European club football broadens distribution of fast-growing revenues: buildup not breakup

The world's most popular spectator sport is tackling a growing imbalance between the haves and the have-nots, i.e., the teams that regularly derive substantial income from European club football competitions (especially from the top-tier UEFA Champions League) and the ones that don't.

There is pressure from the top--with three of the largest clubs still pursuing litigation against the rest of the ecosystem--as well as from the bottom, where the Union of European Clubs (UEC) was just formed to "improve support and advocacy for non-elite professional clubs." European football-governing body UEFA faces the challenge of brokering a compromise and safeguarding sustainability.

On Wednesday, the Associated Press reported on a press briefing at which UEFA outlined its plans for the 2024-27 seasons. That article provides a good overview of the economic dimension. In a nutshell, "UEFA expects revenue from broadcasters and sponsors to rise about 33% [from the present level of 3.6 billion euros, or US$3.9 billion] for its revamped club competitions in 2024, and pledged Tuesday to spread most of any surplus among lower-ranked leagues." The plan is not only to strengthen clubs that don't qualify for the lucrative European club competitions, but also to allocate a greater share of solidarity payments to leagues other than the top five (England, Spain, Germany, Italy, France).

What I'd like to focus on here is a structural aspect: the governance structures within which such solutions are found and ultimately implemented.

The three clubs suing the system (Real Madrid, FC Barcelona, and Italy's Juventus FC) argued to the European Court of Justice last year that UEFA's dual role as a governing body and an organizer of competitions constitutes a conflict of interest. They said UEFA would never decide on the grant or denial of preauthorization of a new competition based on objective and merits-based criteria. Instead, they said, UEFA would seek to protect its turf. That argument failed to gain traction with Advocate General Athanasios Rantos, who apparently saw the "European Super League" project for what it is: an attempt by a few large clubs to topple the integrative structures that are constantly working out and recalibrating a compromise between all stakeholders.

It is not credible that the same clubs who originally wanted to set up a largely closed-shop league would now genuinely seek to strengthen big-fish-in-small-pond clubs such as the Netherlands' Ajax or Austria's Rapid. The imbalances they decry would even increase if clubs could qualify through their domestic-league performance only for the third or fourth tier of a European league system. Theoretically, any club playing in any European country's top-level league can qualify for the Champions League for the very next season, based on sporting merits, and compete for the most important title in club football. It is unrealistic to assume that any club would win multiple successive promotions, but even if it did, a new entrant would need several years to generate substantial income and to get a shot at the title. That setup is the next best thing to a closed shop. It's "fauxpen".

A22, the marketing and lobbying agency advocating for a European Super League, says clubs--not UEFA--bear all the risk and should be in charge. That distinction does not withstand scrutiny. It's not about whether clubs get to decide: it's about whether a few clubs can maximize their own revenues at the expense of everyone else, or are required to build a consensus with the wider ecosystem. It's about how many clubs have a say, and how many clubs' interests are taken into consideration.

The national football federations that are technically UEFA's members are associations of clubs. That fact alone belies any claim that clubs don't control their destiny. And the influence of the European Club Association (ECA), which represents the interests of the clubs that typically compete in UEFA's competitions, has grown considerably:

• ECA elects two members of UEFA's Executive Committee (ExCo). A third member is elected by the European Leagues, which--like ECA--represent the interests of major professional clubs.
• ECA nominates the majority of the members of the UEFA Club Competitions Committee (CCC), an advisory body. There, again, the European Leagues have representation as well.
• There is a conciliation process in place for sitiatuions in which UEFA's ExCo may disagree with any of the CCC's recommendations. If all else fails, UEFA's President and the Chairman of the ECA will try to reach an agreement, failing which there will be no departure from the status quo.
• On the business side, ECA is becoming a 49% shareholder in UEFA Club Competitions SA (UCC), the commercial operator of UEFA's football competitions. As of the 2024-25 season, UCC will have its own management and staff.
• UCC's Board of Administration will have an equal number (7) of representatives from UEFA and ECA, and one independent member on which they have to agree. "Deadlocks" will be addressed by conciliation talks between UEFA's President and the Chairman of the ECA.

At the moment, there are three clubs--collectively representing 7% of global football revenues--whose disdain for a consensus-based co-decision process leads them to allege a conflict of interest.

The three seek to distract from their self-serving agenda (which includes the devaluation of domestic leagues) by complaining about the existing governance structures. They claim to be in a better position to enforce financial fair-play rules, though one of those clubs is overindebted and another being investigated by public authorities over financial irregularities and fraud. Incredibly, they liken UEFA to digital gatekeepers like Apple and Google that control and tax huge ecosystems in which they furthermore self-preference their own offerings. Actually, UEFA is a non-profit, receives only 6.5% of (net) revenues from the competitions in question, uses those funds primarily for the development of football across the continent, and does not let its own teams compete in its tournaments with the ones it regulates.

The new revenue distribution model should make a significant contribution to the competitiveness of clubs below the top level, and of those playing in less lucrative domestic leagues. The processes are in place to make continual improvements in accordance with European sports values. It becomes harder and harder for the three renegade clubs to make a compelling case for disruption.