Inside Rangers Champions League prizes, pitfalls and progression route

RANGERS FINISH 2ND IN THE SPFL

Rangers have now officially failed in their primary objective – to win back the Scottish Premiership title.  Phil Clement came in and undoubtedly improved them for large periods – they were 11 points behind Celtic when they took the field on 3rd December at home to St Mirren, and at one stage they became the bookies favourites to win the league as they regained top spot, but again they have ultimately fallen short.

WHY IS CHAMPIONS LEAGUE INCOME SO CRUCIAL?

Rangers’ wage bill for year ending June 2023 was £64m. £4m MORE than Celtic - for the first time in years. The squad was overhauled last summer and so that may have changed slightly for year ending June 2024, but in a period where wages have the biggest correlation to success (PSG, Real Madrid and Man City have the biggest wage budgets in Europe) it will be worrying for Rangers fans who will rightly feel they are not getting bang for their hard-earned buck. Last summer, the board backed Michael Beale with a £21m summer spend – which was a £13.1m net spend after some money was recouped through the sales of Kamara, Colak and Sakala.

A net loss of -£4.2m was reported last year – despite raising £23.6m in player sales through Aribo and Bassey, as well as receiving £18.5m as they returned to the Champions League. To still report a small loss after such a stellar year of £84m revenue is ominous for the Rangers fans as it means the likelihood of an even bigger loss reported towards the end of this year, while they look on with envy at the £33m record profit being recorded across the city last year.

Celtic will be the last beneficiaries of the automatic champions league slot by winning this year’s title as Scotland has slid to 11th in the coefficient rankings – and likely to fall further next season. Although if Rangers win next season’s title they would still receive automatic entry to the goldmine of the Champions League due to their own club coefficient; but it is almost a moot point at this stage as what is more important is the major rebuild that – by the manager’s own admission – is required this summer.

Although none in the same ballpark as the transfer fee Celtic will likely receive for Matt O’Riley, Rangers have some sellable assets that Clement will look to move on to fund new signings. Fringe and players out on loan such as Sam Lammers and Ianis Hagi will almost certainly be sold and if an eight-figure bid is received for excellent keeper Jack Butland then almost certainly he will be out the door too.

The transfer window closes 4 days after the Champions League Playoff round. Although those qualifiers will have a massive bearing on Rangers financial situation, their fans will hope that the investment and recruitment is all complete well before that point, to maximise their chances of reaching the Champions League Phase. It won’t be an easy task, but the pound signs on offer are huge.

THE FINANCES ON OFFER

The €3.317bn UEFA prize money for the competing clubs is split across the three competitions 74.38% (€2.467bn) to Champions League, 17.02% (€565m) to Europa League & 8.6% (€285m) to Conference League. Rangers absolutely want to be dining at the big table that will be sharing in the 75% slice of the pie.

The new format Champions League revenue is broken down into three streams:

Starting fee (equal for all 36 clubs): €18.62m
Value Pillar: €1.28m-€46m per club (36 shares)
Performance: €2.1m per win & €0.7m per draw; €0.275m for finishing 36th & €9.9m for finishing 1st

Should Rangers get through two rounds of qualifying, their high club coefficient (they are the 26th ranked side in Europe) will see them rank significantly higher than the 59th ranked side in Europe – rivals Celtic - in the 36 team “Value Pillar” ranking (broken down in detail shortly)

Where I predict Celtic’s value pillar share would be worth around €14m (giving them minimum earnings of €34m), Rangers club coefficient should see them earn around €23m through this revenue stream and so their guaranteed minimum Champions League earnings would be around €43m. That’s nearly £40m, before ticket sales, even for finishing dead last in 36th place with 0 points in the UCL. If Clement’s rebuild is successful and Rangers find they are successfully competitive in some of their 8 league phase matches, then even by finishing 24th, and just inside the knockout spaces they’d take their total to at least €52m – before ticket or commercial revenue - with a further €11m on the line if they went on to win their two-legged knockout tie and reach the last 16.

