In the last two months, two football clubs in the big five leagues have changed ownership. Houston, Texas based The Friedkin Group expanded their investments in football through the acquisition of Everton from Farhad Moshiri for reportedly £400mn+ or in Euros, approximately €480mn+. Almost a month later, Austin, Texas based Presidio Investors took control of Italian Serie A club Hellas Verona at a reported valuation of €75mn.
The operative word to note here is ‘valuation’.
Multiple factors are linked to a club’s valuation. Without getting into the financial maze, we will concentrate on one of the most important parameters, revenue. Consider this, Deloitte Money League 2025 states Everton’s revenue for 23/24 to be €217mn making the valuation to revenue (V/R) ratio of almost 2 whereas for Hellas Verona, the estimated revenue as per Capology for 22/23 is approximately €98mn giving a V/R ratio of 0.76.
In this blog, we will look at the estimated valuations of football clubs across big five leagues as well as MLS and explore their V/R ratios.
There are multiple methods of determining the valuation of a sports club which might lead to a different valuation for the same club. Leaving the complex methods of calculation to the experts, we refer to the valuation data released by Sportico for our analysis.
The Top 50
Sportico’s calculation of most valuable football clubs is based on the club’s revenues, which were subject to a “team-specific multiplier, a factor remaining the standard metric for valuing sports teams in transactions”. According to Sportico, “the team-specific multipliers were based on multiple factors, including: historical sales, market (size, saturation and interest by prospective owners), strength of brand, on-field performance (historical and recent), terms of facility lease, debt burden and additional obligations, as well as expected future team and league economics”.
The list of top 50 most valued football clubs reveals a few interesting insights:
- Franchises from MLS occupy 20 of the top 50 spots
- The top 15 comprise of 14 clubs from big five leagues, led by Manchester United with a valuation of $6.2bn followed by Real Madrid at $6.06bn and FC Barcelona $5.28bn and 1 from MLS in the form of Los Angeles FC with a valuation of $1.15bn
- The average valuation to revenue (V/R) factor for MLS franchises is as high as 9.7 (2024 values) whereas the range for the clubs’ highest valuation from the ‘big five’ leagues is as low as 5-8 (2023 values) in spite of about 5X revenue
Low V/R ratio in European football could be attributed to three key factors amongst others:
- Promotion & relegation system
- Participation uncertainty in European competitions which lead to additional revenues
- Lesser assets ownership (like own stadium) and/or lesser extent of commercialisation
English Premier League
The 2023 valuation list of Premier League clubs from Sportico shows a very interesting correlation between valuation and revenue. The top end of the list comprises 6 clubs, the big six, with an average valuation of $4.22bn and an average revenue of $725mn (2021/22 figures) making the V/R ratio to be 5.9.
This is where it gets interesting.
The mid-tiered 7 clubs with an average revenue of $254mn, one-third drop from top tier, of are valued at an average of $475mn, that is almost 1/9th of the top tier valuation and a V/R ratio of 1.9! Further, the lowest tiered 7 clubs with an average revenue of $207mn have been valued at an average of $224mn, a drop of over 50% from the mid-tier clubs with a V/R ratio of 1.1!
A plausible explanation for the high valuations of top-tier, big six clubs can be given as:
- Global brands with a huge following
- High existing commercial revenue with a potential of further growth
- Most top-tiered clubs are contenders of European competitions which has a potential of strong revenue additions
The low valuation for lowest-tiered can also be explained as possible relegation to the second tier league affecting revenues considerably. It is the mid-tier clubs with a valuation similar to the 29th ranked franchise of MLS, which is perplexing!
MLS
The franchise valuations and the V/R ratio at the MLS is completely different and unlike their European footballing counterpart leagues. Few things are quite unique:
- The valuation range is not extreme throughout the 29 franchises. It can be gauged from the ratio between franchise with the highest valuation (LAFC, $1.28bn, Sportico 2024) and the one with lowest valuation (CF Montreal, $450mn, Sportico 2024) which is a decent 2.84 unlike the European leagues. For example, the ratio between the highest and lowest valued club in Premier League 2023 is a whopping 41!
- V/R ratio for MLS franchises is the highest in football at 9.7 (2024 values) and second highest across all leagues after NBA and higher that even NFL. The V/R ratio for the clubs with highest valuation in European leagues is 8.0 (Manchester United 2023)
- The closed league system possibly gives MLS franchises a higher valuation in spite of recording the one of the lowest revenues across top tier leagues in European football
In the 2024 valuation of MLS franchises released by Sportico recently, Inter Miami led the table with the fastest CAGR of 27% in the last 3 years, largely due to Messi’s arrival. Inter Miami CF recorded a whopping 322% growth in revenue in 2024 over 2021 and 50% growth over 2023. However, in terms of valuation growth over 2023, NYCFC tops with a 19% growth followed by Inter Miami with 17%, Columbus Crew and FC Cincinnati both at 12% and LAFC & LA Galaxy both recording a 11% growth.
In Conclusion
There are several factors which point to a growing valuation in the coming years. For MLS, increasing acceptance of football as a widespread sport leading to larger attendances in stadiums and increasing viewership, greater commercial interests from sponsors, players in prime opting for MLS teams which further increases enterprise valuation.
For European football, it rides on factors like increasing interests from private equity investments, next-gen talent pool commanding higher price, increasing revenue sources like Club World Cup for some clubs and a reinvigorated focus on stadium infrastructure development which adds to the revenue considerably.
It is going to get more exciting in the coming period.
