Market Insight: Five conclusions from the Soccerex Football Finance 100

Market Insight: Five conclusions from the Soccerex Football Finance 100
At the beginning of this year, Soccerex released its new annual report which uses a bespoke methodology to rank the top 100 clubs across the world based on their finances. SportsPro’s writers picked out five of the report’s most eye-catching results, and did their best to identify the patterns and trends that helped shape the first ever Football Finance 100.

The Soccerex Football Finance 100, which factors in a club’s playing assets, fixed assets, money in the bank, potential owner investment and net debt, is dominated by UK teams, with Premier League champions elect Manchester City leading the way. 

1. UK remains a financial haven despite struggles in Europe

Much has been made of Premier League clubs and their inability to leave their mark on the Uefa Champions League in recent years, but the Soccerex Financial 100 suggests that poor showings in Europe are doing little to diminish English coffers.

England’s top-flight sides are never shy of splashing the cash in the transfer market, and the league remains a financial haven for potential owners, sponsors and players alike. It comes as no surprise then, to see its teams occupying more than a quarter of the top 30 places on this list, and beyond that, a total of 19 UK representatives featuring in the annual report.

Manchester City – fuelled by their billionaire owner Sheikh Mansour - claim top spot, but perhaps more intriguing are the two North London clubs that trail them. Despite finishing outside the Champions League places for the first time during Arsene Wenger’s reign, Arsenal are second in the list, reflecting their comparatively measured approach in the transfer market, along with the added boost that their move to the Emirates Stadium has provided.

For their part, Tottenham Hotspur also have a new home to look forward to, with their 61,000-seater stadium expected to be ready for next season. That, coupled with a young and exuberant star-studded playing squad, sees them placed higher in the list than Premier League rivals Chelsea and Manchester United, as well as Spanish giants Barcelona and Real Madrid.   

The power of the Premier League shows no sign of wilting and, with a new mega domestic rights deal set to be sealed in the coming months, it would be foolish to bet against English teams continuing to dominate this list for years to come.

2. China is coming, whether you like it or not

Soccerex found that nine Chinese clubs possess greater financial power than teams in countries such as Italy, France and Germany, and calculates the net worth of the owners of these teams to amount to a whopping €75.1 billion.

Of these sides, Chinse Super League (CSL) champions Guangzhou Evergrande ranked as high as fourth, among English soccer giants Manchester City and Arsenal, and France’s Paris Saint-Germain.

Evergrande, who are the CSL’s most successful club, winning the league for seven successive seasons, are backed by the Evergrande Real Estate group and ecommerce mammoth, the Alibaba Group.

China’s heavy presence in this list is unsurprising, given that the country’s investment in soccer has been backed by the Chinese government as a cultural and political soft power tool.

This increasing financial heft is driven by wealthy Chinese individuals and corporations, many of whom are flush from the booming Chinese real estate market. Ten of the 16 CSL outfits are owned by real estate companies or businesses linked to the industry.

The CSL is able to spend lavishly on players; in 2016, it spent more money on players than any other league in the world, attracting talent with high salaries. Government regulation in the summer of 2017 has slowed this to prevent development distorting that of the national team, but China’s clubs remain financially powerful and inclined to compete for cheaper foreign imports as they seek value for money.

With government backing, and no sign of a check on China’s economic boom, Chinese clubs remain an alluring prospect for investors.

3. Four Spanish clubs in the top 30, although only one makes it into the top ten

Spain has long boasted the world’s top players who, in a long-established rite of passage, take a turn at playing for soccer’s elite stalwarts, Barcelona and Real Madrid. Topping the Deloitte Money League of the world’s highest-earning clubs for 11 consecutive years, La Liga is finding itself witness to a shakeup of the global soccer order with new arrivals coming on the scene in the shape of the US and China, as well as with investments made in clubs like Chelsea, Manchester City and Paris Saint-Germain, forming a group of new contenders challenging the status quo.

