Europe’s elite – the gap widens?
Posted on May 27, 2016
ON THE EVE of the UEFA Champions League final in Milan, the gulf between European football’s haves and have-nots has been highlighted in a new report issued by KPMG’s Football Benchmark team, The European Elite 2016.
The report places Real Madrid and Manchester United at the top of a 32-team table, with both enjoying a mid-point enterprise value (EV) in excess of £2bn. Barcelona are also in the £2bn zone.
There are only four other clubs with an EV of more than £1bn – Bayern Munich, Arsenal, Manchester City and Chelsea. After that, the valuations tail-off quite dramatically.
While Real and Barca are both in what has become a “bulge bracket”, the next highest Spanish club, Atletico Madrid, has an EV of just £437m and next comes Valencia with £150m and Sevilla on £133m. This underlines the huge advantage that Spain’s “big two” have over their La Liga stable-mates.
Similarly, in Germany, Bayern Munich’s EV is more than double the second biggest club, Borussia Dortmund and almost four times Schalke’s value.
Italy is more democratic in this context. In the KPMG 32, there are seven Serie A clubs, ranging from Juventus’ EV of £726m to Fiorentina at £115m. But as KPMG points out, Italian teams are far less influential than they were in the past. Although Italy has a strong representation in the report, the combined EV of the clubs involved, is some 70% lower than the seven English clubs.
England provides half of the top 10, no surprise given the sponsorship and broadcasting revenues directed towards the English Premier League. “The new media landscape, combined with these clubs’ consistent capability to generate a high volume of revenues, which in most cases translates into a high level of profitability, allows England to top our report in terms of enterprise value per country”. In fact, English clubs account for around 40% of the aggregate EV of the KPMG 32.
Manchester United’s position at the top with Real Madrid is perhaps a surprise given the recent on-field performance of the club, although United’s track record and long-standing position at the vanguard of the English game. This suggests that United’s value is somewhat greater than their current market value – earlier this year their stock fell to a three-year low, heavily influenced by their decline on the field.
Interestingly, France has more teams in the 32 than Germany, with Paris St. Germain in 10th position with an EV of £622m. But no other French club comes close to the Ligue 1 champions – Monaco are next on £144m and Marseille and Lyon close behind.
Only six of the 32 clubs come from outside the “big five” leagues – Ajax and PSV Eindhoven from the Netherlands, Benfica and Porto of Portugal and the Istanbul duo of Fenerbahce and Galatasaray.
So how did KPMG arrive at their list of 32? The main criteria were profitability, popularity, sporting potential, broadcasting rights and stadium ownership. Social media was obviously a consideration, and revealed that Barcelona, for example, has 92 million followers.
In 2015-16, KPMG’s 32 performance:
|Real Madrid||2nd||Last 32||UCL Final*||71,280|
|Manchester United||5th||Winners||EL R/16||75,286|
|Bayern Munich||1st||Winners||UCL SF||75,000|
|Arsenal||2nd||Last 8||UCL R/16||59,944|
|Manchester City||4th||Last 16||UCL SF||54,041|
|Chelsea||9th||Last 8||UCL R/16||41,500|
|Liverpool||8th||Last 32||EL Final||43,910|
|Paris St. Germain||1st||Winners||UCL Last 8||46,160|
|Borussia Dortmund||2nd||Final||EL Last 8||81,178|
|Tottenham||3rd||Last 16||EL R/16||35,776|
|Schalke||5th||Last 32||EL R/32||61,386|
|Atletico Madrid||3rd||Last 8||UCL Final*||47,113|
|Napoli||2nd||Last 8||EL R/32||38,760|
|Roma||3rd||Last 16||UCL R/16||35,152|
|Ajax||2nd||Last 32||EL Group||49,026|
|Benfica||1st||Last 32||UCL Last 8||50,322|
|Lazio||8th||Last 8||EL R/16||21,025|
|Monaco||3rd||Last 16||EL Group||7,838|
|Lyon||2nd||Last 16||UCL Group||40,296|
|PSV Eindhoven||1st||Last 8||UCL R/16||33,594|
|Fiorentina||5th||Last 16||EL R/32||28,734|
There are six league champions among the 32, six cup winners and both European competitions will will be won from this group. Of the countries represented, only two league title winners have come from outside the 32 – Leicester City in England and Besiktas in Turkey.
Given this is UEFA Champions League weekend, the last time that a club from outside the KPMG was in the final was in 2002 when Bayer Leverkusen were beaten by Real Madrid.
And across the leagues, the last non-32 champions were:
England: Leicester City 2015-16
France: Montpellier 2011-12
Germany: Wolfsburg 2008-09
Italy: Sampdoria 1990-91
Netherlands: Twente 2009-10
Portugal: Sporting 2001-02
Spain: Deportivo La Coruna 1999-00
Turkey: Besiktas 2015-16
To see the KMPG Football Benchmark report, click here