Best ranking of Real Madrid, the Utd man falls to 3rd place. The pandemic lowers the total valuation by 6 billion euros and more
By Paul Nicholson
May 27 – The pandemic has caused the value of Europe’s 32 biggest clubs to lose 6.1 billion euros, according to the latest annual football club valuation report from KPMG Football’s benchmark team.
This is the first time in the six years of the report that the aggregate values of the top 32 clubs have declined from € 33.6 billion to € 27.5 billion, a drop of 15%.
At the top of the valuation rankings (KPMG uses their own algorithms to create what they call ‘enterprise value’) are Real Madrid, which led for the third year in a row. They are followed by Barcelona who beat Manchester United to take second position. Five of the top 10 clubs are from the English Premier League which has eight teams in the top 20.
Paris Saint-Germain move to 8eposition, overtaking Tottenham Hotspur, while Juventus returned to the top 10, replacing Arsenal, who have lost six positions since the 2016 first edition of our ranking.
Atalanta, Marseille and Fenerbahçe are new in the top 32, while West Ham United, Athletic Club Bilbao and Beşiktaş have dropped out.
Perhaps most concerning for the financial health of big clubs is that only seven of the top 32 clubs reported net profit, up from 20 profitable clubs a year earlier, KPMG reports.
KPMG also highlights the growing divergence in values between the top 10 clubs compared to the other 22 clubs assessed and stressing that “last season the operating revenues of the top 10 clubs represented almost 60% of the total income of the 32 clubs. . clubs, when they only accounted for a third of the total net loss. They might not be getting fat, but they’re still a dominant size, and that doesn’t change.
“In each of the six years examined, the top 10 clubs outperformed the other 22 clubs combined when considering total operating revenue, staff cost-to-revenue ratio and bottom line,” the report says. .
In the report, KPMG examines the large-scale impacts of the virus, estimating that top division clubs from UEFA’s 55 member associations combined will experience an 11% annual drop in their overall operating income (-2.5- 2.7 billion euros) in the 2019/20 Season, at the levels recorded in the 2016/17 season.
KPMG also says player values will be affected by the total market value of the 500 most valuable soccer players which declined by 10% between February 2020 and April 2021.
“Eighty clubs, including all the European football giants, which have made public their financial results so far, have recorded a total net loss of 2.04 billion euros: this means that this sample of around 10 % of UEFA’s roughly 700 top division clubs have already racked up more losses in the 2019/20 season than the previous negative overall record of 1.7 billion euros in losses recorded in 2010/11, before the ‘introduction of UEFA’s financial fair play,’ says KPMG.
This is a fundamentally grim prognosis for European club football.
Not all the blame can be laid on the doorstep of the Covid pandemic, with KPMG arguing that the global health crisis has only accentuated the underlying problems already present in football clubs’ business models.
In this regard, they argue that reform is needed, including the assessment of what would be a fairly radical operation on European League football, including downsizing of leagues, streamlining of match schedules , the creation of regional leagues by merging smaller national leagues. and last but not least, the overhaul of FFP with a focus on tighter cost control mechanisms, ”said Andrea Sartori, KPMG’s global sports manager and author of the report.
“For years, industry stakeholders have focused on their individual positions to protect the interests of their own organizations, without looking at the collateral effects of their expectations and ambitions on the industry as a whole. All parties must understand and accept that football has undergone a vital transformation in recent years, mainly caused by changing consumer habits and digitization, which in turn has led to the globalization of the industry, benefiting mainly to big clubs and leagues, ”Sartori said.
“To improve the state of European football, unprecedented flexibility, wisdom, responsibility and cooperation from all parties at all levels are needed. There is no other way to save the “beautiful game” and make it sustainable for the benefit of all parties involved, especially for players and supporters around the world, the most important participants in football.
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