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HomeWorldMan United, Real Madrid Lead –

Man United, Real Madrid Lead –

This season marks 10 years since Manchester United last won the Premier League title, and the club has lost money in four of the past five seasons. But the slump on and off the field did not deter a pair of bidders from offering at least $6 billion for the Red Devils after the Glazer family hired Raine Group in November to “consider all strategic alternatives.” Multiple private equity firms are also mulling minority investments in the club.

The ongoing sale process kicked off months after two other money-losing global soccer giants changed hands at 10-figure valuations. In May, Todd Boehly and Clearlake Capital completed the purchase of Chelsea for $3.16 billion, and RedBird Capital Partners bought AC Milan of Italy’s Serie A four months later for $1.2 billion. These are three of the 15 most valuable soccer clubs on the planet.

“European football is the best live-event intellectual property in the world,” Gerry Cardinale, RedBird founder and managing partner, said in a phone interview.

The private equity firm manages $8.6 billion in assets, and Cardinale helped build the YES Network, On Location and Legends, but he sees a substantial opportunity in global football. “I think AC Milan is one of the best in the money options that I’ve seen,” he said. “It is one of the top global brands in European football and an undervalued asset. It’s a hidden gem.”

Cardinale cautions that Americans looking at teams on the continent need to be respectful of the public-private partnership in Europe that he calls the “biggest fundamental philosophical difference” versus the U.S.

Nonetheless, investors are flocking to soccer with an eye towards professionalizing the business side of these clubs and improving profitability.

The result: soaring valuations for football teams around the world. Sportico spoke to more than two dozen bankers, lawyers and investors directly involved in soccer to gauge the 50 most valuable teams. Manchester United leads the way at $5.95 billion, followed by Real Madrid ($5.23 billion), FC Barcelona ($4.95 billion), Liverpool ($4.71 billion) and Bayern Munich ($4.46 billion).

Sportico’s valuations are based on team-specific revenue multiples, which remains the standard metric for valuing sports franchises in transactions, as earnings can have dramatic fluctuations from year to year, based on player spending and special expenses. In addition, positive cash flow is a pipe dream for many soccer teams. Multipliers were based on several factors, including: historical sales, market, brand, on-field performance and facilities. For the Premier League and MLS, we used our previous valuations compiled in January (EPL) and late September (MLS); click here for the full top 50 teams and complete methodology.

The top 50 are collectively worth $73 billion, with Major League Soccer’s New York Red Bulls the cutoff at $525 million. Overall, teams from 10 leagues and 11 countries made the cut—MLS had teams from the U.S. and Canada. MLS did not place any teams in the top 15, but it had 18 teams overall in the top 50, twice as many as the EPL; Serie A was third with seven entries.

The 18 clubs from the world’s 15th-ranked soccer league based on on-field results outnumber the 17 total from the top three leagues—EPL, Bundesliga and LaLiga. Welcome to the mixed-up, upside-down world of soccer investing.

Scarcity has been a major factor in driving franchise values higher in the four biggest U.S. sports leagues. There are only 32 NHL and NFL teams, and 30 in both the NBA and MLB. The average NFL ownership tenure is 40 years, so opportunities to secure these assets are rare. MLS has fed off this scarcity to attract investors at a lower price point than the multibillion-dollar outlays required in the NFL and NBA. The prize is a franchise in the world’s most popular sport and its biggest economy without the threat of relegation hanging over your head. The new Apple deal and 2026 World Cup in North America also provide opportunity.

Most MLS investors are also thinking about real estate as part of their business. “The future of stadiums is to have them anchor or be part of a bigger development that has life and activities 365 days a year,” Jorge Mas, Inter Miami co-owner, said in a September phone interview. “Stand-alone stadiums don’t work anymore.”

There is scarcity in global football, but it works a bit differently. At the top of the food chain, there are 10 massive brands and clubs that are all valued at more than $3 billion. Arsenal was the only team in this group with revenue below $590 million last season, and the six most valuable teams all generated at least $300 million in commercial revenue from sponsors and merchandise. They are basically relegation-proof and comparable to NFL and NBA franchises, although still valued at discounts to them, as the economic model is much worse without any meaningful wage caps. Sportico values the top 10 at an average of 6.5 times revenue, versus 7.6 for the NFL and 8.9 for the NBA.

There are five other billion-dollar clubs by Sportico’s count, but the drop-off is nearly $1.5 billion from No. 10 Tottenham Hotspur at $3.19 billion to 11th-ranked Juventus at $1.73 billion. AC Milan checks in at No. 14 at $1.2 billion, just ahead of longtime Serie A rival Inter Milan ($1.12 billion), which has also engaged Raine to explore a sale.

