UEFA Champions League: The rich get richer and the poor get …

October 13, 2020

Next week, the first round of the UEFA Champions League group stage of the 2020-2021 season will be played. And for the first time since the autumn of 2013 with a Danish club – FC Midtjylland – among the 32 clubs, which are divided into 8 groups. 47 clubs from 40 nations in Europe did not manage to qualify for the group stage and thus have to wait another year to get through the “needle eye” to the at least DKK 225 million, which goes to all 32 clubs from 14 nations in the CL group stage.

FCM is a debutant in the CL group stage

FCM’s ranking as No. 102 on UEFA’s rankings indicates that the club’s qualification for the CL group stage and not least the accompanying capital injection is definitely not “everyday life” for the ambitious club from Herning-Ikast, which so recently 7 years ago was stumbling close to financial bankruptcy. The English rich man Matthew Benham, who is also the owner of the English Championship club Brentford F.C., at that time bought the majority of the club’s shares and thereby secured it financially. Subsequently, FCM with three Danish championships, one silver and two bronze medals and a cup title of 6 seasons has taken over FCK’s dominance in Danish football. The coming months and years will show whether FCM can also perform on the biggest international football scene: the UEFA Champions League.

Economic capital concentration in the major leagues

The cash flow in the UEFA Champions League is gigantic, according to the latest annual report from the international accounting and analysis company Deloitte. The total turnover in European football is almost DKK 220 billion and constitutes more than 80% of the turnover for all sports in Europe. And almost 2/3 of the turnover in European football is within the five biggest leagues: Premier League (England), La Liga (Spain), Bundesliga (Germany), Serie A (Italy) and Ligue 1 (France). The economic concentration in the major leagues has only gone one way since the turn of the millennium: Upwards. The economic growth is primarily due to astronomical TV contracts, both in relation to the national leagues and the two European club tournaments: Champions League (CL) and Europa League (EL).

Sale of TV rights = the financial success of club football

UEFA sells the television rights to the Champions League on multi-year contracts to a number of different broadcasters, which broadcast the matches on Tuesdays and Wednesdays in one or more countries. The individual CL matches are included in different packages, where some matches are “free”, while others are “pay-per-view” matches. The broadcasters also trade the rights between each other across national borders. The sale of television rights to the Champions League makes up the vast majority of UEFA’s total revenue. And these have almost doubled over the past 5 years, namely from DKK 11 billion in 2014 to DKK 21 billion in 2019. On the other hand, the financial turnover on match days from spectators, both nationally and internationally, makes up only 10-15% of the total turnover. The all-important reason why last season’s Champions League and Europa League were settled over one match, without spectators and within a few days from the quarter-finals until the final was not sporting, but purely financial. The substantial contributions to UEFA and the individual European top clubs from TV contracts and exposure of multinational sponsors were simply too great for CL and EL not to be completed.

European top clubs are owned by non-European capital

UEFA supports the concentration of gigantic sums in the five biggest leagues by distributing 70% of the payouts from the two European club tournaments – the Champions League and the Europa League – to these five football nations. The five biggest leagues are also pre-allocated 19 places – or 60% – out of 32 places in CL’s group stage. A significant explanation for this distribution is a latent threat from the strongest money clubs – Real Madrid C.F., F.C. Barcelona, ​​Manchester United F.C., F.C. Bayern Munich, Paris Saint-Germain F.C., Manchester City F.C. and Liverpool F.C. – to go their own way in the form of a “closed tournament” exclusively for these clubs. The top European clubs, most of which are owned by investors from Qatar, the United Arab Emirates, the United States or other countries outside Europe, have had annual growth rates of 8-10% over the past decade and the individual clubs’ annual turnover is today at DKK 5-7 billion.

The richest clubs have a monopoly on sporting success

UEFA has gone to great lengths sportingly to accommodate the strongest clubs and today the Champions League is a “closed VIP party” for the richest, while smaller nations’ best clubs – in i.a. Denmark, Sweden and Norway – in the vast majority of cases must “just” qualify for the second best European club tournament: Europa League and from next season the third best European club tournament: Conference League. The enormous capital concentration of the top clubs in the five biggest leagues also has a number of sporting consequences. In the 2019-2020 season, no clubs from other than the top five leagues managed to advance among the top 16 clubs from the group stage. And on UEFA’s ranking, which is calculated according to the clubs’ results in the last 5 years of European club tournaments, there are only 3 clubs – F.C. Shaktar Donetsk of Ukraine (No. 12), F.C. Porto (No. 19) and S.L. Benfica (No. 20) from Portugal – among the 20 highest ranked clubs.

Inequality in European club football is growing

Developments in European football are unequivocal: the richest clubs in the biggest leagues are getting richer and richer. And the clubs in the smaller leagues – i.a. the Danish Superliga – gets (perhaps) a (marginally) larger financial turnover, but in relation to financial races among Europe’s strongest money clubs, the clubs from the smaller nations become poorer and poorer. The best players – also from Denmark – will naturally compete against the five strongest leagues and the concentration of top players is – and will in future be further – in relatively few clubs. It is thought-provoking that the second best series in England – The Championship – today has a significantly higher turnover than e.g. the best leagues in the Netherlands, Belgium and Portugal. In a “global and unregulated market”, the (few) strongest will always do best. And with capital transfers across borders and continents, inequality will (just) get bigger and bigger – especially in football, which has the entire world’s population as consumers.

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