European Leagues Call On UEFA To Distribute Revenues More Evenly

The organization representing Europe’s soccer leagues has released a report calling on UEFA to give a larger slice of its Champions’ League and Europa League revenues to the clubs that fail to qualify for those competitions.

European Leagues, the organization representing the continent’s domestic leagues, wants to see solidarity payments to the 600 or so top-tier clubs who didn’t qualify for European tournaments or who were knocked out before the group stages to be increased to 20% of those tournaments’ total revenue. They also want some of that revenue to be ringfenced for clubs outside of Europe’s ‘big five’ leagues, and propose that the money that clubs get for competing in the competition is redistributed more evenly to try and reduce the dominance of a few teams that regularly compete in the knockout stages of the Champions’ League.

In the report seen by Reuters, the organization says only 7.3% of this season’s revenues will be distributed as solidarity payments, and that the gap between the clubs in the Champions’ League and the clubs that aren’t in the competition is growing wider. It says “The current model is not beneficial for improving competitive balance in European football”.

Sporting Intelligence’s Global Sports Salary Survey 2018 highlights this lack of competitive balance within Europe’s domestic leagues. Juventus, the highest paying club in Italy, have an average salary that is 7.6 times that of the median Serie A salary. Bayern Munich pay their players 9.1 times the median Bundesliga salary, and in Europe’s smaller leagues the gap can be even wider with Celtic, who often reach the Champions’ League group stage, paying 13.9 times the median Scottish Premier League salary. While not all of these leagues are one-horse races this season, the three aforementioned sides have won their domestic leagues every year for at least the past five seasons.

When it comes to European soccer, the gap between the haves and have-nots is even bigger, there are 15 UEFA member countries that have never had a single team reach the group stages of the Europa League, and a further 10 that haven’t reached the knockout stages. When the 1990/91 season European champions Red Star Belgrade qualified for the group stage of the Champions’ League this year, it was the furthest they had got in the competition since the old European Cup was reformed in 1992.

Of course, revenue from European competitions isn’t the only way clubs get their money. Some clubs are bankrolled by rich owners, and disparities are also created by domestic TV deals. But the effect that a more equitable TV revenue system can have on teams’ wages can be seen when comparing La Liga to the Premier League.

La Liga’s TV rights have become far more evenly distributed than they were in the past, but in 2016/17 there was still a 4:1 ratio between the revenue given to the top and bottom teams, which is a far wider gap than in the Premier League. The result of La Liga’s historic and present unequal distribution is that when it comes to player salaries, Barcelona, Real Madrid and Atletico Madrid are all in the top six clubs in the world, but after that there is a massive drop off to the extent that La Liga’s 6th highest payers, Athletic Bilbao, have a smaller wage bill than Watford, the Premier League’s 13th best paying club. Out of Europe’s top five leagues, only France’s Ligue 1, distorted by petro-dollar backed Paris Saint-Germain, has a wider wage disparity than La Liga.

UEFA will likely be pressured by some of Europe’s top clubs to ignore European Leagues’ report, and the threat of a breakaway league could once again be used to try and prevent UEFA from distributing revenue more evenly.

But a more equal distribution of revenue could improve the Champions’ League as it would strengthen the weaker teams in the group stages, making the groups more competitive and unpredictable. If this leads to increased viewer numbers during the group stages then UEFA could actually grow the size of the pie that it is distributing.

UEFA is expected to decide on its revenue system for the 2021-24 cycle of competitions by the end of this season.