Manchester United Counting The Cost Of Champions League Exit
After three rounds of the Champions League group stage, Manchester United were in pole position to progress. Wins over last season’s runners up Paris Saint-Germain, RB Leipzig and Istanbul Basaksehir, saw Ole Gunnar Solskjaer’s men top of the table.
United then went on to lose their last three matches in the competition though, sending them crashing out of Europe’s elite club competition and into the Europa League. Not only is that a galling result for fans, but it’s a hammer blow to the finances too.
How an early Champions League exit adds up
The numbers between the two European competitions are stark. Every team who makes the group stage is guaranteed a minimum payment of £13.5 million (€15m), which goes some way to explaining why it’s viewed by some on the same pedestal as winning a domestic cup competition. However, qualification from Group H would have earned United £8.5 million (€9.5m) just for reaching the knockout stages. There are further payments for reaching the quarters, semis and final respectively, plus a winners’ bonus too.
Even if the Red Devils repeat their 2017 Europa League success, the prize money generated would be around a million pounds less than making the knockout stages of the Champions League alone. Although that’s a long road ahead, the best betting sites make United one of the leading contenders for the prize. 888Sport are joint-best price on Solskjaer’s men securing another European crown at 7/1, only behind Tottenham in the latest odds. Arsenal and Leicester are also towards the front of a market that’s dominated by English teams.
Despite the bookmakers’ assessment, such a vast gulf in the finances demonstrates why even a club of Manchester United’s commercial weight will feel the pinch on their balance sheet. The figures at stake between the two competitions are in different galaxies, even in the context of a club that generated £627.1m in the year ending June 2019.
The impact on sponsorship and advertising
Although the finer details of all United’s commercial deals aren’t publicly known. The Athletic reported that neither their Adidas kit deal (worth £75m annually) or their shirt sponsorship with Chevrolet (£64m per season) are not affected by failure to progress in the Champions League. This will be welcome news, especially given the prize money drop that the club will now face for the rest of the 2020/21 European campaign.
There may be other agreements that are impacted by the results on the field, but those two headline names account for more than over half of the club’s commercial income, based on the latest figures available at the time of writing.
A bitter pill to swallow with non-existent matchday revenue
Money is much tighter than a year ago, even at commercial powerhouses such as Manchester United. The loss of any matchday revenue, especially for a stadium such as Old Trafford which is the largest domestic football stadium in the UK at 74,140 seats, is significant. With games – both domestic and in Europe – played behind closed doors since March, clubs around the country have seen this revenue stream dry up completely. For a team that operate at capacity for almost every single home game regardless of the competition they’re playing in, this is a huge dent in the finances.
In the club’s latest financial report covering the first quarter of the 2021 fiscal year, it was revealed that matchday revenue dropped by 92.3 per cent compared to the same period in 2020. Although some fans have returned to matches in the south of the country in recent weeks, any crowds will be strictly limited so this dramatic drop may become a familiar story in United’s future financial reporting.