New European Leagues president Claudius Schafer says he “fears for the future” of domestic competitions because of the distortion created by prize money from international tournaments.

On Wednesday, world governing body Fifa announced prize money of $1bn (£780m) for this summer’s 32-team Club World Cup in the United States.

The actual fees will rise depending on performance at the tournament, which is likely to benefit the 12 European clubs. The top nine sides in the betting markets are all from Europe, with Austria’s Red Bull Salzburg the only European team not favoured to reach the last 16.

While Fifa has said it will provide $200m (£155m) to European football in solidarity payments for non-participating clubs, it has not been explained exactly where this money will go.

However, Schafer suggested the solidarity aspect was largely irrelevant – and raised concerns about the impact of substantial prize money on the competitive balance in “smaller and mid-sized leagues”.

“When you see the money being paid to those participating in the competition this summer, it is huge,” he said.

“If an Austrian league club gets $50m, that has a huge influence on [that] league.

“Competitive balance is one of the most important topics for a league.

“The smaller and mid-sized leagues have had very good discussions about solidarity, but we have to be frank – it is a small portion if a club is participating in international competition. I fear for the future to be honest.”

Leagues across Europe are wrestling with the issue of dominance from a small number of clubs – including England where Manchester City won an unprecedented fourth title in a row last season.

The last time a team other other than Real Madrid, Barcelona or Atletico Madrid won Spain’s La Liga was in 2004, Juventus clinched nine straight Italian Serie A titles to 2020, while Bayern Munich look set to reclaim their Bundesliga crown this term after Bayer Leverkusen ended their 11-season streak in Germany.

Elsewhere, Paris St-Germain look certain to make it 12 titles in 14 years in France, while Red Bull Salzburg won 10 Austrian titles in a row to 2024.

“We have to come up with some conclusions,” said Schafer.

The inaugural expanded Club World Cup begins on 14 June and finishes with the final in New Jersey on 13 July.