Newcastle United have confirmed their return to the Champions League after finishing fifth in the Premier League table.
It will be the first time that the Magpies have played in the competition since the group stages changed to one large league phase.
The last time Newcastle United were in the Champions League, they recorded a historic win against PSG at St James’ Park. Eddie Howe’s side beat a team with star-studded players like Kylian Mbappe and Gianluigi Donnarumma in their starting XI as they played without fear while feeding off the lively atmosphere at home.
Next season will be a completely different beast, with Newcastle playing eight games instead of the traditional six, and the teams in the competition are tougher than ever. Newcastle benefited significantly financially from the Champions League in 2023, and they are set to receive even more income from their appearance next season.
The belief is that the Magpies have already pocketed double their Champions League money from last time. To understand this further, Geordie Boot Boys spoke to Adam Williams, Head of Football Finance and Governance Content at GRV Media.
A view of a packed out St James' Park before a Champions League game between Newcastle United and AC Milan.
Photo by Michael Steele/Getty Images
Newcastle United double their Champions League revenue compared to 2023/24 campaign
The Champions League will always be a good money-spinner for clubs that regularly compete in the competition – that is what Newcastle are aiming for.
Thanks to their qualification in 2023, it now means they will have an even bigger benefit from a pot based on the ‘value pillar’ where clubs are allocated money based on their ranking in the UEFA coefficient over five and 10 years.
On how much money Newcastle have already made from the Champions League, Williams told Geordie Boot Boys: “Newcastle will get a flat participation fee of just under £16m, but that barely scratches the surface of what they’ll earn before a ball is kicked in next season’s Champions League.
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“As well as the basic fee, UEFA also allocates about 35 per cent of its total pot of £2.1bn through its so-called ‘value pillar. A club’s distribution under this system is determined by their five-year and 10-year UEFA coefficient, plus their share of the portion allocated based on the domestic TV deal in the club’s country.
“Newcastle have the benefit of the UK TV deal for the Champions League, which is one of the most valuable. Those factors add together and give you a ranking, which UEFA then pays out incrementally more money for each place in the value rankings you climb.
“It’s complex, but based on what Aston Villa – who have a similar UEFA coefficient – earned last year, my estimate is that Newcastle will get about £17m from the value pillar, so they’ll effectively have doubled their income to £33m before a ball is kicked.”
Newcastle United’s wage bill will increase due to Champions League participation
Newcastle’s transfer window has been quiet so far, but Howe is eager to add new players ahead of their return to the Champions League to give them a much better chance of being competitive.
Bruno Guimaraes called for new signings at Newcastle, and it looks like he will get them after nearly two years without improvements to the starting XI. Those new players will likely carry big wages, but it is actually the wages of existing players about which Newcastle owners, PIF, should be concerned.
Some players and staff will be due significant wage increases due to their achievements, which the club must be mindful of.
On those wage increases, Williams told Geordie Boot Boys: “One thing to consider here, however, is that wages rise when you’re in the Champions League. You’ve got to factor in bonuses for players and staff. That will eat into the net amount Newcastle earn.
“Clubs structure their bonuses differently. Some have trigger clauses whereby the bonuses will be kicked into the next financial year for accounting purposes. The last time Newcastle were in the Champions League, 2023-24, the wage bill rose by over £30m.
“Obviously, some of that will just have been organic growth from new signings and year-on-year uplifts for players, but it gives you a flavour of how significantly Champions League football can affect the wage bill.”