Six clubs worth US$ 4 billion or more – football is still relatively modest

FORBES has just issued its wealthiest football club list, a tale of higher valuations but falling revenues across the industry. It is quite astonishing that against a backdrop of financial crisis caused by the covid pandemic, football’s top clubs have seen their valuations rise by an average of 30% over a two year period.

The top 20 have an average valuation of US$ 2.28 billion, although only six clubs – the usual suspects – are valued above US$ 4 billion. 

Barcelona, despite their debts and high expenses, are valued at US$ 4.76 billion, just ahead of Real Madrid (US$ 4.75 billion). These are both mature business models, so their growth rates are understandably not as high as some of their rivals. Barca’s valuation has grown by 18% since 2019, while Real Madrid’s is up by 12%. 

Bayern Munich and Manchester City have both grown substantially, 39% and 49% respectively, but the biggest increases have come at Paris Saint-Germain (129%) and Liverpool (88%). Notably, the London duo, Chelsea and Arsenal, have more modest growth rates, 24% and 23%. Manchester United, the fourth highest valuation at US$ 4.2 billion, climbed by just 10% over two years and have a high debt value (16%). The biggest debt level can be found at Tottenham, 39%. 

OwnershipValuation US$ bnMovement over two years
2Real MadridSpain4.7512%
3Bayern MunichGermany4.2239%
4Manchester UtdUSA4.2010%
6Manchester CityAbu Dhabi4.0049%
9Paris Saint-GermainQatar2.50129%
10Tottenham HotspurUK2.3042%
Source: Forbes

Not every club has grown in value over the past two years. AC Milan have declined by 4%, AS Roma 12% and, rather surprisingly, West Ham have dropped by 18%. The valuations show the wealth gap in top line football – West Ham are valued at a little over US$ 500 million, around one eighth of the top Premier League clubs, Manchester United, Manchester City and Liverpool. 

Valuations may have increased, but over the past two years, revenues among the top 10 have stagnated or fallen. Some clubs such as Real Madrid (-8%), Manchester United (-13%), Arsenal (-12%) and Chelsea (-7%) have seen their income fall significantly, while Tottenham’s revenues have increased by 13% and Liverpool’s by 9%. 

While football has never had a bigger financial footprint, the emotional pull and media coverage of the game outweighs the economics.  For example, both Real and Barca are not among Spain’s top corporates, even though their brands are recognisable worldwide. A glance at merger activity in the corporate world also underlines the worth of major clubs – a start-up financial technology company, with no profitability, can be valued at more than US$ 5 billion. 

Nevertheless, major companies – eager to capitalise on the profile – are quick to align themselves with football clubs. The airline, telecoms and financial services sectors are especially keen on the game, although the pandemic may curb the appetite of some aviation firms. There are a lot of clubs that would feel the absence of Emirates, for example, in the unlikely event that they withdraw from football.

Forbes will, presumably, issue another review in two years, by which time the full impact of covid-19 will be known. There may be a surprise or two to digest.

Photo: Alamy

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