Club World Cup will be good for Chelsea

Fifa has finally answered one of the key questions around the upcoming relaunch of the Club World Cup — how much it pays. On Wednesday the competition organiser revealed its prize money schedule, with payments based both on turning up and actually winning matches. 

Considering the rates were negotiated with the European Club Association, it’s perhaps little surprise that the bulk of the purse is heading to the top European clubs. Some are promised $38.5mn before a ball has even been kicked, with potential earnings for winning the tournament of $125mn when ends on July 13.

Fifa has made a lot of noise about the Club World Cup being a chance to spread some of football’s wealth beyond Uefa’s sphere of influence. The month-long competition will feature 32 teams from around the globe who qualified largely based on performance in regional tournaments.

Yet the financial impact will be felt differently depending on where a team hails from.  Assuming — perhaps unfairly — that Auckland FC fails to win or draw any of its group games against Bayern Munich, Benfica or Boca Juniors, then the only entrant from Oceania will go home with just $3.6mn. Subtract the costs of competing (eg travel), and that probably doesn’t leave a lot of change.

Teams from Asia, Africa, and North America fare a bit better, with each guaranteed $9.55mn for participating. Even if they lose all their games, the tournament will still deliver an annual revenue boost this year of more than 10 per cent for teams the size of the Seattle Sounders and Urawa Red Diamonds.

Fluminense fans will probably fancy their chances of bagging some points against South Africa’s Mamelodi Sundowns and South Korean side Ulsan HD. South American teams will get at least $15.55mn for showing up, while qualification to the second round would bring an extra $7.5mn. That’s more than double the money on offer from winning the Brazilian league, and starts to look similar to the pay-off from victory in the Copa Libertadores — South America’s version of the Champions League.

For top European clubs, the money is decent to start with, but not transformative. Cash for participating equates to around 3.5 per cent of Real Madrid’s annual income, 5 per cent for Bayern Munich, and 7 per cent for Chelsea.  A nice boost, but not massive.

Heftier sums come from making progress. Winning all three group stages and reaching the semi-final bags a top club more than $80mn.  For a club like Chelsea that could do with a financial sugar rush to help balance this year’s spending, the Club World Cup will be hugely welcome.

By backloading so much for winners, Fifa has also built in a serious financial incentive for actually lifting the Tiffany-designed Club World Cup. Competition should be fierce.

But it’s worth remembering this event (for now at least) will only take place once every four years. Only a tiny group of teams are virtually guaranteed to qualify again (Real Madrid, Manchester City, Bayern Munich, Paris Saint-Germain) — all of whom already feature in the top five richest clubs in the world.

So yes, there’s some trickle down economics at play. But ultimately, if the Club World Cup succeeds, the world’s wealthiest clubs that benefit.

Fifa's motivations

The Club World Cup is Fifa’s attempt to reduce its financial reliance on the men’s World Cup. The month-long tournament, an updated and much enlarged version of a long-standing exhibition tournament, will be hosted in cities across the US. There will be 63 matches involving 32 teams.

Liverpool, Manchester United and Barcelona, three of the most popular teams in the world, did not qualify, while Fifa has faced criticism for giving a place to Inter Miami, home of Argentine superstar Lionel Messi. Miami won the most points during the regular season, but LA Galaxy were crowned US champions after winning the play-offs. Fifa said it considered a range of qualification criteria in consultation with the US league.

On the commercial front, broadcasters and sponsors have been reluctant to back an event with little name recognition, particularly as many had not budgeted for additional spending during what was due to be a relatively quiet summer for sport.

Some in the footballing world have also voiced doubts about how many people will tune in to watch top European club teams face relative minnows from countries such as South Korea, New Zealand and the United Arab Emirates. However, some earlier stumbles have been overcome. In December, Fifa sealed a $1bn deal with streaming company DAZN to show the cup globally free-to-view.

After a slow start, Fifa has signed four sponsors for the cup, with Chinese electronics maker Hisense and Bank of America joining long-term commercial partners Coca-Cola and AB InBev. The most recent World Cup in Qatar had fourteen. One person involved in the competition said the target for the commercial programme was up to a dozen sponsors.

Last month, Fifa boss Infantino took the trophy — a dish made up of concentric rings that can be unlocked by a golden key — to the Oval Office to show Donald Trump, and invited the US president to present it to the champions on July 13. “It’s beautiful,” said Trump. “I’ve never seen anything like it.”