Wenger puts breakaway on the table

The Champions' League is celebrating its 10th anniversary this year. It is possible that it may also be one of its last. As the competition prepares for what most agree will be the most important phase of its existence, the prospect of a break-away European Super League is rearing its head again. Arsène Wenger, the Arsenal manager, has admitted that the Double winners may be "forced to look at alternatives" to compensate for the loss of revenue that will result from the scrapping of the second group stage of the Champions' League.

The G14 – an organisation who actually now comprise Europe's top 18 clubs, including the likes of Manchester United, Liverpool, Real Madrid, Juventus and (as from last Friday) Arsenal themselves – said on Friday that they had "reluctantly agreed" to Uefa's decision to change the format of Europe's élite competition from next season onwards. But The Independent on Sunday has learned that the powerful group are so unhappy about the alterations that they will immediately begin considering the creation of a separate European tournament. "We are angry," a source at the heart of the G14 said, "not just because of the changes themselves, which will have very serious financial repercussions for all the clubs, but also because of the way in which Uefa presented this as a fait accompli. We were never properly consulted, and the changes were made in spite of our vociferous opposition."

The dispute centres on Uefa's announcement in July that the second group phase of the Champions' League would be cancelled from the 2003-04 season, thus making the competition a 13- rather than 17-match event. The first phase, in which 32 teams are drawn into eight groups of four, will be maintained, but the second phase, involving 16 teams, will become a straight two-legged knockout competition. Uefa made the decision because they felt that the latter group stage produced too many "dead" matches that were unattractive to broadcasters. The G14 disagree. They argue that there will always be less important games in any competition, but that does not justify "robbing" the clubs of extra revenue. The changes also mean that teams finishing third in the first group phase will no longer be parachuted into the Uefa Cup.

Here lies the crux of the dispute. Uefa are worried about the marketability of their prize asset; the G14 are worried about balancing their ever-growing budgets.

"We have all got commitments to contracts that we have to honour in the next three or four years," Wenger said on Friday, "so not many clubs can afford to suddenly have less income. But the new format means exactly that."

Have Uefa, in effect, encouraged the formation of a breakaway European Super League? "What they have done is a regressive move," the Frenchman explained. "They could have chosen to move forward, but they have gone backwards with this. It has forced ourselves, Manchester United, and other big clubs, to seriously consider other alternatives because of our financial commitments."

When asked what could happen, Wenger shrugged his shoulders. "I don't know, but I really do feel that, in the present economic climate in football, not many clubs can afford to survive on less income. The only other solution would be to renegotiate all the contracts [and effectively force the players to accept a pay cut], but that seems very unlikely. So what is needed now is a new adjustment for the current financial situation. Without that, we would have no choice but to look elsewhere."

But that "adjustment" figure will be difficult to reach. In cutting four matches from the competition, Uefa are depriving the clubs of potential earnings in excess of £7 million. That may seem like small fry in terms of transfer fees, but it does represent a large chunk of a year's wage bill. The missing millions will have to be found elsewhere, but the possibilities are not endless. Only the acquisition of internet rights could go some way towards appeasing the G14 accountants.

According to Wenger, the other basic problem to sort out is the question of TV rights. Although it is highly debatable whether the various broadcasters would have been willing to match their previous valuation, the Frenchman feels that the new format is not the answer. He is concerned that TV channels will not be prepared to pay as much as they did last time because the changes have devalued the Champions' League.

"I am not convinced that this will make things more exciting. Say, for example, that ITV have the rights to the competition, and that there is no English club in the last 16. Do you think that the audiences will be up then? No. This is why we should not have cancelled the second group stage, as it gave teams a better chance of staying in the tournament longer, and kept more people interested."

Newcastle United, who have qualified for the Champions' League group stages, are said to agree with Arsenal. But Mike Lee, the Uefa spokesman, said that decisions had to be made for the "good of the whole of Europe". "We cannot just look at England in isolation," he explained. "The second group stage worked for their clubs, but not for most others."

After two years of dispute, Uefa have clearly decided to grab the initiative back from the G14. But have the leaders of Uefa been too heavy-handed with Europe's top clubs? The Independent on Sunday has discovered that 11 of the G14 board members were summoned by Uefa to a secret meeting in Nyon last Wednesday, where they were told in no uncertain terms that they should "put up or shut up" because the Champions' League changes had already been decided and were "non-negotiable".

So much, then, for the peace that appeared to break out on Friday. Instead, it seems as if the G14 have agreed to Uefa's demands in order to buy time to consider their options. The G14 source said that the group's reluctant agreement was "not an approval at all", but rather "a final warning that the bullying must now stop".

Uefa may have won the latest battle, but not, it seems, the long-term war.