“I always look for dislocation,” Cardinale said. “And I look for opportunities where my capital can solve problems, and that was very apparent to me, both with AC Milan on the micro level and Serie A on the macro.” Cardinale is laying the groundwork for a new stadium for Milan, but he also wants to close the media rights gap between Serie A and Spain’s LaLiga, which is currently two times higher, as well as the Premier League where it is three times.

The lack of promotion and relegation in MLS serves as its own kind of scarcity, as it is rare in a sport that was built on a system of teams moving up and down based on performance. MLS revenues average only $57 million per team, but the lack of “pro/rel” helps set a valuations floor of roughly $400 million—higher than half the Premier League—and a 10.2 average revenue multiple that tops the NBA.

MLS teams generate a fraction of the revenue of the big clubs and almost all of them are losing money, but they make up more than half of the teams ranked between 16 and 50 by value. Asset scarcity largely disappears beyond the top 15 European clubs, and relegation risk crushes revenue multiples. There are 98 total teams in Europe’s big five leagues and more than 4,400 professional soccer clubs around the world, according to FIFA.

“There are so many different markets and different price points, it really is a bit of a choose your own adventure with being an investor in global football,” AJ Swoboda, managing director at consultancy Twenty First Group, said in a phone interview. “There are six or seven different strategies or incentives of why someone would invest in sports franchises, but particularly global football.”

Swoboda runs through the list: access to global markets, improving your global reputation, asset appreciation, sporting merit, real estate and pure vanity play.

Valuations in major U.S. sports franchises have been on a steady multi-decade climb as media rights deals rose, but European soccer can offer significant valuation swings based on performance. Everton is valued at $600 million and ranks 35th overall. It is traditionally a mid-table EPL club and has a new stadium under construction. But if the season ended today, Everton would be relegated, and its value would sink. Newcastle United just missed the top 50, but it is on the rise after Saudi Arabia’s Public Investment Fund paid $415 million for the team in 2021. Newcastle is on track to qualify for Champions League and triggering talk that the Premier League’s Big 6 clubs might need to make room for one more.

Investing in Europe is not for the faint of heart, as the red ink can be staggering. Roma has racked up €893 million in cumulative losses—$982 million based on current exchange rates—over the last 13 years, according to soccer finance expert Kieron O’Connor. Almost every Serie A team lost money during the 2021-22 season. Shad Khan has lost more than $400 million since he bought Fulham a decade ago. PSG built a mega-club by importing expensive superstars like Lionel Messi, Neymar and Kylian Mbappe. Its inflated payroll triggered a $400 million loss last season.

“Cash flow is not just going to magically appear; you’re going have to do something,” Cardinale said. “If you believe fundamentally in the quality of this intellectual property and the must-value nature of this content locally, countrywide, regionally and globally, then there is absolutely no other answer than these all should be cash-flow-generating properties.”

Several clubs outside the big five leagues have consistently made money, thanks to player trading. Ajax of the Netherlands ($710 million current value) and Portugal’s SL Benfica ($640 million) have first-rate academy systems and made the top 50. Benfica sold players worth $778 million over the last five years with a net trading profit of $396 million, according to Transfermarkt.

Three non-MLS teams in the Americas also cracked the top 50: Mexico’s Club America ($735 million) and Guadalajara ($695 million) and Brazil’s Flamengo ($540 million). Investors say it takes a “strong stomach” to dive into both countries, but these clubs present an opportunity with their gigantic followings, and their leagues could see fundamental structural changes in the coming years.

Generating more revenue would help the profit picture of global soccer, and investors are pouring money into the sport, hoping to make the businesses as big as the brands. Private equity firms now own stakes in six of the 15 more valuable clubs. The top 50 teams generated $13.8 billion in revenue during their most recent full seasons. The total wouldn’t crack the Fortune Global 500 that tracks the world’s largest companies by revenue. The cutoff there is $29 billion. Yet, these teams have staggering followings and customer affinities that would make the biggest brands blush. The 10 most followed sports teams on social media are all European soccer clubs, and they have a combined following of nearly 2 billion, according to data analytics firm KORE. Monetizing those fan bases more efficiently is the key.

Cost restrictions, similar to payroll limits in American sports leagues, would also help. “In the future, we have to seriously think about a salary cap,” UEFA president Aleksander Čeferin said last week on the Men in Blazers podcast. “If the budgets go sky-high then our competitive balance is a problem.” He added: “Big clubs, small clubs, state-owned clubs, billionaire-owned clubs—everybody agrees.”

With assistance from Asli Pelit



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