Last season was one to forget for Manchester United. The Red Devils posted their lowest totals for wins (16) and points (58) since the Premier League launched in 1992, and the 57 goals conceded were also its worst ever.
It has been a decade since United finished atop the Premier League standings, but it remains the clear No. 1 in the financial table. United is worth $5.95 billion (£4.8 billion), according to Sportico’s calculations, 26% ahead of second-ranked Liverpool ($4.71 billion). Manchester City ($4.43 billion), Arsenal ($3.6 billion) and Chelsea ($3.47 billion) round out the top five on our visualization.
Three EPL teams were sold over the last 12 months, while two more had significant minority stake investments. Potential buyers are now kicking the tires on United and Liverpool, with both ownership groups exploring sales of their clubs. The lure is evident.
“With an EPL club, you own a team in the best and most watched football (soccer) league in the world’s favorite sport,” said Inner Circle Sports co-founder Steve Horowitz, who has been the investment banker in numerous soccer transactions in Europe, including Liverpool, Inter Milan, Crystal Palace and National League club Wrexham. “It is the attraction for American investors and those from every corner of the globe.”
Sportico spoke to more than two dozen people involved in the business of the Premier League over the past month, including 10 bankers and attorneys involved in team transactions. The average club is worth $1.51 billion, up 17% from our inaugural EPL team valuations two years ago, but it remains extremely top-heavy. The 20 teams are collectively worth $30 billion, including team-related businesses and real estate held by owners.
The valuation estimates are built around multiples of revenue based on recent comparable transactions and take into account a team’s market, brand, on-field performance and venue. They are meant to be enterprise values—equity, plus net debt—for a control sale, as limited partnership transactions can often be done at a premium or discount based on the circumstances. (Full methodology is here.)
United on the Block
“We had 250 people call us the first [three] weeks after the announcement of the sale [of Chelsea],” Colin Neville, a partner at Raine Group, said at Sportico’s Invest in Sports event in October. “The people that called, including strategics, including corporates, including countries that were interested in buying Chelsea but didn’t ultimately move on the deal because of the Russian situation, would shock people. I think the next big asset that comes up, you will see all those people come and buy sports teams and they are not people we are used to that would want to own sports teams.”
A month later, Manchester United was officially in play.
Last year, Raine oversaw the sale of Chelsea for $3.16 billion, with an additional $2.2 billion commitment to infrastructure—namely a new or renovated stadium—over the next decade. United followed Chelsea’s lead and hired Raine. “The Board will consider all strategic alternatives, including new investment into the club, a sale or other transactions,” the club stated in a brief press release. Neville would not comment on the United sale process.
For the 2022-23 season, United projects total revenue of £590 million to £610 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of £110 million to £140 million, while it sits out Champions League play after a sixth-place finish last season. It will likely post a net loss after taxes and other expenses for the fifth time in six years. United is currently fourth in the EPL standings.
The Big Six EPL clubs generate revenue on par with top NBA/NFL teams at between $500 million and $800 million, thanks to their massive global reach. And as they do in those leagues, EBITDA can reach nine figures, depending on how aggressively clubs spend on players. But Premier League teams typically have slim profit margins or losses because there's no salary cap and they want to keep pace with clubs in continental Europe on player acquisitions.
It is impossible to lose money owning an NFL team.
The average NBA franchise is valued at nine times revenue, and the Phoenix Suns just sold for a Ballmer-like 13 times revenue. NFL teams are a tick below eight times revenue on average; the Denver Broncos sold in 2022 for nine times, and the $4.65 billion deal was the most expensive ever for a sports franchise. Sportico values the Big Six clubs at less than seven times revenue on average because of the weaker profitability profile and minute chance of relegation at some point. Premier League valuations overall also suffer to a degree from the lack of cooperation among the 20 member clubs. The NFL and NBA ownership groups work as partners to help build their respective leagues globally. It is not the case in the UK.
Sportico values United at eight times its £600 million average revenue for the last three non-COVID-19 impacted seasons. It’s a premium to its fellow Big Six clubs; one investment banker labeled it a “unicorn” franchise. Current exchange rates of £1 = $1.24 put United at $5.95 billion, still well behind the top teams in the NFL (Dallas Cowboys, $7.64 billion) and NBA (Golden State Warriors, $7.56 billion). United would be the only EPL club to rank among the 10 most valuable sports franchises in North America where the cutoff is $5.1 billion.
Jim Ratcliffe—founder and majority owner of chemical giant INEOS Group, and the UK’s richest person with a net worth of $15.5 billion, according to Forbes—has publicly expressed his interest in the team. “We have formally put ourselves into the process,” said an INEOS spokesperson last week. Ratcliffe already owns Lausanne-Sport in Switzerland and French Ligue 1 club Nice, but he will face competition for United as the sale process unfolds over the next few months.
