By Mike Collett

BASEL (Reuters) - The European Championship will generate a record income of about 1.3 billion euros ($2.00 billion), UEFA general secretary David Taylor said on Friday.

He told a news conference most of the revenue will come from TV deals and sponsorship and the figure is about 50 percent higher than that generated at Euro 2004 in Portugal.

Taylor explained: "The sums from TV rights and sponsors are much bigger than the sums generated from ticketing."

"Considerable sums are now also being generated by corporate hospitality. We earn about 1.3 billion from this whole exercise, but where does it all go?

"First is prize money for the teams. They all get a starting bonus of 7.5 million. They get an additional million euros for a win and 500,000 for a draw."

Teams then get additional prize money if they progress with the winners taking home a maximum of 23 million euros."

Taylor added that the operating costs of staging the event were about 600 million euros with another 450 million going to all 53 UEFA member associations to develop the game.

EURO BOOST

The European Championship has grown from a four-team finals staged between 1960 and 1976 to the third-largest sporting event in the world after the World Cup and Olympic Games.

A report by the StageUp sport business research firm showed earnings from the event have risen six-fold since 1992, the last time an eight-team finals was held. The current format of 16 teams was introduced in England in 1996.

UEFA are looking at plans to increase the size of the tournament to 24 teams from 2016, although that study will not be completed until next year at the earliest.

The European economy is also likely to receive a 1.4 billion euro boost from the tournament which kicks off on Saturday, according to StageUp and MasterCard estimates.

Co-hosts Austria and Switzerland alone are likely to benefit to the tune of 470 million euros from staging the event.

"This impact will be felt in many countries, principally driven by sponsorship and commercial revenues, with each game in the group stage generating upwards of 42 million euros on average," said Simon Chadwick, professor of sport business strategy and marketing at Britain's Coventry Business School.

Sponsors have paid 26 million euros each to be associated with this year's tournament, according to global sports marketing research firm Sport+Markt.

In total, 31 matches will be played at the tournament with the most profitable in the first stage likely to be in Group C which contains world champions Italy, World Cup runners-up France, Netherlands and Romania said Chadwick.

(Additional reporting by Antonella Ciancio in Milan, editing by Ken Ferris)