Manchester City’s Champions League exit at the hands of Real Madrid means the club will receive around £36million ($45m) less from UEFA than they did for reaching last season’s quarter-finals.
City earned around £90million from UEFA last season, including around £3.3m for winning the Super Cup in 2023, but it is estimated they will earn around £64m from this season’s group stage and play-off round.
Champions League revenues are distributed in three ways; an “equal share” split between all participants, a “value pillar” — a somewhat controversial mechanism that rewards teams based on how successful they and their country have been in the competition in the past, regardless of the current season — and a performance-related sum, which is variable.
Due to City’s previous success in the competition, their value pillar meant they banked around £3.9m more than Aston Villa from the group stage, despite Villa finishing eighth and City finishing 22nd.
Given group-stage victories are worth around £1.7m each, and draws £579,000, City missed out on several million from the five matches they did not win. They won three of their eight matches, whereas last season they won all six in the previous format.
City received a modest £828,000 for making the play-off round, but would have received an extra £9.3million had they beaten Madrid and reached the round of 16. Teams reaching the quarter-finals receive a further £10.6m, which means that an extra £19.9m would have been available had they matched last season’s finish.
There is a further £12.7million up for grabs for clubs reaching the semi-finals and at least £15m for reaching the final.
Matchday revenues will be similar to last year because City actually played the same number of home matches; the expanded format offered one extra group game, plus the first leg of the play-off against Madrid. City made £75.6million from 26 home matches last season, according to their most recent accounts, which works out as £2.9m per game.
If there is a silver lining to their elimination it may be that City can now focus on getting their domestic season on track and securing Champions League football for next season.
While City are undoubtedly worse off for exiting the competition earlier than expected this season, the lost income is nothing compared to failing to qualify for the competition at all.
The total prize pot for the Champions League this season is more than £2billion, whereas the total amount for the Europa League is £467.7m.
Premier League clubs also receive an extra £2.8million per place, meaning City would earn an extra £5.6m for finishing fourth compared to sixth, for example.
City have generally coped well with the demands of reaching the latter stages of the Champions League and the FA Cup while trying to win the Premier League, famously winning the treble in 2023. But they have often come unstuck in the FA Cup semi-finals after a difficult European assignment, and last season their domestic pushes did seem to benefit from an earlier European exit than the previous three campaigns.
Given their continuous injury problems this season, not having to juggle resources for difficult Champions League matches could help them find their feet. Although they were knocked out by Madrid, there were green shoots of recovery against Newcastle United at the weekend, with new signings helping to add an extra dynamic.
As long as City secure qualification for next season’s Champions League, their overall financial health will not be catastrophically affected by this season’s early exit, which will be somewhat cushioned by the large profits the club have posted in recent years.
Kylian Mbappe scored in both legs of the play-off tie for Real Madrid (James Gill – Danehouse/Getty Images)
Over the past four seasons, City have recorded profits of £199.2million, including £73.8m last season, meaning that while this year’s dip is far from ideal, especially for a club so focused on its business performance — senior employees get bonuses directly related to the club’s financial growth — the lost income can be absorbed somewhat.
It is unfortunate for the club, though, that their underperformance comes at a time when they have decided to invest in a squad overhaul — although it could be argued that the two are linked. While prize money has been a huge contributor to City’s profits in recent seasons, the biggest source of income has been player sales.
Put simply, City have received more money on transfers than they have spent over the past five years. That is due to selling academy prospects and first-team players as well as relatively low investment in the squad. Last summer, for example, they signed Savinho for £30.8million and signed Ilkay Gundogan on a free transfer.
City had planned to strengthen their squad this summer, but their struggles at the end of 2024 convinced them to bring some of those plans forward, leading to them spending £178million in the winter transfer window. The expectation is they will continue to strengthen ahead of next season.
They will have extra headway due to Julian Alvarez and Joao Cancelo leaving past the June 30 accounting deadline, meaning the fees received for them, totalling around £100million, will be counted in the same accounts as the January incomings, as well as any business done before the end of June this year.
As City are likely to spend more on transfers than they bring in during the current accounting period, their profits are likely to be eaten into significantly given their early Champions League exit.
(Top photo: Michael Regan/Getty Images)
