal. There is no question that English clubs command a higher revenue thanks to the massive television deals signed with broadcasters.
It was one of the key factors that allowed City to take home the maximum TV revenue from the Champions League even though they lost to eventual winners Real in the semis. And it is something many have deemed unfair.
Indeed, European Clubs Association (ECA) chairman Karl-Heinz Rummenigge had said: “That was not fair and it has been corrected.”
More: Does Europe need a Super League to replace the Champions League?
La Liga and Serie A clubs may break away from UEFA for extra revenue
While ideas of a European Super League do the rounds, Spanish and Italian clubs are in a position to seriously consider joining a breakaway league to increase their revenue from broadcasting deals.
UEFA has already guaranteed the top four teams in England, Spain, Germany and Italy (the top four leagues in UEFA’s coefficient rankings) a spot in the Champions League from the 2018/19 season onwards. This ensures that teams who finish fourth will no longer have to play a qualifier (two extra games) to qualify for the group stage and half of the 32 spots will be given to these four countries.
This was met with heavy opposition from other members, especially France’s Ligue 1, in particular, who felt they were not consulted before a decision was made. But this, too, may not help UEFA in the long run.
Chinese Billionaire Wang Jianlin’s Dalian Wanda Group has already made proposals for a new league and clubs in Spain and Italy have taken note. The Premier League TV deal worth more than £5 billion easily eclipses the revenue from the Champions League. So much so that all the top 10 teams in the Premier League last season earned more money than Real Madrid did by winning their 11th crown.
Javier Tebas, the president of Liga de Fútbol Profesional (LFP) that runs La Liga had confirmed the same in an interview with The Financial Times.
“If [European club competition] is reorganised as Wanda has set out, there is a greater opportunity to generate more revenue from audiovisual broadcasting.
“We’ve also become more interested in [Wanda’s] proposal since UEFA announced they will be reforming [the Champions League format], without seriously consulting - in detail - their broader reform plans with the other national leagues.”
While the Chinese group have explicitly denied any such breakaway league, they did acknowledge that they were looking at options to “further develop sport and business”.
What’s in store for European Football?
At the moment, some of the proposals designed by UEFA have not been set in stone. Most of their ideas have only been agreed in principle and it is not clear how much of the revenue will be distributed to the various clubs taking part.
Ultimately, it all boils down to money and clubs will look at that as a serious factor before taking the next step. While the top clubs are relatively safe no matter which direction European football takes, it is the lesser clubs that could struggle in the long run.
The ever-changing rules seem to be a way for UEFA to placate the top clubs as it is they who make the Champions League an exciting offering. There is no doubt that most of the group stage games have been drab affairs in recent years and interest in the competition does not really pick up until the Round of 16 gets underway in February.
These new rules also make it increasingly tougher for smaller clubs to compete. As it stands, they only exist in the competition to make up the numbers with the occasional qualification for the knockout stages thanks to a favourable group stage draw or top clubs imploding in the group stages. Thinning the herd is only a matter of time and only the strongest survive.
In the end, the top clubs will have a say in the direction of European football. Just as they did when the Premier League was formed in 1992.