Finance Uncategorized

Champions League winners might not win financially

Surprisingly, the tournament winners may not go home with the highest revenue.

With the announcement of the fixtures for February’s UEFA Champions League Round of 16, we can use the revenue distribution for the 32 Champions League teams to determine potential financial outcomes.

This year’s gross commercial revenue is $1.6 billion, an increase from last year’s $1.3 billion. According to UEFA, the 32 group stage teams will go home with a minimum of $10.6 million, and the tournament winners will make a minimum of $46 million, not counting their market pool share.

Every group stage win nets a performance bonus of $1.2 million per team and $614,000 for a draw, and the earnings add up in the elimination rounds. The round of 16 teams will collect an extra $4.3 million, the eight quarterfinalists will collect $4.8 million, the four semifinalists get an additional $6 million and the tournament winner nets an extra $12.9 million with the runner-up picking up $8 million.

(Witters Sport - USA TODAY Sports)
(Witters Sport – USA TODAY Sports)

Surprisingly, the tournament winners may not go home with the highest revenue. Though Bayern Munich won the 2012-13 season, Juventus went home with the biggest check despite a quarterfinal exit. The German giants won $67.3 million while Juventus went home with an astonishing $80 million in revenue. In the 2013-14 season, champion Real Madrid generated the highest revenue but Paris Saint Germain came in second with $66.6 million in revenue despite exiting in the quarterfinals.

Teams such as Juventus and Paris Saint Germain make more money despite less on-pitch success because of TV revenue. As in any sport, TV contracts matter as much to UEFA teams as competition winnings. Revenues are distributed equally among teams within each country, so the top four countries in terms of TV revenue must split their earnings among more teams: Spain (four teams), Germany (two), England (four) and Italy (two). That means the share of TV revenues for the teams in the most successful countries can actually be smaller than single teams representing a country. As the only team from Greece, Olympiacos F.C. was the sole recipient of the country’s TV revenues.

(Witters Sport - USA TODAY Sports)
(Witters Sport – USA TODAY Sports)

In 2013, Juventus made less prize money from actual competition than winners Bayern Munich ($25 million versus $44 million). However, Juventus made $31 million more than Bayern Munich in television funds. That’s because the Italian television market awarded the Italian teams $99 million in total. Since the only other Italian team that season was AC Milan, the money was split between the two teams, whereas Germany divided $64 million between three teams. A strong tournament run could position Juventus to once again bring home the highest revenue.

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