Why the Europa League is now vital to Manchester United’s finances

This probably does not come as a surprise, but the likelihood of Manchester United qualifying for the Champions League through their Premier League finish is now practically zero.

Fifth place could be enough for English clubs to claim a spot among Europe’s elite next season, but according to Opta Analyst’s supercomputer, United have a 0.0 per cent chance of finishing that high.

United only have a 0.7 per cent chance of finishing either sixth, seventh or eighth, too, which may be enough for a Europa League or Conference League berth. Hopes of qualifying for Europe through the FA Cup were extinguished on Sunday following the fifth round penalty shootout defeat by Fulham.

As it stands, United’s first bottom-half finish of the Premier League era is far more likely than any of that. The upshot is next season could be the first that the club has spent outside of Europe since 2014-15. Before that, you have to go back to 1989-90 to recall a time when United were not playing in a continental competition.

The only saving grace for Amorim is that the back door is still open. United are among the favourites to win this season’s Europa League and, starting on Thursday night against Real Sociedad, they are seven games away from automatically securing a place in next season’s Champions League.

And amid a climate of belt-tightening and penny-pinching at Old Trafford, after years of wasteful spending on transfers and wages, United need the financial rewards that playing Champions League football brings to help balance the books.

The Premier League campaign may be as good as done, but United’s remaining European games are among the most important in the club’s recent history.

How much has missing out on the Champions League cost United?

No Champions League football damages United commercially, not only making the club a less attractive prospect to potential sponsors but also allowing existing partners to claw money back.

During the summer of 2023, United renewed their partnership with kit supplier Adidas until 2035 in a deal worth £90m ($114.3m) per year. As part of the extension, a £10m deduction can be made in every season that United do not qualify for the Champions League.

This clause replaced a similar provision in the previous £75m-per-year Adidas deal, which applied a 30 per cent cut if United spent two or more years outside of Europe’s elite.

United always managed to avoid going two consecutive years with no Champions League football under the old deal’s terms, narrowly escaping a deduction by winning the Europa League in 2017 and securing a top-four finish on the final day of the 2019-20 season.

And fortunately, United also avoided a £10m penalty this season under the terms of the new deal because the clause is only effective from the 2025-26 campaign onwards.

It is now almost certain, however, that unless Amorim’s side win the Europa League, a deduction will be applied to the Adidas deal for the first time next season.

Putting the commercial impact to one side, though, United would be hit hardest in terms of broadcasting and matchday revenues, as the club helpfully illustrates every year in their annual report for potential investors.

United’s combined European-related matchday and broadcasting revenues during the post-Sir Alex Ferguson era reflect the inconsistency on the pitch.

The run to the quarter-finals during the 2018-19 season — courtesy of that epic last-16 win over Paris Saint-Germain — generated a healthy £93.1m in European-related revenues, United’s highest of the past decade.

But as Ole Gunnar Solskjaer’s side failed to achieve a top-four Premier League finish that year and only qualified for the Europa League, that figure fell to just £20.9m in the following season.

This particular drop-off was exacerbated by the Covid-19 pandemic, which caused United’s Europa League knockout ties to be played behind closed doors after the end of the financial year, but similar falls occurred in other seasons when United played outside of Europe’s elite club competition.

This season is still in progress, but so far, without Champions League football, United’s total broadcasting revenues have fallen by more than a third — from £145.7m to £92.9m — in the first half of the campaign compared to the same period last year.

United need to return to the Champions League because that is where the money is, especially under the new, 36-team format introduced earlier this season.

How much would United earn from playing in next season’s Champions League?

With more games than ever before, UEFA increased the total amount of money distributed to clubs competing in the Champions League this season to €2.47billion (£2.04bn; $2.59bn), up from €2.03bn under the old format.

Much of that is paid out on the basis of a club’s historic European performances and their share of the broadcasting market through what UEFA calls the ‘value pillar’.

It is difficult to say precisely how much United would earn through the value pillar next season as the exact amount depends on which other English clubs qualify, the size of each European broadcasting market, and the ever-shifting five-year and 10-year coefficient rankings.

This season can be used as a point of comparison, though. Had United qualified for the Champions League this term, they could have expected a value pillar payment of approximately €40m.

That wouldn’t be all. Every club that qualifies for the Champions League receives an €18.6m participation fee, then earns more on top of that based on performances.

In the league phase, clubs receive €2.1m per win and €700,000 per draw. There is also another €275,000 for each place they finish in the league phase standings, up to a maximum of €9.9m for coming top, plus a €2m bonus for finishing in the top eight and a €1m bonus for finishing between ninth and 16th.

United have reached the knockout stage of this season’s Europa League (Andrei Pungovschi/AFP via Getty Images)

Much more is to be had from the knockouts onwards, with substantial sums paid for progressing through each round.

The two finalists will accumulate €57m each in performance-related payments alone, with an extra €6.5m paid to the winner. A perfect run through the competition would earn a club €110.8m, plus its share of the value pillar.

Now, even if United qualify for the Champions League, nobody would expect Amorim’s side to faultlessly sweep away all-comers on the way to Bruno Fernandes lifting the trophy in the Budapest final. But because of their historically strong coefficient, even abject failure would be handsomely rewarded.

Crashing out of the league phase next season would still likely see United pocket between €50m-€60m through the participation, performance and value pillar payments combined. A reasonable run to the round of 16 or quarter-finals would generate even more than that.

How much would United earn from winning this season’s Europa League?

Winning the Europa League would also bring a welcome financial boost in itself, but there is significantly less prize money on offer when competing in European football’s second-tier club competition.

United have already earned at least €12.2m from their Europa League run so far through participation and performance-related payments. If Amorim’s side go on to win the final in Bilbao in May, they will secure another €19.7m on top of that.

As with the Champions League, there is the value pillar, too. According to an estimate by football finance analyst Kieron O’Connor’s Swiss Ramble newsletter, United will receive another €10.6m through broadcasting and coefficient-based payments.

Altogether, United will pocket around €42.5m from UEFA should they go all the way in the Europa League this season, plus another €4m for reaching next season’s Super Cup and an extra €1m for winning it.

And yet, that is no more than they could expect to receive for falling at the first hurdle in the Champions League. All the clubs eliminated from this season’s Champions League play-off rounds should earn more than United in Europe this season, no matter how far Amorim’s side go.

That only goes to show the disparity in financial rewards between UEFA’s two leading club competitions and why for United and any elite club, Champions League qualification is of paramount importance.

How could United make up for the loss of Champions League money?

United offset the damage of missing out on Champions League revenues by applying a 25 per cent cut to the majority of salaries across the first-team playing squad.

And, although there is nothing like the same money on offer for competing in the Europa League, those revenues have at least helped to bridge some of the gap in the past.

But the 25 per cent cut is already in effect this season, while United’s dismal results mean they may not even have the Europa League to fall back on next term.

United slipped into the red the last time they spent a season out of Europe, posting a small £895,000 loss back in 2014-15. After trophy-laden decades of success on and off the pitch, the club was able to stomach the financial hit, stay competitive, and a typically busy summer transfer window followed.

Yet after five consecutive years of losses, totalling £373m, that is no longer guaranteed. If you want to consistently spend like a Champions League club, you need to consistently be a Champions League club. For United, qualification is arguably more vital than ever.

(Top photo: Kristian Skeie – UEFA/UEFA via Getty Images)