By David Gold
December 8 – Manchester United’s accountants will be counting the cost of their shock elimination from the Champions League at the hands of Basle last night, as the club could lose up to £22 million ($34 million/€26 million) in income.
Much of this will come from lost prize money, as they last season collected £13.7 million ($21.4 million/€16.1 million) from reaching the final of the Champions League, and they will also make £1 million ($1.6 million/€1.2 million) less from their group stage results than in 2010-2011.
They are also likely to take a severe hit from television revenues, as last season United made the most money from this source of all teams participating in the competition, taking £45 million ($71 million/€53 million), despite losing the final to Barcelona.
Their share of the market pool of television money was greater than the Catalans as England is the most lucrative domestic market.
Arsenal, defeated in last season’s second round, took more money from the market pool than Tottenham Hotspur, who reached the quarter-finals, thanks to the fact that they finished higher than their North London rivals in the Premier League the in 2009-2010.
Half of the television prize money to English clubs, which last season was £72 million ($112 million/€84 million), is calculated based on the position each team finished in their league the previous season.
As league winners, United will take 40 per cent of this income, with Chelsea taking 30 per cent, Manchester City 20 per cent and Arsenal 10 per cent.
However, the other £36 million ($56 million/€42 million) is calculated based on how far each team goes in the Champions League, and with both Arsenal and Chelsea winning their Champions League groups, they would both be expected to progress to the quarter finals.
If this happened, United would likely take at least £5.1 million ($8 million/€6 million) less than both of their London rivals, and the worst case scenario would see them miss out on a probable further £1.7 million ($2.7 million/€2 million).
The rest of the financial consequences of United’s early exit is based largely on lost gate receipts from Champions League games, though this will likely be offset by participation in the Europa League, in which teams have to play more games to reach the final.
Winning that competition would also go a small way to making up for the potential loss of revenue, though the prize money for winning the Europa League stands at £4 million ($6.2 million/€4.7 million).
Though the financial blow of the 2-1 defeat to Basle is yet to truly sink in, United are at least well placed to deal with the blow, as they made £29.7 million ($48 million/€34 million) profits in 2010-2011, and have since signed a £40 million ($65 million/€45 million) sponsorship deal with DHL, as well as reducing their overall debts.
Neighbours Manchester City are likely to be worse affected by their departure from the competition, as it deprives them of crucial revenues in their bid to reduce their huge debts, having last season made a loss of £197 million ($311 million/€230 million), and their revenues are less than half what United make each year.
One party likely to be delighted at the pair’s exit is Channel 5, who can hope to pocket an extra £10 million ($15.6 million/€11.7 million) from increased viewing figures for their Europa League coverage.
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