Elexit? Europe’s elite clubs pave the way for a breakaway

Domestic leagues do not believe denials

Eyes on the prize: ECA’s richest clubs want the top competition for themselves

It is Champions League quarter-finals week, when the best players in the world push for European primacy.

The football excites fans everywhere. The format terrifies Europe’s domestic-league administrators. Because the clubs you’ll be watching over the next couple of days have an appetite for the spotlight, and they just aren’t getting it at home.

European football clubs make the bulk of their money in three ways: from broadcasting, which is largely based on geography (tv market size) and football success (where they finish in the league influences how much a club receives); from their matchday operations (gate receipts, catering and executive-box sales) and commercial activities (sponsorship, retail and merchandising operations.)

Commercial revenues are a good indicator for how popular a club is worldwide, because they convert popularity overseas into cash in a way that stadium revenues cannot. A club might fill its stadium in its local town while being completely unknown to football fans in other countries. But turnover from commercial sources allows clubs to externalise their own revenues into foreign markets as major global brands seek the exposure football clubs can bring. 

As demonstrated in the graphic below, in the modern era, blue-chip global sponsors are pouring money into commercial partnerships with European clubs. They do not do so simply because they get nice seats at a big football stadium. They do it because the data tell them the sponsored club has a big reach among their customer base and that association with it will create affiliation with their brand.

As you can see, commercial endorsements, shirt sales and merch are together worth almost £3 billion pounds among the 20 richest teams in Europe.

Source: Deloitte Football Money League

For nine of the 20 clubs in that list (the six highest earners plus Borussia Dortmund, Internazionale and Schalke), commercial revenue contributes more to overall turnover than either broadcasting or gate receipts. And with the market for football on TV saturated to the point of stagnation, it remains the brightest prospect for growth.

What the numbers in the graphic above tell those clubs’ owners is how they are more alike each other than they are to domestic minnows like Sassuolo in Serie A, Huesca in LaLiga or Huddersfield Town in the Premier League.

And this is why moves are afoot to create a closer association between them. It is all about separating the haves from the have nots. Last week the European Clubs Association held its annual general assembly. Although on the face of it the ECA represents more than 200 clubs across Europe, the reality is that it serves the motives of its richest members.

The Spanish sports daily As quoted a source from one elite club at the general meeting of last week as saying: “We defend our own interests… Our objectives do not coincide with those of the great majority, but we do not need their support to move the project forward.”

That, of course, means football’s tectonic plates are shifting, and it could lead to volcanic impacts on the game all over Europe. Juventus’s Andrea Agnelli, the ECA chairman, has set out a timetable for when the seismic activity could strike European competitions. “We have to look at how the footballing landscape could look beyond 2024,” he said.

That is when the memorandum of understanding between the ECA, Fifa and Uefa expires, and new-competition concepts are already emerging. 

It seems the biggest prize being eyed by the biggest clubs is Saturday-night fixtures for their new competition. Having already moved the Champions League final to the weekend, it would be a natural progression to move all its other games to similar time slots. It is a proposal that was advanced years ago by Barcelona, and despite protestations from Spanish clubs to As that no such moves are taking place, it has definitely not gone away.

Uefa: encircled

The European Leagues organisation, which as the name suggests, represents the interests of the continent’s domestic football leagues, has no doubts about the direction Agnelli and his cohorts are taking the European game. The Leagues suspect an ‘Elexit’ is afoot, the ring-fencing of Europe’s elite competition for its richest clubs, with matches played at times to suit themselves.

The fear is that scheduling contests between the elite European clubs over weekends will fatally undermine their own offering to fans. Sources at the European Leagues have privately termed the ECA’s ambitions a “land grab” against the domestic competitions. Publicly they label it an explicit “threat”. There is not even a pretence of diplomacy as they demand the elite clubs protect the interests of their compatriot football fans over the distant audiences that feed their commercial revenue.

“The passion of football fans is driven by local football and by their tradition to go to the stadium with family and friends on Saturday and Sunday,” it said in a statement. “The current calendar guarantees a proper balance between domestic and European Football. All professional football clubs are invited to discuss the evolution of European club competitions and the threat [the] domestic leagues and clubs face.”

This is not the only gripe the European Leagues have. Indeed, despite their apparent support for the football calendar as it stands, they also harbour one about the deleterious impact of Uefa distributions to the clubs participating in its competitions.

In a sop to its lesser lights, the ECA has voiced plans for a third European competition allied with the Europa League. This would give them more guaranteed football than their short-lived summertime runs at qualification for the tournament proper currently yield, but it serves the interests not of domestic competitions around Europe but the biggest individual clubs within them.

Europa League: unbalanced?

The multimillion-euro payments being made to clubs from small football markets that make it to the Champions or even Europa League vastly outweigh what they earn from their domestic leagues. And the European Leagues group is now voicing its anger at a status quo it says has unbalanced domestic competition.

“It is important to implement a new revenue distribution model which could give the opportunity to all clubs, and not to just a few, to compete in a fair competitive environment,” the statement from European Leagues added.

Looking at the numbers, the Leagues have a point. Fifty-six clubs shared €428.1m (£369.059m) from the Uefa Europa League and 44 shared the Uefa Champions League’s €1.413 billion (£1.218bn – for individual distributions, see graphics below).

The sums received by some clubs vastly outweigh the entire value of their national league’s TV deal. For instance, the domestic TV deal for Switzerland’s top league in 2016-17 amounted to €14m (£12.07m), or €1.4m (£1.2m) per club. Yet the Swiss champions that season, Basel, earned double the aggregate value of that overall league-wide contract – €28.78m (£24.83m) – for their run to the last 16 of the 2017-18 Champions League.

Such cascades of cash are bound to influence the domestic competition of the clubs involved, allowing them to hoover up talent from local rivals less fortunate than themselves to reinforce the cycle of their own success.

In football as in wider society, the concentration of power and wealth in individual clubs is creating a seismic pressure point for Europe. How long before the volcano erupts?

For an explorable view of this graphic, click here
For an explorable view of this graphic, click here

One thought on “Elexit? Europe’s elite clubs pave the way for a breakaway

  1. Top analysis as ever. I’ve tried to work out the reasoning behind a breakaway league on my blog (I don’t think it’ll ever pan out the way the clubs expect it would for reasons stated here). For it to have any stature it’d need Premier League clubs — specifically Manchester United and Liverpool, but why would they abandon their domestic league for short-term gain?

    It’s no surprise Agnelli is leading the calls for change; Juventus wouldn’t say no to a breakaway because it would prop up the other Italian teams lagging behind domestically.

    You do raise an interesting point re TV audiences and money. The Champions League/Europa League auction (not exactly sure if the tender has been released?) will be one mark of whether a breakaway has legs. Looking from a UK perspective so will the Premier League auctions; Liverpool a few years ago set the wheels in motion over individual overseas TV rights but got slapped down. The big six now have a bigger share but how long until they push for more?


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