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Last Updated: Thursday, 11 January 2007, 06:14 GMT
Euro cash fear for English football clubs
By Bill Wilson
Business reporter, BBC News

Liverpool captain Steven Gerrard with the Champions League trophy
Champions League victory can bring wealth as well as prestige

The big four English football clubs - Manchester United, Chelsea, Arsenal and Liverpool - are looking forward to 2007 providing them with even more riches.

New revenue streams and investment capital for the quartet seem inevitable, as they look to match their on-field endeavours with new financial goals off it, maximising income from as many sources as possible.

All four are in the second phase of the lucrative Champions League, and a new Premiership TV deal will kick in this year.

But a well-timed tackle from across the English Channel, in the form of ex-French international player Michel Platini, could later this month upset the financial plans of at least one of these major footballing brands.

Power struggle

In London Chelsea has been launching its new Chinese-language website as part its world domination plans, while Arsenal is reaping the extra ticket and hospitality income from its new, bigger, Emirates Stadium.

In the North West, Liverpool is chasing a potentially lucrative takeover deal with Dubai International Capital (DIC), while at Manchester United the Glazers are still taking in the fact that the new TV Premiership deal goes well beyond their wildest expectations.

The big four clubs should be very worried about this, even if any changes take time to implement
Harry Philp, Hermes Sports Partners

The new Premier League TV deal for 2007-10 will see a 65% increase in Premiership TV money for every top flight club, according to Barclays Capital.

But before then, there is the little matter of the election for the post of president of European football body Uefa, with Platini taking on incumbent Lennart Johansson.

And the manifesto of the former three-times European Footballer of the Year will be causing some sleepless nights at Stamford Bridge, Old Trafford, Anfield and Emirates Stadium.

For part of his proposal is to reduce the number of Champions League positions available to a maximum of three per country.

'Big business'

"Let us introduce a maximum limit of three clubs qualifying directly from each country, to enable more nations to take part," midfielder-turned-administrator Mr Platini says.

Michel Platini at a function organised by the Ukrainian Football Association
Michel Platini has pledged to alter the Champions League set-up

That would lead to the loss of one Champions League place each in England, Italy and Spain, which currently enjoy four slots, with the three places released available to other countries.

The Champions League is the money-making machine of modern football and it is crucially important for leading European clubs to be part of it.

It is not just the TV income, ticket revenue and prize monies, though they are very lucrative - it is also vital in terms of a club's profile, merchandising and sponsors.

"The Champions League is big business, with the rewards growing the further you go in the competition," says Harry Philp, an analyst at Hermes Sports Partners, which advises clubs and businesses on football finance issues.

The Champions League is such a powerful machine for Uefa that it may be difficult to ultimately move and change things
Xavier Riviore, France Football

"In return for votes from emerging European nations, Platini is promising them more access to the Champions League.

"The big four clubs should be very worried about this, even if any changes take time to implement.

"We have four big guns in England and someone is going to lose out on up to 30m a season if Platini is elected."

'Shrewd move'

When Liverpool won the Champions League in 2005, they earned 20.5m. Chelsea, which reached the semi-final that year, earned 18.8m.

Last season, Arsenal made more than 25m from their run to the Champions League final.

And Manchester United's failure to qualify from the group stage in 2005/06 is estimated to have cost them up to 20m in prize and appearance money, ticket sales and broadcast revenue.

Arsenal (yellow) play Barcelona in the 2006 Champions League final
Arsenal made more than 25m from their Champions League run

It is that money that the top English clubs want to hold on to.

So they will be gladdened to know that some observers believe change in the Champions League will not come easily.

Xavier Rivoire, a Paris-based writer for respected French publication France Football, says: "Platini has been quite shrewd in targeting the smaller nations.

"However if he wins and moves to go ahead with cutting Champions League places for the larger nations, I do not think it will happen in the near future.

"The Champions League is such a powerful machine for Uefa that it may be difficult to ultimately move and change things."

The crucial vote is being held in Duesseldorf, Germany, at the Uefa Congress on 25 and 26 January, with well-placed insiders intimating some of the UK national associations may be favouring Platini.

Wages proposal

As well as the lurking Champions League issue, other possible financial pitfalls face the big four.

At Liverpool, the proposed takeover has still to be completed and looks like becoming more of a Glazer-style deal - largely funded by debt, than an Abramovich-type deal, which sees a benefactor pouring limitless cash into the club.

I don't divide soccer between the rich and the poor
Michel Platini

Whatever the final deal though, it appears it will not be the 450m straight equity injection that had initially been envisaged when DIC first expressed an interest.

Meanwhile Chelsea may be on the receiving end of Uefa proposals, in line with the recent Independent European Sports Review, to limit a club's wages to an as-yet-unspecified proportion of turnover.

Ronaldo of Manchester United (l) clashes with Ballack of Chelsea
Top English clubs may also be facing restrictions on wages

If Uefa take the issue to the EU, it could end the unlimited transfer budget available to Chelsea.

And Arsenal - which went heavily overdrawn to build its Emirates Stadium - and Manchester United, have to keep servicing their debts, which could leave them unable to financially compete for the services of the best global players.

Now all four are waiting to see if Platini - who says "I don't divide soccer between the rich and the poor" - is about to disrupt their income from Champions League football.




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