Two clubs can reach the same round of European competition and receive very different sums. The difference comes from a distribution element tied to national television markets rather than to results.
Revenue arrives from centralised selling
The competition sells its broadcast and commercial rights centrally, then distributes the proceeds among the participating clubs under an agreed formula.
The formula has several components, and only some of them reward what happens on the pitch. The others reward where a club is from and what it has done previously.
Understanding which component pays what explains most of the apparent unfairness in European prize money. The components are published, so the disparities are not hidden.
Performance payments are the straightforward part
Clubs receive a participation payment for qualifying and further amounts for each match won or drawn and for each round reached.
These sums are identical for every club, so a team from a small country earns the same as a large one for the same result. Reaching a quarter-final pays identically wherever a club is registered.
This is the element most people picture when they think of prize money, and it is not where the disparities originate. The performance element is genuinely even-handed.
The market pool divides by broadcast value
A separate portion of revenue is allocated to each country in proportion to what broadcasters there paid for the rights.
That national amount is then shared among the clubs from that country, usually weighted by domestic finishing position and progress in the competition.
A club from a country whose broadcasters paid heavily therefore receives far more than a club from a smaller market with identical results. The gap can exceed everything the club earned for winning matches.
Coefficient payments reward past performance
A further component distributes money according to each club's historical record in European competition over a long period.
This rewards sustained participation, which means clubs that have qualified consistently for years receive more than a first-time entrant. Past success is converted directly into present income.
Combined with the market pool, it produces a distribution that favours established clubs from large countries twice over. Two separate components point in the same direction.
The formula is periodically rebalanced
Smaller associations argue the structure entrenches an existing hierarchy, since the clubs receiving most are best placed to keep qualifying.
Larger clubs respond that their markets generate the revenue being distributed and that the pool exists because broadcasters in those countries paid for it.
Successive revisions have shifted weight between the components without resolving the argument, because the two positions rest on incompatible principles.
