Nearly half of the top 20 richest clubs in Europe

The Premier League’s status as the world’s richest domestic league in football has been highlighted in a new report on European club valuation, with nine out of the top 20 coming from England.

Budapest's Football Benchmark Group's Football Club Valuation Report is in its 10th year, ranking the top 32 clubs in Europe by corporate value (i.e., the total value of the club's equity plus its net debt).

Last year, Real Madrid became the first club with a corporate value of 5 billion euros, and this year it exceeded 6 billion euros, ranking first with a valuation of 6.3 billion euros, nearly 1 billion pounds higher than Manchester City, which ranked second, and Manchester United is closely behind.

While football benchmarks believe that Manchester United's corporate value has grown 4% over the past 12 months, from 4.9 billion euros to 5.1 billion euros, currently equivalent to 4.3 billion pounds, which is lower than the price when Jim Ratcliff paid 1.25 billion pounds to buy a 27.7% stake in the club in early 2024. Given the club's struggles on the court, the British billionaire may be thankful that his investment has not shrunk further.

Barcelona and Bayern Munich ranked in the top five in this year's report, with Liverpool and recovery Arsenal following behind, followed by Paris Saint-Germain, Tottenham Hotspur's biggest increase in the past decade, and Chelsea finished the top ten.

Obviously, Ratcliff is not the only Premier League investor who needs patience to expect returns, as football benchmarks believe that Chelsea's corporate value has dropped by 8% year-on-year - the only drop in the top 10 - now the West London club is worth £2.5 billion, the price of the Todd Burleigh-Clear Lake Capital Consortium's acquisition of Roman Abramovich in 2022.

However, overall, the report once again confirmed the financial success of the Premier League, with West Ham United, Aston Villa (a year-on-year increase of 42%) and Everton all ranked in the top 20. Its status will only be stronger as the Premier League continues to be far ahead of domestic competitors in terms of broadcast, business and game-day revenue and secures six Champions League qualifications next season.

However, increased revenue does not mean increased profits, and most clubs reported losses last season, but these losses have been decreasing every year since the COVID-19 pandemic put European football in crisis in 2022. The total losses of the 32 most valuable clubs in Europe last year just exceeded £430 million, down from the almost bleak £2.3 billion in 2022.

In the report's introduction, Andyya Satori, CEO and founder of Football Benchmark, pointed out that "profitability remains a key challenge...mainly because team costs have grown faster than operating revenues over the past decade (78% vs. 72%)."

However, Satori does see the industry returning to pre-pandemic sustainability levels, with UEFA's new financial fair play system starting to put some downward pressure on costs while club revenues continue to grow. The average team cost-to-revenue ratio for the top 32 clubs has dropped from 95% in 2023 to 82% this year, while UEFA aims to reduce the club to 70% next year.

club valuations are of course famously difficult to calculate, and the most accurate assessment is that their value depends on how much someone is willing to pay for it. However, football benchmarks explain its methodology in its report.

Like most people trying to make these estimates, Satori's team used the income multiple method to value the club, i.e. multiply the club's annual operating income by a baseline based on a club that was recently acquired or publicly listed in the same league.

Football benchmarks then use a "proprietary algorithm" based on five parameters to optimize this number: profitability, popularity measured by social media attention, competitive potential defined by team value, broadcast protocols for the league and stadium ownership.

Overall, the average revenue multiple of corporate value in football benchmark reports rose from 3.4 to 4.9 over the past decade, which is impressive, but still half the average revenue multiple used to calculate the value of NFL teams. In fact, all teams in major North American leagues are given a higher revenue multiple than the top European football teams due to stricter cost controls, longer broadcast protocols, updated stadiums and no relegation. The report also explains why some teams that are almost certainly worth more than Spain's No. 32 club on the list (valued at £392 million) are not included in the rankings. For example, according to the recent Deloitte Money League report, Newcastle United is the 15th-ranked club in the world's football annual revenue. To qualify for the football benchmark report, clubs need to rank in the top 50 in operating revenue and UEFA’s five-year club coefficient, or in the top 30 in the number of social media followers as of January 1, 2025. This year's League Cup champions failed to meet the second and third conditions, but participating in the Champions League again next season may solve the problem.