What does Rangers' Champions League exit mean for finances?

Rangers' Champions League exit means the club will miss out on at least £12m in the short term as a result.

Their 3-1 aggregate defeat by Dynamo Kyiv in the third qualifying round means it is the Ukrainian side who progress to face Salzburg in the play-off round, the last stage before the lucrative and inaugural league phase.

Rangers will have budgeted for scenarios with and without Champions League football come the autumn, but manager Philippe Clement said "financially, it's a big difference for the club" and would "also make a difference" to recruitment.

So how much worse off will the Ibrox club be in the Europa League? In short, Rangers are looking at bringing in between a fifth and a quarter of what they would have in the Champions League, but it could increase depending on performance.

Governing body Uefa says, external £2.12bn will be distributed to participating Champions League clubs in 2024-25, while Europa League clubs will receive a share of £485m - roughly 22% of the Champions League monies.

Rangers reached the last 16 of the Europa League last season, while Celtic competed in the final group stage of the Champions League.

Both clubs will not reveal their income streams in their accounts for 2023-24 until later this year, but Rangers were a Champions League group-stage club in autumn 2022 and detailed £18.5m in Uefa revenue in that year's accounts.

In the previous year, which related to Rangers' run to the Europa League final, the club received £17.3m in Uefa prize money.

How much of this season's £485m is distributed to Rangers depends on how far they go in the competition and how many points they pick up at the new league phase.

They are guaranteed £3.7m, compared with the near £16m Celtic are guaranteed in the Champions League's new league phase.

A win in any of the eight league-phase games Rangers will play would be worth in the region of £386,000 and a draw £129,000. The Ibrox club will also receive a performance-related amount depending on where they finish at the end of the league phase.

Qualification to the Europa League knockout round is worth £257,000 per club, with £1.5m the prize for progressing to the last 16. The prize money increases to £2.15m in the quarter-finals, £2.6m in the semi-finals, £7m for reaching the final and an additional £6m goes to the winner.

Hence, like Rangers in season 2021-22, it would require a place in the Europa League final to get close to matching Champions League pre-knockout round participation income.

One of the most discussed issues surrounding European football for Scottish football fans is the coefficient: the measure that influences where clubs and associations are ranked and seeded.

Rangers, due in large part to their Europa League performances of recent years, actually have a coefficient 41 places higher than three-in-a-row champions Celtic. The Ibrox side sit at number 28.

Scotland's coefficient - 17th down from 11th this year - has benefitted from this in recent years but has also been affected by the European performances of other Scottish clubs.

As an example, last season Rangers played 12 European fixtures, winning four and drawing five. Aberdeen, Celtic, Heart of Midlothian and Hibernian collectively generated five wins and six draws from 24 games.

With Scotland sitting below the top 15, it is expected that their champions next season will face qualifiers to reach the league phase of the Champions League, while Scottish Cup winners and high finishers in the Premiership will face a tougher route to league or group games.

Celtic have secured direct entry to the Champions League group stage in the past two seasons and the league phase this term. Aberdeen and Hearts have been in the Conference League group stage over the past two seasons.

This season's results involving Scottish clubs will affect coefficients the season after next. As well as the Glasgow clubs, Hearts are guaranteed European football into the autumn - in either the Europa or Conference League - while Kilmarnock and St Mirren are bidding to reach the Conference League group stage.

Football finance expert Kieran Maguire

This is effectively going to put a £20-30m hole on top of an existing gap between [Celtic and Rangers] in terms of their finances*.

It's essential for Rangers to be regularly participating in the Champions League for them to get back on to more of an equal footing with Celtic.

Celtic have got the benefits of slightly higher commercial revenues because they're being exposed to Champions League matches, they've got a bigger stadium, so they're generating more money on matchday.

And the SPFL TV deal is not significant in terms of its overall impact, so therefore you become far more reliant on the money from Uefa.

If Rangers are to genuinely be challenging Celtic in terms of their ability to match wages and to match the club in the transfer market then they need to have equal or better footing with regards to their participation in Europe.

*Celtic posted revenue of £119.9m and Rangers took in £83.3m for the year to June 2023