United remains king of sports team valuations
17 Jul 2012
Manchester United retained its place at the top of Forbes magazine’s annual ranking of the world’s most valuable sports teams, but saw its valuation suffer a slight fall from recent figures.
The Barclays Premier League giant, which this month confirmed that it plans to launch an initial public offering (IPO) on the New York Stock Exchange (NYSE), has been granted a valuation of US$2.23 billion by Forbes, compared to a figure of $2.235 billion released in April’s list of the most valuable football teams. Forbes highlighted United’s prowess in exploiting the sponsorship market as one of the key reasons behind its valuation. Insurance company Aon pays $31 million a year for its shirt sponsorship deal that runs through 2014, while DHL Express’ four-year training kit sponsorship is worth a reported $62 million and Nike’s sportswear agreement is worth a minimum of $39 million annually for United based on overall sales in a deal through 2015.
With Real Madrid occupying second position, football locks out the top-two positions in Forbes’ top-10, with the sport boasting four teams in the upper reaches of the list, along with the National Football League (NFL). Major League Baseball (MLB) places two teams inside the top-10. Spanish Primera Division champion Real has been valued at $1.88 billion compared to April’s figure of $1.877 billion. Forbes noted that the club had the highest revenues of any football team during the 2010-11 season and was the most profitable team in all of sports during 2011, with operating income of $214 million. The NFL’s Dallas Cowboys tied with MLB’s New York Yankees for third spot. Forbes said that the Cowboys stand apart from their NFL rivals thanks to the revenue generating power of their $1.2 billion Cowboys Stadium. The business and financial news organisation said that Cowboys Stadium generates more than $100 million annually from premium seating and nearly $60 million from sponsors like AT&T, Bank of America, Ford Motor and PepsiCo. The NFL’s other entries in the top-10 are fifth-placed Washington Redskins ($1.56 billion), joint-sixth position New England Patriots ($1.4 billion) and ninth-placed New York Giants ($1.3 billion). Forbes said NFL franchises are likely to strengthen their position thanks to last year’s new collective bargaining agreement and the impact of new television deals with CBS, ESPN, Fox and NBC worth a 62% increase on previous contracts.
Forbes said the Yankees owed its high placing to the success of its 34%-owned regional TV network YES. It generated more than $200 million in operating income last year, while the team itself made $330 million in ticket revenue in 2011. Elsewhere in the top-10, MLB franchise the Los Angeles Dodgers placed sixth with a valuation of $1.4 billion following its record-shattering $2 billion takeover in March. Real Madrid’s great rival FC Barcelona placed eighth with a valuation of $1.31 billion, while Premier League club Arsenal took 10th spot with $1.29 billion. Forbes cited Barcelona’s broadcasting revenue of $266 million as leading the way for football clubs in 2011, adding that Arsenal drew fourth-highest matchday revenues of $150 million.