Fernando Gomes, whose Porto team were European champions in 1987 and 2004, told delegates at the Soccerex business convention that Champions League organiser UEFA should reconsider the way it distributes revenue.
"I think the way Champions League money is distributed must be analysed and changed in order to give the opportunity to the clubs that are not in the Champions League more money to balance the domestic competition," said Gomes.
"If clubs not in the Champions League get more money then they can get better players and you can increase the quality of the competition. If you cannot do this then the quality decreases and the gap in the league increases."
The most successful teams in Europe's elite club event can earn up to 40 million euros a season.
UEFA distributes around 6.5 percent of its annual Champions League revenue in so-called "solidarity payments" to its 53 member associations, with a minimum of 413 million euros shared among the 32 teams competing in the competition proper.
FINANCIAL DISPARITY
Gomes said the financial disparity created by the Champions League had a big impact on Europe's smaller leagues like Hungary.
"For example Debrecen of Hungary made 50 percent of its total revenue from reaching the group stage of the competition," he said.
"There are other examples of the same percentages like APOEL Nicosia or Unirea (Urziceni) of Romania. This money seriously unbalances those leagues."
The Champions League generated 45 million euros in its first season in 1992-93, with that figure now standing at 1.15 billion euros.
Guillaume Sabran, UEFA's marketing manager, told delegates that clubs expected that figure to rise season by season.
"We are continually looking at ways to maximise revenue for the clubs both in the competition and out of it," he said. "But it is for the policymakers to decide how that money is allocated."