Malcolm Glazer, who died in 2014, bought United via a leveraged buyout in 2005 for £790 million pounds ($1.5 billion at the time). He later listed the club on the New York Stock Exchange, but the Glazer family retains control of the team through a class of supervoting shares.
The current enterprise value is $4.7 billion, and the stock is up 86% since early November and 56% since the team announced a potential sale. Chicago-based Ariel Investments was the largest institutional shareholder at the end of September, but it sold 3 million shares, or 26% of its stake, during the fourth quarter—it still holds 8.5 million shares. Some viewed those sales as throwing cold water on Glazer family hopes of a £6 billion United sale, while others perceived it as profit-taking after the stock runup. Ariel did not comment on the sale.
Walled Garden
While the Big Six are valued at levels near NFL and NBA clubs, revenue multiples and valuations drop precipitously for the remaining EPL clubs. “The top six clubs are essentially in a walled garden,” Horowitz said. “Their revenue, and thus player spending, produce an advantage that makes it highly unlikely they get relegated in any season. Of course, the big clubs need to continue to win and fight off sovereign funded competitors.”
Because the bottom three teams in the EPL are relegated to the EFL Championship each year, that means the non-Big Six clubs are valued at between one and two-and-a-half times revenue. West Ham United is worth $665 million and ranks seventh overall, while Tottenham Hotspur, which ranks sixth, is worth nearly five times as much at $3.19 billion. Parachute payments cushion the blow a bit, but once you move down, there are no guarantees of moving right back up.
In the top-heavy EPL, Manchester United is worth more than the bottom 14 EPL clubs combined ($4.9 billion), while each of the Big Six teams are worth more than the combined value of the bottom 11 ($3.1 billion).
The finances to hold on in the EPL or get back up after relegation can be crushing. For example, Fulham has yo-yoed back and forth between divisions over the past six seasons. The club has been propped up by its owner Shahid Khan, who bought the Whites in 2013 and also owns the Jacksonville Jaguars. Fulham’s latest financials display a total net loss of £143 million during the two COVID-19-impacted seasons. Called up share capital is £529 million, meaning shareholders, i.e. Khan, have pumped more than $600 million into the club.
EPL clubs generated $7.2 billion in revenue for the 2021-22 season, based on the average exchange rate during the period of £1 = $1.33. Man City was first at $815 million, followed by Liverpool ($790 million) and Man United ($776 million).
Broadcast revenue is the largest revenue component for each club outside the Big Six, as well as overall at $3.95 billion total—this also includes prize money from competitions outside the UK. The EPL is a hot property outside the UK, and international rights will top domestic rights for the first time during the current three-year cycle between 2022-2025, reinforcing the Premier League's status as a global brand. UK broadcast partners will pay $5 billion, while international rights are $5.05 billion. NBC locked up rights in the U.S. for six years for a total of $2.7 billion, a 150% annual increase versus its prior deal.
Commercial revenue was $2.25 billion for the season, while matchday revenue bounced back with COVID-19 fan restrictions removed. Matchday was $1 billion, up from $45 million for 2020-21 when almost all games were played without fans.
Bargain Shopping
At the end of 2022, Bill Foley, with a group that includes actor Michael B. Jordan, bought Bournemouth for roughly £100 million, which rises to £120 million if the team can stay in the EPL after this season; the team ranks 20th in Sportico’s valuations at $145 million.
“I thought Bournemouth was a bargain,” Bill Foley told the BBC after he bought the club. “I’m buying a Premier League team that already has a stadium, already has players and I can improve it. I don’t see us being involved in the MLS. I’m just not that interested.”
MLS has been looking to add an expansion team in Las Vegas where Foley owns the NHL’s Golden Knights. Foley ran the numbers on the franchise fee and stadium cost and figured he would be out $1 billion before a Vegas expansion club even started play.
The average MLS club is worth $582 million, more than all but eight EPL teams. It is a stark disconnect considering the EPL is universally regarded as the world’s top soccer league, while the MLS sits outside the top 10. The revenues are not in the same stratosphere. Norwich City was last in the Premier League last season but received a $134 million check from the EPL from its distribution of broadcast rights, which was 30% higher than the total revenue for Atlanta United, MLS’ top revenue generator. In comparison, Man City got a league-high $204 million payout. Almost all MLS clubs are losing money, but the “closed” system without relegation provides a level of certainty. MLS investors are also banking on growth of the league, as the World Cup comes to North America in 2026.
Foley and Todd Boehly's consortium at Chelsea increases the number of EPL teams with American majority ownership to eight, while three others have Americans with minority stakes. They view the league as an undervalued asset with significant upside from its global appeal, but the key will be containing costs to build a sustainable model.