Why Newcastle get less from the Champions League

Judging from the Newcastle fan interviewed on Radio 5 this morning the Toon Army enjoyed their night at the San Siro and were justifiably satisfied with their 0-0 draw. The financial rewards may not be as great.

Why will the Champions League not benefit Newcastle United as much as their rivals? The Geordies have basically been hammered for the crime of not playing in Europe for ages, so it does not really matter how good (or bad) the current team is, which means that Ashley’s legacy still lingers on.

Normally, the English clubs in the Champions League receive around four times as much as those playing in the Europe League, but Newcastle are the “Inbetweeners” this season. Their €30m revenue is stuck in the middle of the €60m average for the other three Champions League clubs and the €16m average for the Europa League.

Newcastle will receive a much lower TV pool than the other English clubs. Before a ball is kicked, their share will be €9.8m, which is only around half as much as Manchester City’s €18.3m.

To them that hath shall be given

The real damage to their earnings comes with the UEFA coefficient, where their €4.5m pales into insignificance compared to the other three English clubs: Manchester City €33.0m, Manchester United €28.4m and Arsenal €25.0m.

The UEFA coefficient payment was introduced in 2018/19, based on a team’s performance in UEFA tournaments over the past 10 years, including bonus points for winning tournaments.

This clearly benefits the established elite like Real Madrid, Bayern Munich and Barcelona, who all pick up well over €30m, having been rewarded in some cases by good performances many years ago.

Newcastle’s earnings are currently €30m, which is less than half of Manchester City’s €67m, and also miles below Manchester United €57m and Arsenal €56m.

That said, Newcastle will still do better financially than England’s representatives in the Europa League, where the current earnings are even lower: Liverpool €20m, Brighton €18m and West Ham €11m.

Aston Villa’s return to European competition is not going to generate a huge sum either, as they are currently on just €10m (participation €2.9m, UEFA coefficient €0.8m and TV pool €6.5m.

Results matter

Of course, all of the analysis to date has ignored prize money, so Newcastle could redress the balance by doing the business on the pitch. In the group stage, each win is worth €2.8m, while a draw earns €930k. There is more prize money for each additional stage reached: last 16 €9.6m, quarter-final €10.6m, semi-final €12.5m, final €15.5m and winners €20.0m. Therefore, the difference between winning and losing the final is €4.5m.

Newcastle will see good growth in their other revenue streams. Gate receipts will increase thanks to a packed St. James’ Park eagerly lapping up the prospect of elite European games, while the prospects for commercial deals and sponsorships will also be enhanced.

Clearly, Newcastle United will benefit financially from qualifying for the Champions League, which will help the club meet its FFP targets among other things. That’s good news, but the prize will not be as much as it might have been, given the way that the UEFA coefficient effectively punishes “newbies”.

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The Political Economy of Football V2

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