The piles of cash thrown off by European soccer competitions are a big reason that Real Madrid, worth $5.1 billion, 7% more than last year, has reclaimed its spot as the world’s most valuable soccer team.
By capturing a record 35th domestic league title in 2021-22, Real Madrid will generate the most revenue in La Liga, and by qualifying for a record eighth Champions League final (to be played this Saturday against Liverpool), the club will earn over $100 million. In addition, it was announced last week that Real Madrid, currently undergoing an $850 million stadium renovation, had secured $379 million as part of an agreement with Sixth Street and Legends in which Sixth Street “acquired the right to participate in the operation of certain businesses of the new Santiago Bernabéu stadium for a period of 20 years.” To pay for its new stadium, Real Madrid borrowed an additional $236 million from JP Morgan and Bank of America in November, bringing total borrowings from the banks to $842 million.
Real Madrid, which last held the top spot in 2019 (Forbes did not compile soccer team values in 2020), has now been the most valuable soccer team in six of our 18 rankings. (Manchester United leads with 11, most recently in 2018.)
Barcelona, which was No. 1 in the 2021 ranking, is moving even more aggressively on the stadium front, spending $1.6 billion to build the largest soccer stadium in Europe. To help pay for it, the club signed a multi-year $458 million shirt and stadium sponsorship deal with Spotify and is reportedly nearing a $960 million deal with Goldman Sachs and All Sport Finance in exchange for a 30% stake of Barcelona’s broadcast revenues and a portion of future revenues from the team’s new stadium complex. Worth $5 billion, 6% more than a year ago, Barcelona is the second-most-valuable soccer team and is tied with the NFL’s New England Patriots as the seventh-most-valuable team in any sport.
Rounding out soccer’s top three is Manchester United, up 10% to $4.6 billion. The Red Devils have by far the most supporters of any English team and, with $128 million of operating income during 2020-21, were the second-most-profitable team on our list. But Manchester United was eliminated in the Champions League’s Round of 16 this season, and its sixth-place finish in the Premier League means it will miss out on 2022-23 Champions League prize money.
Indeed, even with a dearth of fans at games because of the Covid-19 pandemic during the 2020-21 season, the average value of the top 20 teams increased 10% from the prior year, to $2.53 billion. (In euros, the average value this year was 2.38 billion, 15.6% more than last year.) And they are financially muscular. Operating income (earnings before interest, taxes, depreciation and amortization and player trading) was $860 million on $9.68 billion of revenue. Average debt/enterprise value: 9%.
Why? The top soccer teams are global brands with massive numbers of supporters, monetized in large part with rich television deals. Consider that earlier this month a group led by Todd Boehly and Clearlake Capital plopped down $3.1 billion—among sports team sales, second only to the $3.2 billion paid for the NBA’s Brooklyn Nets in 2019—to buy Chelsea from Roman Abramovich. The group also promised to commit another $2.16 billion in future investments, including the stadiums used by Chelsea’s men’s (Stamford Bridge) and women’s (Kingsmeadow) soccer teams.
Under the right ownership, tarnished soccer brands can be quickly turned back into gems. AC Milan was in financial ruins with negative equity of $37 million when Elliott Management took the Italian club over after its owner defaulted on a loan payment in 2018. Elliott invested hundreds of millions of capital into AC Milan, eliminated almost all of the team’s debt and lowered player spending relative to revenue, and the team ended fiscal 2021 with positive equity of $70 million. At the same time, AC Milan improved on the pitch. Last May, the team qualified for the Champions League for the first time in seven years and this season captured its first Serie A title in 11 years. (You can watch Forbes’ interview with Elliott Management’s Giorgio Furlani here.) The investment firm may soon sell AC Milan for in excess of $1.1 billion.
The revenue and operating income figures listed are for the 2020-2021 season, converted to U.S. dollars based on average exchange rates during that season (1 euro = $1.188, 1 GBP = $1.340). Revenue figures reflect proceeds the soccer team generates from broadcasting, commercial and match-day events. Team values are enterprise values (equity plus net debt) and include the economics of the team's stadium (but exclude the value of the real estate itself), based on comparable transactions. Operating income is earnings before interest, taxes, depreciation and amortization, player trading and disposal of player registrations. Debt is interest-bearing borrowings due in more than one year (including stadium debt). The exchange rates used to convert team values and debt to U.S. dollars (1 euro = $1.053, 1 GBP = $1.247) are as of May 17, 2022. Sources include team annual reports and documents, team executives, credit rating agency reports, sports bankers and the Deloitte Football Money League report.