The Premier League giants are fighting for the financial boost of the Champions League

In about 10 weeks, the Premier League will crown a champion for the 2023 season. While fans will focus on winning the title, club owners are eyeing a different prize: finishing in the top four and securing a place in the UEFA Champions League, which promises millions of dollars in prize money and revenues from broadcasting.

“The Premier League’s distribution model for media rights is the most efficient in Europe,” said Kieron O’Connor, an expert in football finance. (O’Connor boasts more than 244,000 followers on Twitter, where he posts lengthy threads about the business of football @SwissRamble.)

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“The real difference in income for the leading clubs is in the European qualifiers,” he said, “especially the very lucrative Champions League.”

Qualifying for UEFA tournaments is more varied and complex than American audiences may be used to. Under normal circumstances, the top four teams in the Premier League qualify for the Champions League, Europe’s most prestigious competition, which pits the title holders from national leagues across the continent and includes other highly ranked teams from the major leagues, notably England, Spain, Italy and Germany.

The winner of the Champions League receives a prize money approaching 100 million dollars.

Meanwhile, England’s FA Cup and Carabao Cup winners, and the fifth-placed team in the Premier League, qualified for the UEFA Europa League — a step below the Champions League. It’s still an important competition, as the winner of the Europa League earns a place in next year’s Champions League competition, as well as more than $20 million in prize money.

This is where it gets complicated. If the FA Cup winner finishes in the Premier League’s top five, their place in the Europa League will go to the next highest-ranked team that has not qualified for UEFA competitions, according to EPL rules. And if a Premier League club wins the UEFA Champions League, they will automatically qualify for next season’s competition regardless of their position at the end of the league.

When they enter the Champions League, the four Premier League teams join 28 other teams from Europe’s 55 national football associations. They are divided into eight groups of four teams each, and the winners and eight runners-up continue to the knockout phase leading to the final. The number of teams each association enters into the league is based on UEFA coefficients, generated by the results of the clubs representing each association during the previous five CL and UEFA Europa League tournaments.

Regardless of the details, there are multiple potential routes to the Champions League, and if the team gets there, significant financial benefits await. In addition to the prize money for progressing through the tournament, there are payouts for the UEFA team coefficient and a share of the shared TV money.

Last year’s champions, Real Madrid FC, took home $90 million and an additional $5 million for winning the UEFA Super Cup in August. White people they have won the Champions League trophy 14 times, more than any other team in the history of the tournament, but theirs UEFA coefficient is still lower than FC Liverpool, FC Manchester City and FC Chelsea

“On top of that, the club would generate additional revenue from ticket sales and increased sponsorships associated with the performance,” O’Connor said. “In short, it’s a game changer.”

By comparison, winning the UEFA Europa League brings in $24.6 million (€23 million) in prize money. According to O’Connor’s calculations, Premier League teams competing in the Champions League last year earned an average of $104 million, compared to $30 million for EPL clubs in the Europa League.

Qualifying for the Champions League means bonuses from sponsors, but not qualifying could mean losing existing sponsorship dollars. Manchester United, the most valuable team in the Premier League according to Sportico’s latest evaluationhave clause in its contract with Adidas which allows the sponsor to reduce its annual payment by 30% if the team fails to qualify for two or more consecutive seasons. If the team does not qualify again this year, it could lose $26m (£22.5m) next year (one-third of its $90m contract). Manchester United have won the Champions League title three times in the past, but failed to qualify for the tournament last year.

Sponsorship dollars are not the only revenue at risk. “It’s worth noting that some of the financial pain of not qualifying could be mitigated by lower costs, as player wages include significant performance-related bonuses,” O’Connor said. “This is one of the reasons why Liverpool’s wages were so high last season, as they won two trophies and finished as runners-up in the other two competitions.”

In response to the failed Super League project, the Champions League format will change in 2024, with the number of teams competing in the tournament increasing from 32 to 36. UEFA will award four additional places to the countries whose clubs had the best results in European competition the previous season. Two places are reserved for the two countries with the highest coefficient score in the current season. “Therefore there is a reasonable chance that the Premier League will have five places, although it is not guaranteed,” O’Connor said.

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