24th in the Champions League would be worth around €30m more than finishing 24th achievement in the Europa League. It’d be worth more than €20m more than even finishing FIRST in the Europa League – the gulf in finances between the two competitions is bigger than ever.

THE FINANCIAL REWARDS OF RANGERS’ HIGH COEFFICIENT

The third stream used to distribute UEFA’s revenue, the Value pillar, is new this season and is a combination of the previous 10-year club coefficient and market pool streams. It is fairly complex and is the only revenue that is NOT awarded based on final league position. It is instead awarded based on where a club ranks across two parts: the “European Part” and the “Non-European Part”. The entire value pillar pot (€853m in UCL) is then split by a certain % between the two parts.

That % split between the two parts is essentially based on WHERE in the world UEFA’s media rights income comes from, i.e. if 75% of UCL media rights income comes from European countries and 25% comes from the rest of the world, then the European part will be worth €640m (75% of the total value pillar pot) and the non-European part will be worth 25% (this % split will be announced in the summer)

The European-part

In the European-part, likely to make up the bulk of the money, all 36 clubs are ranked based on their average from two rankings - the media market ranking + the 5-year coefficient ranking. For media market ranking - the participating clubs’ countries are ranked based on their domestic broadcasters’ contribution to the overall UEFA media revenue for the whole cycle in that competition.

I.e. for the UK, how much did the tv Broadcasters pay for the European football rights - and where did that amount rank compared to what other countries broadcasters paid. All clubs within that country are ranked beside each other in the media market ranking, e.g. if England are ranked as number 1 for media rights contributions, then their 4 clubs will be ranked 1-4 out of 36 teams.

This is advantageous to clubs like Aston Villa, who based on 10-year coefficient alone would have received a much smaller payment this year (Newcastle were one of the lowest), but next season they would be ranked 4th in the media ranking despite not being in the Champions League for decades. The rest of the countries follow on from there, so if Germany were ranked as the number 2 country in media market ranking, then their 5 clubs will then be ranked 5-9, and so on until all 36 clubs are ranked.

The second aspect of the “European part”, the 5-year coefficient ranking, is much simpler – the clubs are ranked from 1 to 36 based on UEFA 5-year coefficient ranking applicable at the start of the season.

The overall ranking of the “European part” is then determined by the average of these two rankings (e.g. the club 4th in the media market value ranking & 6th in the club coefficient ranking would have an average of five points in the cumulative ranking)

The Non-European Part

Thankfully this, smaller portion of the value pillar, is much easier to work out - these shares are distributed based on the TEN-year UEFA coefficient ranking of the 36 clubs (no longer adding points for historical trophy wins, which will massively affecting historically successful clubs such as AC Milan)

UEFA’s ranking of all 36 clubs will only be announced towards the end of the summer once we know which countries will be competing in each competition and more importantly - the value of each countries TV rights packages is finalised. The good news for Scottish teams is that for European football, our ranking is based on roughly 10% of the overall UK media rights – solely TNT over the last few years.

However, with Amazon (17 Champions League matches on Tuesday) and BBC (Wednesday night highlights package) joining TNT Sports in purchasing the UK rights for a combined £500m per season, even with just a 10% cut, our ranking will likely be higher than some bigger footballing nations like Portugal or Netherlands. Coupled with Rangers high club coefficient – it should lead to a relatively high ranking within the 36 teams and a bumper payday for Rangers, if they can just overcome two massive qualifying rounds. Let’s discuss how difficult that could be.

RANGERS ROUTE TO THE LEAGUE PHASE

Club Brugge reaching the Conference League semi-final threw up an unexpected complication to Rangers’ route to the Champions League. The Belgians overtook Rangers by 1 coefficient point (64 to 63), meaning that Rangers are no longer guaranteed to be seeded for both their qualification rounds.

