Money and power

United the most valuable club

Fans head to the Europa League final in Stockholm – Manchester United beat Ajax 2-0 to claim a place in the Champions League for 2017-18

DESPITE being out of the UEFA Champions League and unable to make a sustained Premier League challenge in 2016-17, Manchester United are Europe’s most valuable club, according to KPMG’s Football Benchmark report, The European Elite 2017.

United are ahead of Real Madrid and Barcelona, underlining the impressive off-pitch performance of the club. Operating revenues totalled EUR 688m, versus EUR 619m for Real and EUR 616m for Barca. United’s staff cost versus revenues at 47% were just lower than Real’s but significantly below Barca’s 60%.

Most notable is United’s Earnings Before Income Tax, which totals EUR 92m, more than double Real’s EUR 41m and considerably higher than Barca’s EUR 68m.

The continent’s top clubs continue to prosper with the enterprise value (EV) of the 32 clubs in the KPMG report growing by 14% to EUR 29.9bn. Manchester United’s EV improved by 7% and only three clubs in the top 32 saw their EV fall – Ajax, Lazio and Marseille. The best performers in terms of increases were Lyon (+71%), Galatasaray (+68%) and Sevilla (+44%).

The upper echelon is dominated by English clubs – no less than six are in the top 10, with Manchester City (5th) Arsenal (6th), Chelsea (7th), Liverpool (8th) and Tottenham (10th) all benefitting from the generous TV broadcasting revenues that the Premier enjoys. Leicester, profiting from their title win and European involvement are 16th and Everton 17th.  The first 10 accounted for 68% of the total EV of the 32, and the top three alone accounted for 30%.

The Premier’s TV deal dwarfs the other main leagues, especially the agreement for 2016-19. The relatively equitable revenue distribution model (1.5:1 ratio between the first and last club in 2015-16), which is more democratic than other leagues.

KPMG’s paper also demonstrates the most successful clubs in generating returns on sales. Benfica is the leading club in this space at 30%, in other words, posting EUR 30m in EBIT for every EUR 100m of revenues.

The top 10 clubs by EV: 1 – Manchester United EUR 3.1bn; 2- Real Madrid EUR 3.0bn; 3 – Barcelona EUR 2.8bn; 4 – Bayern Munich EUR 2.4bn; 5- Manchester City EUR 2.0bn; 6 – Arsenal EUR 2.0bn; 7- Chelsea EUR 1.6bn; 8 – Liverpool 1.3bn; 9 – Juventus EUR 1.2bn; 10 – Tottenham EUR 1bn.

To see the full paper from KPMG, click here

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