Spanish clubs continue, on the whole, to boast financial heft, with four La Liga sides making it into Soccerex’s top 30. In sixth place, Real Madrid are the only Spanish team to make it into the top ten, and are also the first in the rankings not owned by a tycoon. Owned by its club members, Real have invested heavily in players since the early 2000’s, meaning its squad contributes most to its financial standing, which is valued at a mighty €771 million.

Madrid’s financial strength is also consolidated around high value assets, including their stadium, training ground, and cash in hand.  Soccerex concludes that if Real was capitalised via the stock exchange, it would be worth more than any magnate-owned club.

Barcelona, who appear at 16, are, like Real, a supporter-owned non-profit trust which brings them down in Soccerex’s rankings, but the dearth of direct investment is balanced out by strong assets. Atletico Madrid, meanwhile, have seen success on the field in recent years which has boosted their financial firepower. Investment in the form of a new stadium, and the backing from minority shareholders, the club also enjoys contributions from Chinese conglomerate the Wanda Group.

Valencia edge into the top 30 at 29, after seeing a change in fortunes in 2017, finishing the year ahead of Real Madrid. The side remain financially powerful with the backing of Singaporean businessman Peter Lim.

While Spanish powerhouses are affected by their membership owner structures and lack of potential owner investment, their financial potential would be huge were it capitalised via the stock markets.

4. Paris Saint-Germain proved their potential breaking the world transfer record

Paris Saint-Germain have never been one to hide their intentions since Qatar’s Nasser Al-Khelaifi, the chief executive of the increasingly influential BeIN Media Group, started pumping his billions into the club.

Indeed, the Ligue 1 champions are unlikely to rest until they’ve eclipsed a number of their European counterparts to become global soccer’s leading powerhouse, but the summer of 2017 suggested that that particular coronation is not too far away.

This list – based on data collected from the 2015/16 season – might not yet have factored in the record-breaking addition of Brazilian poster boy Neymar, but gives a better indication than any as to why PSG were able to make a €222 million move for the forward, before committing to a future €180 million transfer fee for French youngster Kylian Mbappe upon signing the 18-year-old from Ligue 1 rivals AS Monaco on an initial season-long loan.

PSG’s position in third in this list demonstrates that they are already dining at soccer’s top table, but their ambitious and affluent owners are unlikely to be satisfied until they’re sitting at the head of it. 

With Uefa Champions League dominance firmly on the agenda, and two of soccer’s most valuable playing assets now on their books, PSG’s ascent is picking up pace, and it would be no surprise to see them dislodge Manchester City at the top of this list when it is released in 2019.

5. US is joint-second most represented country in the top 30 ahead of Germany and Spain

According to Soccerex, the US finds itself the joint-second most represented country in the top 30 most financially powerful clubs in the world, ahead of longstanding soccer powerhouses Germany and Spain.

While UK clubs dominate the upper part of the Soccer Football Finance rankings, providing four of the top ten and eight of the top 30, the US contributes five, ahead of Germany and Spain, who have four each.

US clubs making it into the elite 30 include LA Galaxy, the Seattle Seahawks, the New York Red Bulls, New York City, and the New England Revolution.

LA Galaxy, who appear at 14th as the highest ranking US team, were founded in 1996, and are one of Major League Soccer’s (MLS) most decorated clubs, holding five MLS Cups amongst its other accolades, while they also won the Concacaf Champions’ Cup in 2000.

The franchise are owned by Anschutz Entertainment Group (AEG), and their founder Philip Anschutz was the biggest investor and advocate for MLS to develop. The club was the first to make a profit in the league in 2003, and also has the highest revenue. The move to their new stadium at the StubHub Center has allowed the side to increase its average audience and double its revenues with sponsors and other streams on match days.

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Soccerex Football Finance 100 is an exclusive annual report that compiles a ranking of the world’s most financially powerful clubs.

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