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Research Report - Soccerex Football Finance 100, 2020 Edition (Synopsis)

The Soccerex Football Finance (FF100) provides a unique analytical model to evaluate the financial strength of football clubs around the world, using a bespoke methodology, in line with the modern reality of the market. The analysis is based on balance sheets and annual reports published by the clubs, as well as other reputable sources of information such as UEFA, The Financial Times, Bloomberg, Forbes, Yahoo Finance, Transfermarkt and Hoovers. For this edition, the financial year analysed was 2017-2018.

Europe’s current top bracket clubs which include PSG, Manchester City, Bayern Munich, Real Madrid, Liverpool and Juventus are all in the top 10. The gap between these clubs and their domestic rivals appears to be growing as evidenced in the FF100 rankings.

 

Methodology


The methodology is constructed on five variables that go towards making up the final calculation of each team:


Playing Assets (A)

Tangible Assets (B)

Cash in the Bank (C)

Owner Potential Investment (D)

Net Debt (E)


Football Finance Index (FFI) score looks at the performance of the clubs in these variables, weighted against that variable’s percentage of the accumulative total.


Soccerex FFI Score for a club = A FFI Score +B FFI Score +C FFI Score +D FFI Score –E FFI Score

 

Top 30


The Soccerex Football Finance demonstrates the financial power of the top football clubs around the world. The top 30 features clubs from Europe, North America, China and Japan who enter the Top 30 for the first time. In the first two Soccerex 100FF reports, Manchester City came on top, but they have been overtaken by Paris Saint-Germain, whose sovereign ownership wealth totals some €286 billion and their cash reserves have grown by 50%.

 

Rank 1: Paris Saint-Germain FC


FFI Score: 5.318


PSG won their sixth Ligue 1 title in seven years in 2019, the first time under coach Thomas Tuchel. Qatar Sports Investments is the primary owner with the club’s ownership being the wealthiest in global football at €286 billion. The club has a squad value of more than €1 billion and also has reduced its debt level making PSG attain the top ranking.

 

Rank 2: Manchester City FC


FFI Score: 5.197


Manchester City has the most valuable playing squad in the world valued at almost €1.3 billion. City’s Fixed Assets, including their impressive Etihad Campus, are valued at almost half a billion euros.

 

Rank 3: FC Bayern Munich


FFI Score: 3.888


Bundesliga champions for a record 7th consecutive season in 2018-19, Bayern Munich continue to dominate German Football. Member-owned to a large degree, with minority stakes also held by major German corporates Adidas, Alliance and Audi, Bayern’s strength is found in its playing squad (~€900 million), healthy cash reserves (€221 million) and tangible assets (€258 million).

 

Rank 15: Guangzhou Evergrande Taobao FC


FFI Score: 1.853


Guangzhou won their 8th Chinese Super League title in 2019 but have had to endure a programme of cost-cutting in order to bring down their financial deficits to comply with local regulations. The club continues to benefit from the ownership of the Evergrande group and Alibaba, with the combined ownership value in excess of €175 billion, behind only PSG. By contrast, Guangzhou Evergrande has a very low squad valuation (€76 million) and tangible assets of €112 million.

 

Rank 30: FC Shakhtar Donetsk


FFI Score: 1.048


Shakhtar retains a place in the FF100 Top 30, boosted by the wealth of their owner, Rinat Akhmetov giving them an ownership value of €4.8 billion. The club also has tangible assets of €170 million and benefits from regular UEFA Champions League participation, which gives it a significant advantage over domestic rivals.

 

Conclusion


Recent progress in China has led the market to open up and provide avenues for western clubs to build their global franchises. China and the US are prime examples where the domestic leagues are being run very professionally and are well organized and managed.


Imbalances are still significant in the football market and attempting to globalize club competitions is still a challenging task. There is little doubt that historically successful clubs have an advantage in terms of economic potential and those that cannot keep pace with the new elite, in terms of both investment and commercial development are at risk of being cast adrift. A lot has changed in terms of better broadcasting revenues, the arrival of the first 100 million transfer deals in the last decade. It is an uncertain football world that begins the third decade of the 21st century and constant evolution has always been a part of it.

 

This synopsis has been put together by Amey Sankhe.

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