Rangers set to hit Jackpot from Champions League distribution of funds

Rangers set to hit Jackpot from Champions League distribution of funds

The last time Celtic and Rangers competed in the Champions League in the same season, in 22/23, Celtic earned roughly €30 million from their participation, while Rangers earned around €20 million, despite Celtic only earning two points more than Rangers.

This was due to the distribution of cash via the 10-year coefficient, since Rangers had the second lowest 10-year rating in the tournament and won only €2.3 million, whilst Celtic, despite having the eighth lowest ranking, received a whopping €9.1 million. If both qualify for the new 36-team league phase next season, the allocation will be much different, since UEFA has released their budget for 2024/25, following successful approval by the member associations. It appears that we are revving up for  the first genuine title race between the Old Firm in the Scottish Premiership since season 2010/11 when Rangers won the league by one point on the final day of the season.

Celtic have been a financially sound team for many years, with more cash in the bank (£72 million) than almost all English Premier League clubs. However, they are fully aware of the impact of not making the Champions League, with Peter Lawwell declaring in the Celtic annual reports that the massive cash buffer was in place because “history tells us that we will not always qualify for the Champions League”

We now have a better idea of just how much the impact of qualification will be, as UEFA has stated their conservative estimate for total men’s club competition revenue is a massive €4.5 billion (up from €3.5 billion this year) – though they do caveat these figures should be treated with caution due to “the sales  process still ongoing and contracts yet to be concluded for some important markets”.

Not all of the €4.5 billion will be distributed to the competing clubs, as several deductions must be made first. For example, UEFA’s own cut of course increases, with their organisational costs rising from €323 million to €387 million, and the money “reserved for European Football to remain with UEFA” increasing from €188 million to €230 million.

In promising news for all Scottish clubs, the money for clubs eliminated in qualifying will increase by 25%, from €105 million to €132 million. Solidarity payments, which are granted to ALL clubs that do not compete in league phase football, increase by a stunning 120 percent, from €140 million to €308 million. This may mean up to £1.5 million for each SPFL club that does not advance to the next phase of the European League next season.

That still leaves a whopping €3.3 billion available to competing clubs, with Champions League clubs taking 75% of the revenues and the Europa League earning only 17%. The Conference League receives only a small portion of the total, accounting for 8%.

On an individual club basis, the money within each competition is split into three distribution streams:

• starting payment (equal for all clubs in the competition)
• performance related payment (money earned per point in the group stage & for progression through the competition)
• and lastly the newly formed “value” stream, which is a merger of the previous 10-year coefficient + TV market pool streams.

Looking first at the starting fee, which is money shared evenly by all teams before a ball is thrown, it is set to increase by 20% in the Champions League, from €15.64 million to €18.84 million per club. This compares to the expected Europa League starting price, which rises from €3.63 million to €4.31 million, while the Conference League beginning fee rises the least, from €2.94 million to about €3.16 million.

Moving on to the second stream, the performance-related fixed amount, which will see the largest overall increase of 54% in the Champions League. Despite this significant rise, the amount per group stage win for each club will fall, as the number of group stage matches increases by 50%, from 96 to 144. A win will now be worth €2.1 million, a draw €0.7 million, but each team will have eight matches instead of six to try to put points on the board – and money in the bank.

According to La Gazzetta dello Sport in Italy, each team in the Champions tournament will get an additional payout based on their finish in the 36-team tournament. The first through eighth places are set to receive €2 million, while everyone from ninth to 36th will receive an additional €1 million. There is also alleged to be a payment connected to “placement in national championships,” with clubs getting an additional €1 million to €10 million. That effectively increases the beginning payment to more over €20 million per club, even if they finish last with zero points. That’s more than Rangers received for making the Europa League final, plus there’s another distribution stream on top of that.

The final of the three streams is the new “value” stream, which will have a lower weighting this year (35%), resulting in less compensation for historical performance and a country’s TV market. La Gazzetta dello Sport believes it will involve a sophisticated ranking system for the 36 teams based on both the national market pool and the individual club coefficient during the previous five years.

There will be 36 shares, with the highest ranked team receiving nearly €37 million and the bottom ranked team receiving only one share for approximately €1 million. This will be notably excellent news for Rangers, who are expected to finish this season at least 26th in the five-year coefficient, while Celtic will finish no better than 69th. This is why Rangers’ guaranteed profits might vastly surpass Celtic’s, since Rangers could realistically expect to be in the top half of this ranking technique and thus receive somewhere between €10 and €20 million, but Celtic would be lower down this ranking and hence expect to earn around €5 million.

Notably, Rangers will be placed higher than Celtic in the 10-year coefficient for the first time in more than ten years.

However, the 10-year coefficient aspect will be significantly decreased, with the highest ranked team now receiving only €10 million and the bottom ranked team receiving only €300,000 – therefore it will most likely be worth a couple of million euros to either club. So, before a match, our teams will most likely bank between €25 million and €40 million. You can add another €20 million if they make it to the round of 16.

This is merely the money collected directly from UEFA; there is also an impact on all other revenue streams when competing in the Champions League against the Europa League. For example, Celtic participated in the Europa League in 21/22, followed by the Champions League following season – this saw an £8m increase in matchday revenue and a £6m rise in commercial income as their overall turnover rose by £32m from £88m to £120m.

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