For the champagne reduction, pour the champagne into a saucepan and set over medium heat. Simmer until the champagne is reduced to about 1/3 cup. Cool completely to room temperature.
In the bowl of your stand mixer fitted with the whisk attachment, beat the butter for one minute.
With the mixer on low, gradually add the powdered sugar, the meringue powder, salt and vanilla. It will be clumpy. Add the cooled champagne reduction and the food coloring.
Increase the speed to medium, and whip for 4-5 minutes, scraping the bowl several times, until very light and fluffy. If needed for desired consistency, add the milk as you're whipping the buttercream.
Stack, fill and frost the cooled cakes with the buttercream.
Before the buttercream crusts over, scatter with the sparkling sugar, tossing it at the sides so it sticks.
Scrape the remaining buttercream into a piping bag fitted with tip 1M. Pipe swirls on top of the cake, and decorate with sugar pearls.