Champions League Expansion Increases Teams and Prize Money

The UEFA Champions League, renowned for its blend of prestige and monetary allure, is set to undergo significant changes that promise to escalate its appeal and financial stakes.

by Faruk Imamovic
SHARE
Champions League Expansion Increases Teams and Prize Money
© Getty Images/Denis Doyle

The UEFA Champions League, renowned for its blend of prestige and monetary allure, is set to undergo significant changes that promise to escalate its appeal and financial stakes. Starting from the 2024-25 season, the Champions League will adopt a new format expanding its league phase to include 36 teams, a move projected to distribute an additional £372 million ($477 million) in prize money annually. This reformat not only intensifies the competition's charm but significantly boosts the financial incentives for participating clubs.

Currently, clubs such as Manchester City, Arsenal, and Liverpool have secured their spots in the next season, while others like Aston Villa are on the brink of qualifying. However, for teams like Manchester United, Newcastle United, Chelsea, and Tottenham, the financial implications of failing to qualify are severe, underscoring the high stakes of the competition.

Structural Changes and Financial Implications

Gone are the days of the traditional group stage format. The new structure replaces it with a singular, expansive league phase, leading to a substantial increase in the number of matches—from 125 to 189 starting next season. This surge not only promises more football action but also translates to higher revenues from broadcast rights and commercial deals. Such changes come at a critical time when the threat of a European Super League in 2021 spurred UEFA and the European Club Association to redesign the competition to appease the continent's football elite.

This expansion is not just about adding more games; it fundamentally alters how the financial pie is split. The revamped distribution model now places a heavier emphasis on match performance. Funds are allocated through three main streams: participation fees, performance-related payments, and a new 'value pillar', which considers the broadcasting rights value in a club’s country and their historical UEFA coefficient.

Revenue Distribution and Club Rankings

Under the new regime, 27.5% of the total revenue is evenly divided among all participating clubs, ensuring a fair share for each team's effort to qualify. Performance-based rewards have increased to 37.5%, rewarding clubs for each win or draw, and further bonuses are lined up for those advancing through various stages of the competition. The innovative 'value pillar' accounts for the remaining 35%, distributing funds based on a club’s market influence and competitive history, which could significantly benefit top-tier clubs like Manchester City and Real Madrid.

Dr. Dan Plumley, a sports finance expert, highlighted the competitive edge this structure offers to the big clubs, stating, “Sporting performance can go either way and there will be upsets, but with the way money is being distributed, it cements the competitive advantage held by the big clubs.”

The UEFA Champions League Trophy
The UEFA Champions League Trophy© Getty Images/David Ramos
 

Beyond the Pitch: Financial Prospects and Compliance

Maximizing Earnings Under Financial Fair Play

The sheer scale of potential earnings is staggering. Qualifying clubs are guaranteed a baseline amount, which increases with each stage advancement, potentially topping €161 million for those sweeping all their matches and dominating their market pool. These figures are pivotal, especially considering UEFA’s Financial Fair Play regulations, which cap club spending relative to their revenue. The 2024-25 season will see clubs restricted to spending only 80% of their revenue on salaries, transfers, and agent fees—a figure that will drop to 70% by the following season.

Clubs will need to balance their books either by boosting their revenue or cutting costs. The Champions League offers a viable path to revenue enhancement through additional matchday earnings, sponsorships, and broader commercial opportunities. “It’s an extra home matchday guaranteed. That’s not just tickets—it’s hospitality packages and sponsorship deals. More games mean more exposure. All that adds up,” Plumley adds, illustrating the financial dynamics at play.

Europa League and Conference League: Opportunities Abound

The financial benefits extend beyond the Champions League. The Europa League and the Europa Conference League also see substantial increases in their prize pots, providing lucrative opportunities for clubs participating in these tournaments. For example, West Ham United earned €22 million by winning the 2022-23 Europa Conference League.

In this shifting landscape, UEFA's tournaments are not just about the glory of victory but also about the substantial financial rewards that can bolster a club's economic stability and competitive future. As the Champions League evolves, it continues to promise not only top-tier football but also a financially rewarding endeavor for those clubs that navigate its challenges successfully.

Adjusting Club Strategies in Response to Financial Changes

The impending changes in the Champions League structure necessitate a recalibration of strategy for many clubs. The increased number of games and the enhanced financial rewards for performance encourage clubs to not only focus on securing a spot in the competition but also to optimize their squad depth and tactical approaches. This strategy shift is pivotal in ensuring that teams can withstand the rigors of a larger number of high-stakes matches while maximizing their earnings potential.

Clubs are now more incentivized to invest in their rosters, enhancing not only the quality but also the breadth of their squads. This approach is aimed at maintaining high performance levels throughout the extended season, which includes domestic leagues and multiple European competitions. For instance, a top-tier club like Liverpool, with a deep squad, can rotate players to manage fatigue and avoid injuries, thus maintaining a competitive edge across all fronts.

Champions League Uefa
SHARE