Despite a turbulent season, this year sees Real Madrid leapfrogging Manchester United who, after three years of stability on the podium, drop to second in the “Football Clubs’ Valuation: The European Elite 2019” report, prepared by KPMG Football Benchmark team, reports www.fcbusiness.co.uk
Madrid’s LaLiga rivals, FC Barcelona, slip to 4th spot, letting Germany’s Bayern München take the 3rd position.
The aggregate enterprise value (EV) of the top 32 clubs in consideration has increased by 9% year on year, demonstrating that the football business is growing at a significantly faster pace than Europe’s economy in general. These are the most striking conclusions of KPMG’s Football Benchmark team’s latest club valuation report.
The fourth annual study, “Football Clubs’ Valuation: The European Elite 2019” ranks the 32 most prominent European clubs according their enterprise value, calculated by KPMG’s proprietary algorithm.
Real Madrid can attribute their success of taking the lead primarily to the massive UEFA prize money rewarding their three UEFA Champions League titles in a row. In addition, they benefitted from their improvement in profitability and from a cumulated 29% operating revenue growth, driven mainly by increasing commercial revenues over the past four years.
Further changes in the top 10 include Tottenham Hotspur surpassing Juventus to reach the 9th position, and Arsenal dropping two spots to land in 8th, surpassed by Chelsea and Liverpool. The latter two clubs boast an EV in excess of EUR 2 billion for the first time, making eight of the top 10 clubs to have now more than EUR 2 billion EV.
“For the third consecutive year, the overall EV of the 32 most prominent European football clubs has increased by 9% (35% over the past three years),” Andrea Sartori, KPMG’s Global Head of Sports and the author of the football clubs’ valuation report series commented.
“This growth rate is in contrast with the overall trend of the major European Stock Exchanges, notably the STOXX Europe 50 Index1, showing a year-on-year decrease of -13% (-9% from 2016), and demonstrating the different pace at which the football industry is evolving.
“The transition of major clubs into media and entertainment companies, with global brand exposure, also helps create more stable and predictable cash flows and consequently better warranties to investors and financiers. It comes by no surprise, that such remarkable growth has heated the debate concerning the transformation of European clubs’ competition structure.
“However, the stakeholders involved do not necessarily share the same interests and rather sit on conflicting positions that are likely to make future decisions even more challenging.”