What's The Difference Between Winning A Title, Coming Second, Or Last In Football Financially?

Mulan

Apologies for the long title but there really wasn't any other way for me to phrase it. Let's explain it: financially speaking, is there a big difference between ending the season first or second in the league? Is there a big difference between winning the UEFA Champions League title and losing the final? This question came to me out of curiosity after watching Liverpool lose twice in the Champions League final and missing on winning the league twice on very few points.

Let's separate the answer into three categories:

Direct Financial Rewards From the Organizers

Here we speak of the Football Association Premier League Limited (The Premier League) and the Union of European Football Associations (UEFA). The answer here is actually pretty straightforward as there's little difference between winners and second place.

Last season's UEFA Champions League saw Real Madrid making merely 4.5 million euros more than Liverpool when they won. Put in mind that Real Madrid made about 85-90 million euros in total, so it's really not that big of a difference. Also, Manchester City and Villareal made 8.5 million less than Real Madrid, so even that difference isn't that big. That's as far as the UEFA Champions League is concerned, the Premier League is a bit more complicated.

The Premier League follows the 50-25-25. This goes as the following

  • 50% of the revenue from broadcasting networks shared equally among the participating clubs

  • 25% is shared on the basis of where each team ended the season

and

  • 25% is shared based on the teams with televised matches, and those differ depending on how many games per team.

Before we proceed, let's explain the last one a little bit. Not all Premier League matches are televised, Some of the matches happen at 3 PM in the UK which falls under what is known as "Blackout Rules" where it's illegal to broadcast games during that time. Why those rules exist is another issue.

Still, the difference in the last is way too small to matter. As for the first one, there's no difference whatsoever. As for the second one, that is where the most difference occurs and as you probably expected, the difference isn't that big there either.

In the second one, it falls under one, nonnegotiable, golden rule:

The formula would cap the ratio between the maximum and minimum a club received at 1.8:1 (the highest-earning club receives 1.8 times the amount received by the lowest-earning club).

What does that mean? Well, if the first makes 18 million, the last won't make less than 10. If somehow the calculation left out some extra cash, it will also be distributed accordingly with the 1.8:1 rule. That's the difference between first and last, the situation is obviously different between first and second in the league.

According to The Athletic, the difference between every position and the one before it equals around 2.2 million pounds. So, the difference is barely noticeable financially in terms of direct rewards from the Premier League itself. Now we move to the next category:

Sponsorship Deals

This is the part where the biggest difference in payments occurs. However, it is very complicated as it depends on the club's situation during the time the deal was signed. Arsenal, for example, has bonuses in the club's sponsorship deals in case they qualify for the UEFA Champions League, a team like Real Madrid doesn't because qualifying for the UEFA Champions League is an obvious part that already exists in the club and it would take a disaster for Real Madrid not to qualify.

So, sponsorship deals depend on the logical target of the club.

Another big difference comes from shirt sales, if Addidas or Nike are selling a shirt with the Clubs' World Cup logo on it, it would obviously be more expensive than one without it. The same thing applies to teams who have won the league.

How big is the difference? That difference is around 10-30% and that comes with higher sponsorship money going toward the club because, unlike the popular myth, no player pays his fee from shirt sales, it's the manufacturing company that makes the money and only pays the clubs based on the contract and what they win not who they sign.

The final part is the trickiest:

The Lurking Factor

This is not about a title per see, but rather the story behind it. What matters here is the story you create when winning the title, or even how you lose it. What's the story that you, as a club, presented in your journey to win the title whether you won it or not? This story will affect the sympathy you receive whether as a winner or a loser as it would mean people are likely to watch you more or less depending on that story.

There are types of defeats that actually lead to more sympathy and admiration toward the losing side than the winning side. Sometimes they would even result in anger toward the winning team, which would mean the losing club would
actually, manage to size down its losses in the long term. Liverpool and Manchester City are great examples of that.

Manchester City has failed miserably in establishing an attractive narrative while dominating the league, the opposite happened with Liverpool. Put in mind that I am not talking about reality, but the narrative. An example of that would actually be Arsenal at the moment.

The narrative in Arsenal's current title chase paints them as minnows in a world of oil monarchs and rich sharks in football, that's the narrative. The reality is that Arsenal has spent over 500 million in net spending during the last few seasons. That's narrative vs reality, the latter doesn't matter at all because you're not attracting the few people who care about these details but rather the common football watchers who don't notice nor care about the reality.

So, applying this to the Manchester City vs Liverpool situation, people would mention that Liverpool's wins, while few and far between, are much more valuable than Manchester City's. Narratives have good vs evil, and in this case, Liverpool is the good and Manchester City is the evil. As ridiculous as that black vs white narrative can be, it still sells.

Liverpool also has a catching phrase in "Intensity is our identity", meanwhile no one gives two fucks about Manchester City's identity being possession. In fact, possession is the most trolled term in football nowadays. I am not buying into either narrative, just to be clear, I am just saying that's what the narratives are and how it is seen.

Narratives are instilled within people, and that's where Liverpool won as narratives are actually a great long-term return even when it ends in failure during the current season. That's why you see clubs that stopped winning titles a long time ago yet still have strong and growing support.



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