What now for United and City?

The unthinkable happened on Wednesday, with Manchester United and Manchester City crashing out of the Champions League at the first hurdle.

Both finished third in their respective group and earned the consolation prize of a place in the Europa League, which is more like a annoying obligation for a top-four Premiership club.

This is only the third time in seventeen years that United have failed to progress beyond the group stage, losing to Basel convincingly in Switzerland to seal their fate. United were finalists in three of the last four years on Europe's biggest stage, so the reality of participating in a second-tier competition will soon sink in, dealing a major blow to the enormous ego of Sir Alex Ferguson.

On the blue side of the Manchester, poor results early on in the competition left City without control of their own destiny. Even though they earned the victory against Bayern Munich, the result from the El Madrigal dampened the mood inside the Etihad Stadium, with news circulating that Napoli had won their match versus Villarreal, officially ending the Citizen's inaugural run in the Champions League.

Neither Ferguson nor Roberto Mancini will take the Europa League seriously, so expect the academy kids to be called upon for those magical European Thursday nights. All the focus will now be put towards the hunt for domestic silverware; it could turn out to be a blessing in disguise for both Ferguson and Mancini in the long term.

Although City own an impressive undefeated record in the Premiership, the strain of playing on two fronts could have done serious damage to their title ambitions, with the season kicking into high gear in January. City's goal from day one has been the Premiership; anything else would have been an added bonus and another notch on owner Sheikh Mansour's expensive belt. Europe can wait for the time being, but next year the pressure will be more intense and the knockout rounds will be a priority.

On the opposite end, United have struggled to maintain the aura of invincibility which has been associated with the club, unable to outplay and bully opponents off the pitch like in previous years. Even Old Trafford has lost some of that mystique, starting with the embarrassing lop-sided loss to their neighbours, followed more recently with a loss to Crystal Palace in the Carling Cup quarter-finals. Ferguson was left to eat a big piece of humble pie and publically apologized to Red Devils supporters during his post-match interview.

The difference between both performances on Wednesday night came down to finishing.

City were able to take control of the game right from the start and attack in waves. With their backs against the wall Mancini's men proved they can handle the pressure of a must win game. You can make the argument that Bayern played somewhat relaxed and laid back, with a large number of their regulars on the bench. But in football, results are never guaranteed, even though the visitors failed to put up much of a fight.

David Silva was the midfield maestro pulling the strings, linking up play and creating chances almost at will. Sergio Aguero was unlucky not to get on the score sheet, he could have easily had a hat trick with the amount of opportunities that fell his way. Honourable mentions have to go out to Gareth Barry and Edin Dzeko, as both had solid performances in supporting roles and deserve some of the plaudits. Put it simply, City's best players stepped up to the challenge, rising to the occasion; it was unfortunate the result turned out to be a non-factor.

United have always found ways to get the job done whenever faced with any form of adversity, digging deep to grind out a result or getting that touch of quality at the right moment to achieve the goal at hand. Ferguson has built a career on finding ways to win. But against Basel the mood was very different. Surrendering the early lead was an omen, but the biggest disappointment had to be the play of Wayne Rooney. His focus came into question, as one could assume his mind was someplace else with the UEFA disciplinary hearing looming, and his superpowers were non-existent.

Possession was never in doubt, and most of the match was United pressing for the equalizer. To make matters worse Nemanja Vidic was stretchered off with an apparent knee injury, creating a huge hole in defence. Ferguson sat stunned in silence on the bench watching his side squander numerous opportunities to draw level, none of his top guns jumped into the spotlight to take command. When United eventually managed to score through a Phil Jones header it was too late.

The Glazer family will now feel some of the financial repercussions start to trickle down after the team's failure to get out of the group stages. Unlike their billionaire neighbours they do not have the luxury of signing blank cheques and count on the millions of revenue dollars that pour in from the Champions League to balance the books and pay off their huge debts.

Mancini will look at this as a learning curve rather than a complete failure, happy to gain some valuable experience for his players in their quest for greatness. However the early exit could have devastating consequences to United's confidence moving forward, now that domestic supremacy will take centre stage.

Thomas Michalakos is a former associate producer with Sportsnet's Soccercentral and writes the weekly blog Soccerholic365. Follow Thomas on Twitter.