Is your favourite football club worth its salt? Let us roll.
The international auditing company, KPMG, recently released their second edition of the “Football Clubs’ Valuation: The European Elite 2017. In a publication by Andrea Sartori, Partner
KPMG Global Head of Sport, it looked at the Enterprise Value (EV)
of the 32 most prominent
European football clubs
as at 1 January 2017.
Real Madrid CF and Manchester United shared top spot last year. However, Man U stand clearly at the top of the 2017 ranking, enjoying a 7%
EV increase compared to Real's 2% growth - more than
EUR 100 million.
This represents a record EUR 3
billion threshold despite
missing UEFA Champions
League qualification at the
end of the 2015/16 campaign, The Red Devils continued to achieve consistent off-the-pitch
The top four clubs surpassed the EUR 2 billion
landmark. FC Barcelona and Bayern Munich are third and fourth, the later's 14% increase
narrowing the gap with the Catalans.
The supplied data confirmed that top 10 clubs comprised more
than two-thirds of the overall EV. Manchester City
FC overtook Arsenal FC in 5th
The best part is that Tottenham
Hotspur FC ousted Paris Saint German
FC from the 10th position,
thus increasing the number of
English teams in this top ranking
to six, together with two Spanish,
one German and one Italian.
This has been attributed to the strength of the English Premier League, combined with their good operating and financial results.
Spurs are displaying
a significant upward trend,
especially in terms of profitability
and squad value, as demonstrated
by a higher EV growth (26%), and their future looks very bright as they
plan to move to a new multipurpose
stadium, and as they
have recently secured UEFA
Champions League qualification
for the second year in a row.
Only Juventus FC remained the Italian
club in the Top 10, with a 24% EV growth. In terms of growth per se,
Olympique Lyonnais score the
best result (+71%), followed suit
by Galatasaray SK (+68%) and
Sevilla FC (+44%).
City FC, in probably the greatest
sporting fairy-tale of all time, when lifting the English Premier League
crown in 2015/16, earned a remarkable 16th position
in the report, whose analysis does not consider
the business and sporting results
achieved by each club in the 2016/17
"The proprietary algorithm developed
by KPMG and applied for the
purposes of this report is consistent
with the one applied last year.
It is based on the Revenue Multiple
approach, where each club’s
revenues are multiplied by a specific
multiple which takes five metrics into
account—each one with a specific
between clubs, the markets and the
economies in which they operate", says the report.
Amounts of broadcasting
revenues and their distribution
method play a crucial role in the
income generation potential of football
clubs, with a significant impact on
European clubs’ EV.
Few difficult challenges factored in the making of the report included the differences in
accounting practices across
countries, differences in reporting
currencies, fluctuation of exchange
rates and differences in financial