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Thy Name is Valuation – Part II

June 6, 2024

Thy Name is Valuation – Part II - SBI Barcelona

In the previous part of the series on valuation, we touched upon the variations in valuations of different football leagues and compare them with that of professional sports leagues/clubs in the USA

Continuing, we profile the two most prolific leagues, the English Premier League, the highest revenue generating league in the football industry and MLS, the league with high average club valuations

Premier League: The High Revenue League

As per 2023 Sportico valuations, Premier League comprising 20 clubs (22/23 season) had a cumulative valuation of $30bn with an average of $1.5bn per club. Looking closely, the list of clubs can be segregated into 3 buckets

  • Top 6 clubs, average valuation $4.22bn
  • Club 7-13, average valuation: $463m
  • Club 14-20, average valuation: $238m
Thy Name is Valuation – Part II - SBI Barcelona

The other interesting point to note is revenue. The first bucket with top 6 clubs shows an average revenue of $725m. The second bucket with 7 clubs displays an average revenue of $241mn and the last bucket of 7 clubs, an average revenue of $220m. While the average valuation of 2nd bucket is 2X that of the third bucket the revenue is almost equivalent

Valuation to Revenue Multiplier

Like the valuations, the multiplier can be seen in three buckets

  • Top 6 clubs: 5.9
  • Next level of 7 clubs: 1.5
  • Third level of remaining seven clubs: 1.1, valuation is almost equivalent to the revenue

Relegation to the second tier league usually comes from the clubs placed in the third level and this could be the reason why valuations don’t get affected

Thy Name is Valuation – Part II - SBI Barcelona

MLS: The High Valuation League

In contrast to the Premier League, the cumulative valuation of MLS clubs in 2024 is $19.65bn with an average valuation of $678m. The cumulative valuation has grown by 16% over 2022 while the average revenue has grown by 62% (considered for 28 teams, St. Louis City was added 2023 as an expansion team)

The five most valuation teams of MLS are

  • LAFC: $1.15 billion
  • Atlanta United: $1.05 billion
  • Inter Miami: $1.02 billion
  • LA Galaxy: $1.0 billion
  • NYCFC: $840 million
Thy Name is Valuation – Part II - SBI Barcelona

In case of MLS too, we can create three buckets of average valuation:

  • Top 4 comprising LAFC, Atlanta United, Inter Miami and LA Galaxy: $1.05bn
  • Next 14 teams: $696mn
  • Final 10 teams: $506mn

Strangely valuation to revenue multiplier over the period seems to have rationalized. In 2022, when the valuation was carried out, the average V/R ratio came out to be 14 which has now stabilized at 9.8 in 2024

Fastest Growing Teams

Lionel Messi’s arrival Inter Miami has led to a complete turnaround for the team. From dominating on-field performances in 2024 to commercial success and skyrocketing valuation, it’s seeing everything. Inter Miami is leading the group of teams with maximum increase in valuations since 2022. Five teams with the highest growth are

  • Inter Miami: 74%
  • LAFC: 28%
  • Austin FC: 27%
  • Philadelphia Union: 23%       
  • Atlanta United: 23%
Thy Name is Valuation – Part II - SBI Barcelona

In revenue terms too, Inter Miami has growth by a whopping 182% to reach $127mn in 2023 If reported projections are to be believed, they are set to breach the $200mn revenue mark in 2024 which would in turn make Inter Miami the most valued football team in MLS

Conclusion

There are several factors which point to a growing valuation this year and 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 broadcast revenue for some leagues and so on.

The valuation graph will keep rising high!

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