Why Manchester United has to Qualify for the UEFA Champions League – The Financial Implications

When Manchester United announced that Erik Ten Hag would be the new Manager of the club on April 21, 2022, majority of the fan base had a glimpse of hope that the club returning back to its glory days was imminent. Twelve months and a few days down the line, the fans can be positive that they would become great again.

The Dutch Manager led the team to a Carabao Cup Win on the 28th of February and also led the team to the FA Cup Final slated for June against their Manchester neighbors.

The Fortress, the Club’s Home ground used to be, is becoming such again. In 30 home games they have played this season, United have won 24, Lost 2 and Drawn 4.

This is how solid they have been all season long at Old Trafford Under Erik Ten Hag, but with all of the excitement that has come in, it would be disappointing if Man Utd fails to qualify for next season’s UEFA Champions League.

Earlier in May, it looked like Qualification was a forgone conclusion for the red devils, as they were seven points clear off their rivals, Liverpool, with a game in hand. Fast forward over a week, with consecutive away defeats to Brighton & Hove Albion and West Ham United, aided with Successive wins for Liverpool, the gap is now one point – although United have still got a game in Hand.

United’s quest to qualify for the Champions League remains in their hands, and they can take solace in the fact that they have 3 home games to play in 4. With their home record this season, they should be getting things done, but if they previously weren’t worried, they certainly should be now.

Asides the advantage of attracting players in the summer, variable financial outcomes would come by if United finish in the top four or not.

What Impact will Securing or Missing out on the Champions League have on United’s Finances?

How Much United will Earn If they Qualify for the Champions League

UEFA are yet to release their 2022-23 report, but according to UEFA’s 2021-22 report, there’s a projected value teams can earn next season.

As per the Athletic, UEFA split the €3.5billion (£3.04bn; $3.8bn) generated by all of their club competitions last season.

Those competing in the Champions League shared €2 billion. Twenty-five per cent was distributed evenly between the teams that qualified for the group stage. Thirty per cent was administered according to their 10-year records in Europe. Fifteen per cent was based on the size of their domestic TV markets. The final 30 per cent was linked to their progress in the competition.

Qualification alone to the Champions League group stage, based on this season’s numbers, is worth €15.6million (£13.6m; $17.1m). A club then receives €2.8m per group stage win and €930,000 for a draw.

How Would Champions League Football Impact their overall finances?

United’s most recent set of accounts for the three months ended December 2022, showed the cost of Playing in the UEFA Europa League instead of the Champions League is palpable.

The Broadcasting revenue totalled $74.1m  which saw a decrease of 34.8m from the three months ended December 2021. This downfall was triggered by non-participation in Europe’s elite club competition.

If United had qualified for the Champions League, the expectation was that overall revenue would be at record levels.

In their accounts for the financial year ended June 2022, United detail their combined broadcasting and matchday revenue related to European competitions as being £75 million (June 2022), £73.8m (June 2021) and £20.9m (June 2020).

The Commercial factors Involved

United signed a 10-year kit deal with Adidas in the 2015-16 Campaign that includes a non-champions League participation clause, which is about $94.5m.

If Man United do not qualify for the Champions League two seasons in a row, the annual payment received from Adidas gets slashed by 30 percent.

This would see the annual payment fall to $66.2m, which is a reduction of $28.3m.

Although the structure of the club’s deal with Adidas means that reduction does not come all at once, as it will be spread over the remainder of the contract, which expires at the end of the 2024-25 season.