Liverpool F.C. 2005–06 UEFA Champions League qualification
Liverpool F.C. qualified for the 2005–06 UEFA Champions League by a special dispensation from UEFA. Although they were eligible to compete as champions of the 2004–05 UEFA Champions League, the FA had instead awarded the fourth and final English place in the competition to Liverpool's local rivals Everton F.C., since Everton finished fourth in the 2004–05 FA Premier League and Liverpool had finished fifth. The public reaction to this controversial decision prompted UEFA to make a one-off exception for Liverpool and amend the qualification criteria for the Champions League to prevent a recurrence.
Five eligible clubs for four available places 
England’s high country coefficient allowed the maximum number of teams (four) to be entered into the Champions League competition. In the 2004–05 season, five English teams had qualified under the previous UEFA guidelines for the competition: Chelsea, Arsenal, Manchester United and Everton, who had finished in the top four places in the Premier League; and Liverpool, who had won the Champions League. The choice of which team to be excluded (either fourth-placed finishers Everton or Champions League winners Liverpool) fell to the FA, which was given this authority by the version of Champions League Regulation 1.03 then in force:
At the request of the national association concerned, the UEFA Champions League title holders may be entered for this competition, as an additional representative of that association, if they have not qualified for the UEFA Champions League via the top domestic league championship. If, in such a case, the title holders come from an association entitled to enter four teams for the UEFA Champions League, the fourth-placed club in the top domestic league championship has to be entered for the UEFA Cup.
This situation was unusual but neither unprecedented nor unforeseen. Real Zaragoza finished fourth in La Liga in 1999–2000, but went into the UEFA Cup because Real Madrid, who finished fifth, were given Spain's fourth Champions League place as defending champions. The RFEF's choice under Regulation 1.03 likely had as much to do with Real Madrid being considered more prominent than Real Zaragoza as well as the former being the reigning Champions League title holder. Indeed, the FA itself foresaw the same situation arising in the 2003–04 season and released a statement on 10 March 2004 that if Arsenal or Chelsea won the Champions League, but failed to finish in the top four Premier League spots, they would nonetheless be automatically entered in the next year's competition and the fourth placed Premier League team placed in the UEFA Cup.
On 5 May, the FA decided that the top four finishing teams in the Premier League would be entered into the Champions League even if Liverpool did win the upcoming Champions League Final. When the inconsistency was pointed out to the FA, the FA pulled the previous year's statement from its website, and promised that an explanation would follow. In the event, no explanation was forthcoming. The FA's chief executive, Brian Barwick, was quoted as saying "I think the FA were right and proper to put the top four in to the Champions League. That’s how teams kicked off in August, expecting a top-four finish to give them qualification or pre-qualification and that will not be changed."
Merseyside implications 
The controversy was intensified not only because Liverpool and Everton have a storied Merseyside rivalry, but also because entry into Europe's top club competition was the subject of a longstanding grudge between the two clubs. The grudge has its origin twenty years before in May 1985, when Everton won the old First Division, thus clinching entry into the next year's European Cup. However, following the Heysel disaster (May 29, 1985) involving Liverpool fans, English clubs were given an indefinite ban from European competitions (lifted in 1990, except for Liverpool, who were banned for a further year). The ban coincided with a period of remarkable Everton successes (including two first and one second place finishes) which would have ordinarily earned Everton at least three years of top flight European Football. Many Everton supporters see this period of missed European campaigns as the start of Everton's slide out of the top echelons of English football, a slide for which Liverpool is thus partially responsible. Twenty years after Heysel, Everton supporters did not believe it would be just that they should be denied a place in the top club competition by Liverpool. This history, as well as Everton maintaining its status as one of the prominent English teams, likely influenced the FA's choice to nominate Everton for the fourth Champions League spot regardless of whether Liverpool won the Final; in contrast to the RFEF whose decision to sacrifice Real Zaragoza in favour of Real Madrid was more popular and less controversial.
Officially, Everton offered their support of Liverpool's entry into the Champions League, although they expressed concern that Liverpool's entry should not come at the financial expense of any other clubs in the Champions League competition and then made the rather radical suggestion that Liverpool should be excluded from any share of the Group Stage Market Pool, the most lucrative source of Champions League revenue, which would have left Liverpool essentially with only the match day income from their Champions League matches as well as some performance bonuses and match fees. For English teams especially, the market pool is considerably more lucrative than performance bonuses.
