What is the value of the Europa League to Premier League clubs?

Published 19 October 2015 | Authored by: Alan Switzer

In this series of feature blogs, the Sports Business Group at Deloitte offers financial commentary on key activities in the global football industry. The fifth blog looks at the value of the Europa League to Premier League football clubs.

The UEFA Europa League (formerly UEFA Cup) has had winners from seven countries in the last 15 years, with Spanish clubs performing particularly well. In contrast, Premier League clubs have arguably underperformed and the competition’s value to Premier League clubs is the subject of much debate. So what are the on and off-pitch facts?

 

Snakes or ladders?

A common accusation levelled against the competition is that the volume of games, frequently involving significant travel, places an undue strain on playing squads and disrupts the rhythm of a club’s season caused by the Thursday timing of matches (usually leading to league games on a Sunday), which combine to hinder league performance.

The chart below examines this by considering the change in league performance for clubs from the ‘big five’ leagues playing the Europa League for the five completed seasons since 2009/10.

Change in League Performance

The data suggest that while, on average, there may be a negative impact of playing in the Europa League, this impact is modest, just over one place. English clubs fare worse but it is still only 1.6 places. Of the 68 clubs examined, 36 clubs experienced a fall in league position in the season playing in the competition, but 32 clubs performed the same or better (eight and five respectively for the 13 English clubs). It seems evident Europa League participation does not necessarily result in poor league performance.

Boom or bust?

While the Europa League is much less lucrative than its big brother, the Champions League, it can nonetheless generate substantial revenues.1 The rewards for participating will increase significantly from 2015/16 with the uplifts from the new cycle of broadcasting deals and changes to the allocation of these revenues between UEFA competitions meaning Europa League distributions will be up by c.65%.

Based on recent Europa League performance by English clubs of typically reaching Round 32/16, average UEFA distributions are likely to be £5m or more and could be well over £20m for winning the competition once matchday and commercial revenues are included. These revenues can finance adding some depth to the squad to cope with extra games. Yet many Premier League clubs field weakened teams in the competition, damaging their performance and meaning the available rewards aren’t realised. Which begs the question, why do they do this?

The challenge for Premier League clubs is that under the next round of broadcasting deals from 2016/17 it is likely each place moved up the league will be worth close to £2m in merit payments alone (£1.2m in 2014/15). Add to that a potential focus to break into the top four for a coveted Champions League qualification place, or for other clubs the fear of relegation, and there is a risk the Europa League could fall further down the priority list. However, there are some mitigating factors to consider.

At the bottom end, the relegation fear seems overplayed given no Premier League club in the last 10 years has been relegated while playing in the Europa League group stages or UEFA Cup. At the top, from 2014/15, the winner of the Europa League qualifies for the Champions League – a huge incentive, given how challenging qualification through league position is in the Premier League and Europe’s other ‘big five’ leagues.

 

Head or heart?

Putting aside financial considerations, football remains about striving to win matches and ultimately competitions. The Europa League provides the most realistic opportunity for many clubs to do that on a European stage. The fans and players of Fulham relished their journey to the final in 2009/10,2 while supporters of clubs such as Swansea City3 and Stoke City4 have recently experienced memorable European nights under the floodlights and travel across the continent.

What price that compared to a potential modest fall in league position? Particularly when the football bonus for that improved league performance that Europa League performance is sacrificed for is, in many cases, another season in the Europa League.

Note: Change in league performance represents league position in the season playing in Europa League relative to position in the previous season, for clubs playing in the Europa League between 2009/10 (when the competition was restructured) and 2013/14.

Excludes those clubs entering the Europa League after playing in the UEFA Champions League group stage and those clubs that played outside the top tier in the season playing in Europa League (e.g. Wigan Athletic and Birmingham City).

The Sports Business Group at Deloitte is a team of 20 people based in the UK, working exclusively on sports business projects with clients across all sports around the world. This article was first published in the Deloitte Annual Review of Football Finance (2015 edition). Further information is available at www.deloitte.co.uk/arff.

 

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About the Author

Alan Switzer

Alan Switzer

Alan Switzer is a Director in the Sports Business Group with over twelve years’ experience in the sports business industry. He has worked with a wide variety of governing bodies, clubs and other organisations from a broad range of sports. Alan leads the Sports Business Group's horseracing and equestrianism assignments and has worked with many of Racing's key organisations.

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