New TV audiences keep Champions’ League afloat

As the tackles slide in from clubs, fans and sponsors, Tom O’Sullivan wonders how long UEFA can continue to satisfy every interest in European club football

Back in September the two-week-old competition was described as “a fiasco”. But as Real Madrid and Valencia lined up for the Champions’ League final this week, UEFA was counting its money, and hoping for an even brighter future for the most lucrative club competition in the world.

Meanwhile Michel Zen-Ruffinen, the general secretary at football’s world governing body FIFA who made the “fiasco” jibe, was unavailable for comment. Zen-Ruffinen’s and FIFA’s objection was that the expansion was leading to saturation coverage on TV, but its response was to launch yet another tournament, the meaningless World Club Championship.

UEFA’s controversial decision last year to expand the competition from 24 to 32 clubs had little to do with football and everything to do with money. It was a direct response to an attempt to establish a breakaway European super league, proposed by an Italian firm called Media Partners and supported by some of Europe’s top clubs. UEFA came up with a new structure that gave the clubs more money, broadcasters more European football to show, and sponsors more chances to sell their beer, burgers and car tyres. Everyone was happy.

The changes diluted the competition by introducing relatively weak teams, while devaluing the UEFA Cup, now the only other European club competition. It took a competition seen as special and turned it into one with 17 big nights for Europe’s TV companies to exploit, though featuring the likes of Norway’s Molde and Slovenia’s Maribor.

Supporters reacted by staying away. For its first round matches Real Madrid averaged gates of just 26,000. But TV audiences in the key European markets of the UK, Germany, France, Spain and Italy have kept broadcasters happy, even if they too will demand changes before the preliminary rounds of the competition kick off again in August.

Viewers are becoming used to seeing teams such as Real Madrid, Barcelona and Italy’s Juventus and Lazio. There is a danger that the blanket coverage will make the fans more complacent and the games more mundane.

In the UK the rights were shared between ONdigital – jointly owned by Carlton and Granada – and ITV. ONdigital used the rights to drive subscription rates to its digital service. A more graphic example of the value of the TV rights arose in Germany, where the Murdoch-owned broadcaster PM3 had a market share of only 0.5 per cent before outbidding the main broadcaster RTL for rights to the Champions’ League. For the first week’s action, PM3 attracted 5.4 million viewers, giving it a larger audience in one night than it had managed in the previous six months.

But the expansion – and the competition from Media Partners – meant that more income was needed. And so the final was a swansong for some of the best-known sponsors in football. McDonald’s, Canon, Continental and Nutella – Champions’ League sponsors for several years – all balked at paying &£12.5m a season where they had been paying &£5m.

Team Marketing, which sells the broadcast rights and sponsorship for all UEFA’s properties, argues that the sponsors are getting more games and therefore more exposure. But it will be interesting to see what more UEFA can give these remaining four – Ford, Mastercard, Amstel and Sony – except more exclusivity and less clutter around their on-screeen credits. According to the rule of thumb that a sponsor must spend at least the same amount again on other marketing activities to fully exploit a sponsorship package, they will be spending &£75m over three years to exploit the property. And they will be highly demanding sponsors.

But on Thursday morning UEFA will be working out how to dish out the 828m Swiss francs (&£334m) raised by its existing sponsorship and TV rights contracts. The winning club will earn more than &£15m from its exploits – before adding the monies raised from home gates and bonuses from sponsors. The club will also get a place in next year’s competition – the most lucrative gravy train in club football.

UEFA has shown that the expanded Champions’ League is shrewd business if not always good sport. But can it be sustained?

Speculation that Rupert Murdoch was behind plans for an alternative European league ran out of steam after just one day, indicating that UEFA is still in the driving seat. But it must make the early rounds more entertaining. If the competition has proved anything, it is that there are not 32 teams in Europe worth watching on a regular basis. Some of the early games were pointless affairs played out in front of half-empty stadiums – and without the knockout element that gave underdogs any chance of progressing. The competition only came alive with the quarter-final knockouts of Manchester United and Chelsea.

The first season of the expanded Champions’ League has been a massive financial success. Sponsorship sources use words like “polished” and “professional” to describe the television coverage, but the same cannot always be said of the football. The jury is out on whether the success can be sustained and whether the sponsors will be getting value for money over the next three years.

Tom O’Sullivan was formerly deputy editor of Marketing Week

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