UEFA ruling 
For some time it was unclear whether Liverpool would be granted the right to defend their title or be consigned to the UEFA Cup. UEFA initially stood by the rules that each country could only have four Champions League spots and suggested that the FA could nominated Liverpool instead of Everton, similar to how Real Madrid displaced Real Zaragoza for Spain's fourth Champions League entry, while the FA argued that these rules were unfair and should be amended in retrospect. The League of Wales champions Total Network Solutions offered to play a two-legged tie for TNS' place in the first qualifying round.
After a ground swell of support for Liverpool’s inclusion (it had been reported that Franz Beckenbauer and then-UEFA president Lennart Johansson supported having Liverpool as a fifth English team), UEFA seemed to soften its stance. The situation was finally resolved by UEFA on 10 June 2005. Liverpool would be allowed to enter the competition in 2005–06, but entering the competition from the first Qualifying Round. Liverpool ended up playing TNS in that round.
With regard to the financial implications of Liverpool's entry, UEFA decreed that Liverpool would be treated as the lowest-placed English club for determining their share of the England market pool. However they essentially left undecided the difficulty of how Champions League revenue calibrated for 32 clubs would be divided instead among 33 clubs, because this problem was not only extremely difficult, but also would only become a problem if all three English teams playing in the qualifying rounds (Manchester United, Liverpool, and Everton) actually qualified for the Group Stage. As it happened, Everton was quickly eliminated, losing both matches to Villarreal CF in the third qualifying round, thus ending Everton's claim to any portion of the Group Stage Market Pool, match fees or performance bonuses.
Another implication was that when Liverpool progressed through the qualifying rounds to the group stage, they were not given "country protection" in the draw for the group stages. Normally two teams from the same association cannot be drawn in the same group. In the event they were drawn in the same group as Chelsea.
Rule 1.03 amendment 
UEFA amended Rule 1.03 to guarantee future European title holders qualification to the next year’s Champions League competition, at the expense if necessary of a team in the champion's domestic league which preserves the maximum allowed number of entrants per domestic league, and takes away the authority of the national football association to decide which team to nominate in this situation:
The UEFA Champions League title-holder is guaranteed a place in the group stage even if it does not qualify for the competition through its domestic championship.
- a) If the title-holder comes from an association entitled to more than one place in the UEFA Champions League and qualifies for the UEFA Cup through its domestic competitions, the lowest-ranked club of the association’s UEFA Champions League representatives is automatically transferred to the UEFA Cup. In this case, the number of places to which the title-holder's national association is entitled in the UEFA Champions League and the UEFA Cup does not change.
- b) If the title-holder comes from an association entitled to more than one place in the UEFA Champions League and does not qualify for the UEFA Champions League or UEFA Cup through its domestic competitions, the lowest-ranked club of the association’s UEFA Champions League representatives is automatically transferred to the UEFA Cup. In this case, the national association of the title-holder is entitled to one additional place in the UEFA Cup.
If the UEFA Cup title-holder does not qualify for either the UEFA Champions League or UEFA Cup through its domestic competitions, its participation in the UEFA Cup will not be at the expense of the contingent of its association.
For a time during the 2005–06 season there was a very good chance that the new rules would be invoked for the 2006–07 tournament, as Arsenal progressed to the Champions League Final against Spanish side Barcelona while languishing in fifth place in the Premier League. The team that was in danger of "losing" a Champions League place was none other than Arsenal's fiercest local rival, Tottenham Hotspur. Spurs had held a top four spot for six months of that season and led Arsenal by a point as both clubs went into their final league games. Spurs lost that match at West Ham (having been only able to field a weakened team due to a number of players succumbing to an intestinal illness the night before), while Arsenal defeated Wigan Athletic F.C. to overtake Tottenham and secure the fourth 2006-07 Champions League spot. Arsenal then went onto lose the 2006 Champions League final.
The first time that this new rule was implemented was in 2011–2012. Chelsea finished sixth in the domestic league, however they went on to win Champions League. Their entry in the 2012–13 Champions League automatically came at the expense of Tottenham Hotspur, the fourth-placed team of the 2011–12 Premier League which entered 2012–13 UEFA Europa League instead. This consequently marked the first time that the club finishing fourth in the Premier League had not qualified for the Champions League since the fourth qualifying spot was introduced in the 2001–02 season; and losing a Champions League spot is estimated to cost a club £20m in UEFA television revenue. Spurs manager Harry Redknapp branded this rule "unfair", and his nephew Frank Lampard (who skippered Chelsea in the Champions League final) has sympathised with Tottenham's situation. UEFA President Michel Platini has suggested that the rule may be reviewed although no changes could be brought for at least three years and he personally favours a maximum of four teams per country.
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