KPMG have released fifth annual club assessment report, which ranks the 32 most valued European football clubs based on their ‘Enterprise Value’ in January 2020. The report reveals that Real Madrid, Manchester United and Barcelona have secured top three positions. Bayern Munich which exchanged their position with Barcelona, are now at fourth position.
Revenue/Earning for Valuation
Revenue Multiple approach was used to measure the value of the clubs.
This methodology is suitable and often applied for establishing an indicative value of football clubs for three main reasons-
- Revenue figures are quite easy to access and compare, as they are less distorted by accounting adjustments;
- Unlike earnings, which can be negative for many clubs, revenue multiples can be applied also to the most troubled clubs;
- Revenues are not as volatile as earnings.
Factors for Most Valued European Clubs Assessment
In order to reflect club-specific characteristics that influence clubs’ EV, five parameters were considered – each with their own specific weight.
- Profitability – For profitability dimension, the staff costs-to-revenue ratio of the last two financial years was taken into consideration. Wages of players, technical and other staff make up by far the largest part of all expenditures. A high ratio indicates a lower capability to generate bottom-line profits.
- Popularity – Social media followers (Facebook, Twitter, Instagram and YouTube followers) of a team are deemed to be a good indicator of popularity and fan engagement.
- Sporting Potential – As on-field success of a club can generate significant match-day, commercial and broadcasting revenues, “Market Valuation” was used to understand this factor.
- Broadcasting Rights – One of the main source of revenue now-a-days, as matches are broadcast live in more than 170 countries.
- Stadium Ownership – A club-owned stadium generally represents more opportunity to generate revenues from match-day earnings or otherwise.
List of 32 Most Valued European Clubs
|1 Real Madrid CF||Spain||+8%||3,478|
|2 Manchester United FC||England||+4%||3,342|
|3 FC Barcelona||Spain||+19%||3,193|
|4 FC Bayern München||Germany||+7%||2,878|
|5 Liverpool FC||England||+27%||2,658|
|6 Manchester City FC||England||+6%||2,606|
|7 Chelsea FC||England||-0.4%||2,218|
|8 Tottenham Hotspur FC||England||+23%||2,067|
|9 Paris Saint-Germain FC||France||+45%||1,911|
|10 Arsenal FC||England||-8%||1,852|
|11 Juventus FC||Italy||+12%||1,735|
|12 Borussia Dortmund||Germany||+18%||1,281|
|13 Atlético de Madrid||Spain||+19%||1,197|
|14 FC Internazionale Milano||Italy||+42%||983|
|15 FC Schalke 04||Germany||+6%||814|
|16 AS Roma||Italy||+17%||602|
|17 SSC Napoli||Italy||+4%||590|
|18 West Ham United FC||England||-3%||561|
|19 Leicester City FC||England||-12%||558|
|20 Olympique Lyonnais||France||+17%||543|
|21 Everton FC||England||-2%||533|
|22 AC Milan||Italy||-5%||526|
|23 AFC Ajax||Nederlands||+37%||432|
|24 SL Benfica||Portugal||+23%||410|
|25 Valencia CF||Spain||NEW||408|
|26 Sevilla FC||Spain||+6%||372|
|27 Galatasaray SK||Turkey||+49%||366|
|28 SS Lazio||Italy||+11%||328|
|29 Athletic Club Bilbao||Spain||-5%||320|
|30 FC Porto||Portugal||NEW||313|
|31 Beşiktaş JK||Turkey||-19%||310|
|32 Villarreal CF||Spain||+22%||301|
FC Porto (Portugal) and Valencia (Spain) are new entrants in the list of 32 most valued club, whereas Monaco (France) and Celtic (Scotland) have lost their places in top-32, in current year (2020).
Country-wise List – Number of Top Clubs and Average Valuation
|Countries||2016||2017||2018||2019||2020||Average Club Value (€ Million)|