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Monetary Cost of Missing Champions League

Manchester United took a big hit to their top-four hopes after being held to a 1-1 draw by Leicester City at Old Trafford on the weekend. The Red Devils are fifth in the Premier League table with 60 points from 35 games and are four points adrift of arch-rivals Manchester City. Louis van Gaal’s side can still pip fourth-placed Man City for a spot in the Champions League, but Manchester United are now bracing themselves for the prospect of no top European football, and the financial implications will be enormous.

Reports have suggested that players signed after David Moyes’ tumultuous reign in 2014 will have a clause inserted into their contracts that will mean a 25% pay cut should they fail to reach the Champions League. As United have fared in the last handful of seasons, the club have allegedly found it necessary to ensure their finances aren’t spiralling out on control, but such a clause would perhaps make it difficult to attract the biggest names to Old Trafford.

In addition to the players that will overlook United in favour of clubs playing in the Champions League next season, the Red Devils will miss out on millions of Euros if they can’t get in the top four by the end of the campaign. Clubs will receive €12 million for reaching the group stage of the competition alone. Winning a match in the Champions League will earn a club €1.5M and a draw €500K. Sides will make €5.5M for reaching the last-16, €6M for making the quarter-finals and €7M for reaching the semi-finals.

Finishing runners-up in the Champions League will earn sides €10.5M while the winner will pocket €15M. There’s also the matter of Manchester United’s loss in revenue due to the lack of coveted European games to come at Old Trafford. Old Trafford typically sells out on the big Champions League evenings, earning the club around £3M per game, and the commercial money will be going down too.  Fierce rivals Manchester City received €46M in prize and TV money in 2014/15, which is a lot of money for United to miss out.

For a club that spends so much time and money boosting their brand around the world being out of the Champions League will eventually be costly to their long-term future. They are going their second season in the last three without European football at the highest level, and it will make it harder to attract big names and potentially lucrative sponsorship. United do have a game in hand on City so they stand a chance of cutting the deficit to a point, despite that the Red Devils remain underdogs.

Manchester United are a lucrative worldwide brand, so the loss of money won’t be as harmful as it could be with other clubs, but it could see the club owners tighten the purse-strings. United would freely spend big money on signing stellar talent from the continent due to the lure of playing in the Champions League boosting interest, but the financial implications of not participating in the European football would be immediately felt and it would have long-term effects on the club. Executive Ed Woodward is lining up some expensive acquisitions in the summer, but the club will be chipping into their revenue without the Champions League helping to pay off any relevant fees.

Manchester United’s majority income – £1960/£3,103M (63%) – has been from broadcasting and commercial, two areas that no longer being a European heavyweight will infringe upon in the future. They still have a chance to topple Manchester City in the Premier League but need a perfect finish from here on the road to stand a chance.

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