The domestic leagues are not yet finished so things can change, but if Clement’s old team finish 2nd in Belgium, then they too enter Champions League qualifying with Rangers. Benfica who finished 2nd in Portugal, also enter qualifying and will have the highest coefficient in qualifying. That means if Bayer Leverkusen complete their invincible season and win the Europa League final they then vacate their ‘title holder’ automatic Champions league spot. This is because they have already qualified for the UCL through their domestic position and so this spot would instead go to the highest ranked club in qualifying, Benfica, and they’d skip qualifying altogether.

Rangers want Leverkusen to win that final– because not only does it remove Benfica as a possible opponent in qualifying, but it guarantees Rangers would be seeded in both rounds. Club Brugge finishing either 1st or 3rd in Belgium, and not entering UCL qualifying, also provides that guarantee.

Rangers will enter in QR3 where there will be 4 ties – Rangers will definitely be one of 4 seeded teams and assuming no Benfica then as it stands the other 3 seeded clubs (that Rangers cannot face) would be Club Brugge, Slavia Prague & Salzburg.

If Leverkusen lose the final and Benfica therefore ARE in qualifying then Salzburg (or Sturm Graz) would be added to the list of potential unseeded opponents which will be one of:

4th in France (Lille or Brest), 3rd in Netherlands (Twente or AZ Alkmaar) and two QR2 winners – likely Fenerbahçe and Salzburg.

Taking the optimistic route and assuming Benfica are not in qualifying, then the assumption would be that from QR2 teams both seeded teams (Fenerbahçe & Dynamo Kyiv) are victorious and would make up the 4 QR3 teams. All present difficult ties for Rangers – but the Gers would look to come through this round unscathed. Fenerbahçe would probably be the most difficult tie – they’ve invested lots of money and can still finish the Turkish league on 99 points and not win the league behind Galatasaray.

That tie would in theory see an interesting story line in the return of Ryan Kent to Ibrox – but he’ll likely leave the Turks in the summer after making only 8 league appearances – often for less than 10 minutes - and hasn’t been in a matchday squad since February because he was not registered in their league squad after the January transfer window.

The playoff round will be more difficult. Although the good news is that as part of the new format the French 3rd team now enters the league phase automatically and doesn’t enter qualifying (last season this was Marseille) and the Netherlands have moved up in the coefficient rankings, so their 2nd team also enters automatically and doesn’t enter qualifying – last season this was PSV who of course eliminated Michael Beale’s Rangers with ease.

No Benfica means Rangers & Brugge would be the seeded teams if they reach the playoff rounds – and the unseeded opponents will be the winners of the two other QR3 ties, leaving likely opponents of Slavia Prague or Salzburg, but also the possibility of Fenerbache, Dynamo Kyiv, Brest or Twente - if any of them can cause a QR3 upset.

If Benfica unfortunately ARE in qualifying, and themselves & Club Brugge both reach the playoff round - then they will be the two seeded clubs and one of them will be Rangers opponents.

The key to Rangers’ success here may well be unseeded teams causing an upset - Lugano winning their QR2 tie and Twente winning their QR3 tie for example, could see Rangers in a fortunate position with a much less challenging route to the League Phase. The draws for each round are made before the previous round has been completed – so before Rangers play their QR3 tie they will already know who lies in wait in the playoff round.

I’ve simulated a ‘luckiest’ and ‘unluckiest’ route to the league phase (with and without Benfica) which is obviously dependent on firstly the Europa League final (a Leverkusen win means no Benfica), the results of QR2 (the round before Rangers enter) and of course who Rangers are actually drawn to face:

IF THEY LOSE EITHER ROUND

If Rangers are eliminated in QR3 they go into the Europa League Phase as a pot 1 team, although pots do not matter as there is no competitive advantage to being in a higher pot in the new format. Rangers fans may see their team earn more plaudits by winning more games in this competition but financially the earnings pale in comparison to the Champions League.

