Nine Premier League clubs in top 20 richest in Europe, report says

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The Premier League’s status as the richest domestic league in global football has been underlined by a new report into European club valuations, with nine of the top 20 coming from England.

Now in its 10th year, the Football Clubs’ Valuation report is published by the Budapest-based Football Benchmark Group and it ranks the top 32 clubs in Europe by enterprise value, which is the total value of the club’s equity plus its net debt.

Having become the first club to achieve an enterprise value of €5billionn last year, Real Madrid burst through the €6bn mark this year to top the ranking with a valuation of €6.3bn (£5.2bn; $6.5bn) this year, almost £1bn clear of Manchester City in second place, with Manchester United not far behind their cross-city rivals.

While Football Benchmark believes that Manchester United’s enterprise value has grown by 4 per cent over the last 12 months from €4.9bn to €5.1bn, that currently converts to £4.3bn, which is lower than the price Sir Jim Ratcliffe bought in at when he paid £1.25bn for 27.7 per cent of the club in early 2024. Given the club’s on-field struggles, the British billionaire may be grateful that his investment has not fallen further.

Barcelona and Bayern Munich round out the top five in this year’s report, with Liverpool and a resurgent Arsenal close behind, followed by Paris Saint-Germain, with Tottenham Hotspur, the biggest climber over the last decade, and Chelsea completing the top 10.

It would seem that Ratcliffe is not the only Premier League investor who will have to be patient to see a return, as Football Benchmark believes Chelsea’s enterprise value has dropped eight per cent year-on-year — the only faller in the top-10 — with the west London club now worth £2.5bn, which is what the Todd Boehly-Clearlake Capital led consortium paid Roman Abramovich for the team in 2022.

Overall, though, the report is another glowing reference for the Premier League’s financial success, with West Ham United, Aston Villa (up a remarkable 42 per cent year-on-year) and Everton all making the top 20. With the Premier League continuing to stretch away from its domestic competitors in terms of broadcast, commercial and matchday revenue, as well as securing six Champions League qualification spots next season, its position is only going to get stronger.

However, increased revenues are not the same as increased profits, with most of the clubs in the report posting large losses last season, although those deficits have reduced every season since 2022, when COVID-19 plunged European football into crisis. The aggregate loss for the 32 most valuable clubs in Europe last season was just over £430m, down from the catastrophic figure for 2022 of almost £2.3bn.

In his foreword to the report, Football Benchmark CEO and founder Andrea Sartori notes that “profitability remains a key challenge…largely due to squad costs growing at a faster pace than operating revenues over the past decade (78 per cent vs 72 per cent)”.

But Sartori does see signs of the industry returning to its pre-pandemic levels of sustainability, the UEFA’s new financial fair play regime starting to exert some downward pressure on costs, while club revenues continue to grow. The average squad cost-to-revenue ratio among the top 32 fell from 95 per cent in 2023 to 82 per cent this year, with UEFA aiming to bring clubs down to 70 per cent next year.

How are the valuations worked out?

Club valuations, of course, are notoriously difficult to calculate, with the most accurate assessment being they are only worth what someone is willing to pay for them. But Football Benchmark does explain its methodology in its report.

Like most people who attempt to make these estimates, Sartori’s team uses the revenue-multiple approach to valuing clubs, with each club’s annual operating revenue multiplied by a number that is benchmarked against clubs from the same league that have recently been bought or are publicly listed.

Football Benchmark then finesses that number with a “proprietary algorithm” that is based on five parameters: profitability, popularity as measured by social media followings, sporting potential as defined by squad value, the league’s broadcasting deals and stadium ownership.

Overall, the average revenue multiple for the enterprise values in Football Benchmark’s reports over the last decade has risen from 3.4 to 4.9, which is impressive but still half the average revenue multiple that is applied to work out the value of NFL franchises. In fact, all teams in the major North American leagues are valued with a higher revenue multiple than the top European football sides, because there are stricter cost controls, longer broadcast deals, newer stadiums and no relegation.

The report also explains why some teams that are almost certainly worth more than the £392m valuation given to the 32nd club in the list, Spain’s Real Betis, are not included in the rankings — Newcastle United, for example, who are 15th in world football in terms of annual revenue, according to the most recent edition of the Deloitte Money League report. To qualify for the Football Benchmark report, you must be in the top 50 in operating revenues and UEFA’s five-year club coefficient, or top 30 by social media followers as of January 1, 2025. This year’s Carabao Cup winners do not meet the second and third criteria but another helping of Champions League football next season may remedy that.

(Photo: Michael Steele/Getty Images)

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