LONDON: Premier League powerhouse Manchester United remain Europe’s most valuable club despite failing to win a trophy this season, according to a new report by auditors KPMG.
For the second year running, United beat both LaLiga giants Real Madrid and Barcelona to the title in KPMG’s report “Football Clubs’ Valuation: The European Elite 2018”.
At €3.255 billion, United are the only club remaining above the €3 billion threshold in enterprise value.
With a 5% EV growth in EUR and 10% in GBP, the ‘Red Devils’, despite significantly worse sporting results compared to Real Madrid and a slight decrease in operating revenues, were able to slightly improve on their high level of profitability and extend their lead over ‘Los Blancos’.
For Real Madrid, winning the quadruple in the 2016/17 season came at a major cost, as the club reduced its profitability parameters and, although not significantly, their final EV (-2%), despite registering an 8% operating revenue growth. On the other hand, Barcelona recorded a minor 1% increase, while FC Bayern Munich have narrowed the gap and got closer to the podium.
With a combined enterprise value of €32.5 billion, the aggregate value of Europe’s 32 leading clubs grew by 9% in comparison to last season.
Transfer deals and spiralling staff costs have not prevented clubs from registering a striking upward trend, as the profits before taxes increased by some 17 times compared to the previous year, the study shows.
English clubs, enjoying significantly higher broadcasting revenues than their peers, occupy nine spots in the top 20 as a result of West Ham United FC joining the ranking. Of those nine teams, six are in the top 10.
Andrea Sartori, KPMG’s Global Head of Sports and the report’s author, commented: “Despite lower growth (14 percent) versus last year, the football industry continues its rise, with a second successive season of an EV increase (9 percent) for the top 32 clubs included in our ranking. Overall growth is driven by different factors, such as the increase in operating revenues of the top 32, at 8 percent. Eye-catching transfer deals and spiralling staff costs have not prevented such clubs from registering a striking upward trend, as the profits before taxes increased by some 17 times in comparison to the previous year.”
Sartori continued: “One of the reasons for this growth can be found in the significant influence exercised by English clubs, as well as the improved financial health of many mid-size clubs within the ranking, which also reflects compliance with the UEFA FFP Regulations.”
The top 10 ranking order has not changed since last year, with Tottenham Hotspur FC taking the headlines again, displaying the highest EV increase (27% in EUR, 33% in GBP). Such an increase is even more prominent if considered over the past two seasons (61% or €485 million).
Further down the ranking, SSC Napoli (17th by EV with 27% growth) becomes the second most valuable club in Italy, behind seven consecutive Serie A winner Juventus FC, and ahead of the two Milan clubs AC Milan (18th) and FC Internazionale Milano (20th). The Italian club SSC Napoli and English club Leicester City FC are the only two that recorded a pre-tax profit higher than €100 million, with 101 million and 108 million respectively.
Taking a look outside of the “big guns” of European football, Beşiktaş JK’s top growth (52%) does not go unnoticed, capitalizing on the first full season playing in the brand new Vodafone Arena and advancing to the Europa League quarter finals in the 2016/17 season.
Impact of social media on EV
Performance on social media is one of the five drivers reflected in determining the EV of a football club. As there is a clear correlation between a club’s social media presence, on-pitch success, brand value and ultimately EV, this year a chapter has been dedicated to the subject.
In total, the top 32 clubs according to EV gained close to 111 million new followers across all social media platforms, representing a 10% percent increase over the course of the period under review (from 1 August 2017 to 22 April 2018). A noticeable trend for the overall growth among the top 32 is the rise of Twitter (26%) and Instagram (17%), as opposed to Facebook’s 4% increase.
The world’s 10 most valuable football clubs:
1. Manchester United €3.255bn
2. Real Madrid €2.920bn
3. Barcelona €2.783bn
4. Bayern Munich €2.552bn
5. Manchester City €2.160bn
6. Arsenal €2.102bn
7. Chelsea €1.765bn
8. Liverpool €1.580bn
9. Juventus €1.302bn
10. Tottenham Hotspurs €1.286bn
