October 21 – With the uncertainty surrounding club revenues in domestic leagues, particularly around match day revenue, clubs that have qualified for the UEFA Champions League will be grateful for the relative the financial stability that competition brings.
UEFA’s current prize money system guarantees €82.45 million for the winners of the tournament while clubs that drop out at the group stage still take home a fixed EUR 15.25 million starting fee. KPMG Football Benchmark points out that the significance of that massive windfall in its latest analysis, saying: “Such income would be more than half of the total annual revenue for a team like Hungarian champions Ferencváros in their past financial year.”
The threats to that income of the pandemic are obviously a complete shutdown of European travel and sporting activity – which looks unlikely though some games may have to be lost to localised covid outbreaks – and a repeat of the reduction of knockout round fixtures to single match play-offs. That would spark another renegotiation of broadcast and sponsor fees.
However the relative certain of the Champions League income is not spreading through the European football pyramid and KPMG Football Benchmark highlight its concentration within the bigger clubs, based on squad value.
“The past two seasons showed that all the clubs who advanced to the last 16 had higher overall squad values than those who could not qualify for the knockout stage. If this tendency prevails, the current squad values may predict the final outcome again, with Porto and Atalanta being the most likely teams able to overcome the odds this year,” said KPMG.
The 32 clubs competing in the group stages represent 15 countries and there are some new faces. This is the first season in which three Russian clubs will play in the group stage, while 26 teams qualified directly via their league position. Six teams – Ukraine’s Dynamo Kyiv, Hungary’s Ferencváros, Russia’s Krasnodar, Denmark’s Midtjylland, Greece’s Olympiacos and RB Salzburg from Austria – made it through the qualification rounds.
The Champions League guaranteed income will make a huge impact on their ability to trade through the current pandemics. But how much impact will they have in reality on the outcome of the competition?
“Some astonishing differences are apparent when looking at the 32 teams by squad value. In Group D, Liverpool’s squad is 25 times more valuable than Midtjylland’s team, while there is a 39-fold difference when Barcelona and Ferencváros are compared in Group G. The most balanced group in this regard is Group F, where Borussia Dortmund are only six times more valuable than Club Brugge,” says the KPMG analysis.
“The past two seasons showed that all the clubs who progressed to the last-16 from the group phase had higher overall squad values than those who could not qualify for the knockout stage – the only exception being Ajax in the 2018-19 season, when they progressed, despite having the 3rd most valuable squad in their group. If this tendency prevails, the current squad values may predict the final outcome of the group stage again, with Porto and Atalanta being the most likely teams able to overcome the odds this year.”
One conclusion from this, with all the talk of breakaway European Super Leagues and ‘big’ picture projects, is that perhaps the bog clubs are already having their cake and eating it. Is there really any more cake out there to satisfy their voracious appetities?
One thing is for sure, as Andrea Sartori, KPMG’s Global Head of Sports, points out, it is vital for these clubs that the Champions League completes its season to allow those revenues to be collected.
“Many football clubs are currently in dire straits, amid the decline and uncertainty of all revenue streams caused by the Covid-19 pandemic. Their matchday incomes are collapsing through the absence or limitation of stadium attendance. Certainty over future commercial and broadcasting revenues is also susceptible to the pandemic. Consequently, it would be pivotal for participating clubs to be able to complete the current UCL season ideally according to schedule, and secure those revenues on offer, even if with limited audiences allowed into stadia,” said Sartori.
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