What European Qualification could mean for Newcastle

Barcelona earned around €51m from last season's triumph

Newcastle are in a four way fight for 4th place in the Premier League, and more importantly Champions League football, but they will have maintain their good form throughout the next three months of the season if they are to earn a place in European football's top competition.

A finish in the top four would represent a major turnaround for a club that was in the second-tier of English football just three years ago, but what would it mean financially for the resurgent Magpies?

To properly answer this question we need to take a number of different issues into account. The first of which is Premier League prize money. Each Premier League team is awarded a sum of money at the end of each season, regardless of where they finish, but the amount they receive is dependent on their final finishing position.

Newcastle finished 12th in the Premier League last season, and were awarded a merit payment of £6,810,804 for this achievement. The chart below shows what Newcastle earned from TV money and other add ons.

However, Newcastle's second half capitulation against West Bromwich Albion cost them around £2.3m, the Magpies were 3-0 up on the final day of the season against the Baggies, a result that would have seen them finish in 9th place. Somen Tchoyi's quickfire hat-rick dashed the Geordies' hopes of a top half finish, and that had a significant impact on Newcastle's finances for the year, as Aston Villa, who did finish 9th, received a merit payment of £9,081,072.

Most observers would agree that Newcastle are destined to finish higher than 12th this season, and as a result they should receive a much higher merit payment. Arsenal ended the campaign in 4th last year, earning the Gunners a merit payment of £12,864,852.

So in the interest of this discussion, let us assume that Newcastle will finish 4th and qualify for the Champions League. The Magpies would receive almost £13m for their exploits in the Premier League, but how much money would their presence among Europe's elite earn them.

Initially, clubs that reach the Final Qualifying Round - which is where Newcastle would enter the tournament-receive €2.1m (£1.76m) as prize money. Should they reach the Group Stage then Uefa would award the club an extra €3.9m (£3.3m).Each team that enters the Group Stage also receives €550,000 for each group game as well as performance related bonuses (€800,000 for a win and €400,000 for a draw).

Therefore the very least that Newcastle could expect to receive in participation payments, should they make it to the Group Stage, is €9.3m (£7.79m).

The next aspect to take into account is television money. Each side that qualifies for the Champions League Group Stage receives a share of the television funding from the 'market pool'. The excellent blogger 'The Swiss Rambler' explains that the amount a club receives from the pool is dependent on a number of variable factors:

1) The size/value of a country's TV market (the UK TV market is likely to be larger than most others, so English teams should receive more than Spanish and Italian sides)

2) The number of representatives from your country. (England has a maximum of four representatives, so an English side would therefore earn less than a Dutch team, as Holland has a maximum of just two representatives.)

3) The position of a club in it's domestic championship in the previous season. (If two teams from the same country reach the Quarter Finals, the one that finished higher in their domestic league would receive a higher share)

4) The number of matches a club has played in the current season's Champions League.

The final amount that Newcastle could receive from TV money is difficult to estimate, as it depends on so many variables. However, the figures from last year (shown below) give a better indication of the sum of money the club may earn if they were to qualify for the tournament.

Let's work on the rather negative but somewhat realistic assumption that Newcastle are eliminated in the Group Stage. No English teams were knocked out at this stage in 2010/2011, so therefore I have decided to use Rangers (who operate within a similar TV market) and Werder Bremen as examples. Bremen are a particularly good example as the German TV market is quite large and the money made from television was distributed between three teams (only England had four representatives in the Group Stages in 2010/2011).

Both teams were eliminated from the Champions League in the Group Stage, Bremen received €8,656,000 from the market pool, while Rangers - as a result of being Scotland's only representative in the Group Stage - were awarded €9,326,000. Taking these figures into account, it is fair to assume that a Newcastle side knocked out in the Champions League Group Stage would receive around €9m (£7.5m) in television revenue.

Newcastle would also procure additional revenue from the inevitable increase in sponsorship that would come as a result of qualifying for the competition, but it is a figure that is difficult to try and estimate at this stage.

Four additional home games would be held at St James' Park if Newcastle were to compete in the Final Qualifying Round and the Group Stage, those extra matches would obviously boost earnings through gate receipts and money made from the commercial side of the matchday experience. The club's accounts for the 2010/2011 season have yet to be released - though early figures suggest that the Magpies earned approximately £88.5m - and therefore at this stage I will avoid attempting to guess just how much of an impact the four extra games would have on Newcastle's yearly matchday revenue.

However, taking into account the money made from Premier League & Champions League prize money and television revenue, it is fair to estimate that qualifying for the Champions League and making it through to the Group Stage would see Newcastle collect almost £30m, and that is excluding sponsorship and extra revenue earned on the additional match days.

Qualification for the Europa League would still see Newcastle receive a considerable sum of money, a 7th place finish - which could well be enough to secure European football this season - earned Everton £10,594,584 in 2010/11. However, the prize money in Europa League is significantly less than that of the Champions League, this year's Europa League winners will recieve just €20m (16.75m), whereas Manchester United received a total of €53.2m (£44.6m) for finishing last year's Champions League as runners up.

Football teams are motivated by trophies and success, not facts and figures, but the prospect of another £30m in the bank should be all the motivation that Newcastle, as a club, need to push as hard as possible to try and take their place among Europe's elite footballing powers.