The Europa League is worth an absolute MINIMUM €4.7m for each of the 36 Europa League teams, broken down by:

Starting fee (equal for all 36 clubs): €4.31m
Value Pillar: €0.29m-€10.69m per club (36 shares)
Performance: €0.45m per win & €0.15m per draw; €0.075m for finishing 36th & €2.7m for finishing 1st

In addition to this guaranteed minimum of €4.7m, Rangers would (to be confirmed in the summer following UEFA’s ranking of media deals) earn at least €7.5m through the value pillar, giving their minimum of €12m. That’s their minimum for not earning a point, finishing 24th for example with 8-10 points would add at least another €2.5m. They’d have to finish in the top 8 teams to earn €20m from the league phase.

Some Rangers fans would likely optimistically target a top 8 slot in the Europa League, bypassing the knockout round to go straight into the last 16. It’s hard to tell at this stage how likely that would be, but below you can see a retrospective and ‘theoretical’ 32 team league table based on THIS season’s Europa League results after 6 matches (it will be 8 in the new format). It is a slightly flawed example, because the new format is completely different, with 4 more teams and 2 more matches, and we cannot accurately project how many points will actually be required to finish in the top 8 of the Europa League.

However, if we crudely create a ‘league’ table based purely on points won in this season’s 32 team Europa League, by simply amalgamating the 8 individual group tables we can see that although Rangers win in Betis was historic and a fantastic achievement to win that group – their 11 points collected was bettered by 10 other teams in the competition, and their goal difference would hypothetically rank them 13th out of 32.

If Rangers are to drop down to play in the Europa League, then they’ll want to at least win QR3 and reach the Champions league playoff round; as they will also receive the CL playoff elimination fee of €4.28m (less than last season’s €5m due to the €30m elimination pot split between 7 teams at this stage this year instead of 6)

HOW DO THE NEW TOURNAMENTS WORK?

Rangers will have 8 league matches in either one of the revamped 36 team league tournaments.

For both tournaments there will 4 pots of 9 teams. All 36 teams is drawn to face 2 teams from each of the 4 pots (8 different opponents that you play only once), so even as a pot 1 Europa League side, or a pot 2 Champions League side, there’s no competitive advantage to Rangers anymore - they could draw the same 8 opponents as they could if they were a pot 4 side.

It’s one team at home & one team away from each pot, so if they for example reach the Champions League and draw Real Madrid and Man City from pot 1 they could be away to Real Madrid and home to Man City. Both competitions play the final two game weeks towards the end of January and so “European football after Christmas” is already guaranteed for Rangers. Knockout football in February is the new aim.

Everyone that finishes 9th-24th in the league plays a two-legged knockout tie, with the winners joining the teams that finished in the top 8 in the last 16. Everyone from 25th-36th is eliminated from Europe, with no more drop downs to lower competitions.

CAN RANGERS ACTUALLY COMPETE IN THE CHAMPIONS LEAGUE?

Rangers rightly get praised for their European performances over the last 5 years. It is the strongest sustained period of fantastic European performances by a Scottish team for decades. It’s also bit of a misnomer that detractors like to attribute Rangers performance solely down to the fact that Rangers are always in a weaker competition, the Europa League and Celtic are always in the stronger Champions League.

Although true of recent seasons, the coefficient is calculated over 5 seasons, and of the last 5 seasons Celtic have been in the Europa League 3 times & Rangers in it 4 times. Celtic have reached the knockout rounds of the Europa League only once while Rangers have reached the knockout rounds every time. Rangers have been producing European performances undoubtedly above expectation, and they will sincerely hope their 2022/23 0 point Champions League aberration under Gio was a one off.

Firstly, the fact that they would now play two pot 4 teams for the first time, one at home and one away, should give real optimism that there would be a chance that they can be much more competitive than last time and be targeting decent results from those two matches.

The fact that both Germany and Italy are on the verge of entering SIX teams directly into the league phase (if Dortmund and Atalanta win their respective finals) might give Rangers the chance of getting lucky in the league phase draw - by facing the 6th best side from these countries instead of the 1st or 2nd best. Although Frankfurt or Roma or Lazio are good teams and would be difficult ties, they are not the champions Bayern Munich or Inter Milan and so may offer a more realistic chance of a big result under the lights in one of the four league matches at Ibrox this season. Let’s hope so.