Soccerex Football Finance 100

[Pogue Mahone]

The Soccerex Football Finance 100, which ranks the world's top teams based on both their playing and fixed assets, money in the bank, owner potential investment and debt, was published on Wednesday.

Top 20:
1. Manchester City
2. Arsenal
3. PSG
4. Guangzhou Evergrande
5. Tottenham
6. Real Madrid
7. Manchester United
8. Juventus
9. Chelsea
10. Bayern Munich
11. Zenit St Petersburg
12. RB Leipzig
13. Barcelona
14. LA Galaxy
15. Atletico Madrid
16. Liverpool
17. Borussia Dortmund
18. Lyon
19. Monaco
20. Leicester

I can't find the full report anywhere. Despite having a look at the Soccerex website. Still, though, assuming these guys know their onions that top 20 isn't great reading for United fans. The Guangzhou Evergrande ultras must be well chuffed though.

 

[roonster09]

Not sure how serious this list is considering Arsenal are about to lose two of their best players (Assets) or Spurs being ahead of ManUtd and Madrid.

 

[Thunderhead]

The Guangzhou Evergrande ultras must be well chuffed though.

I know I'm not great on players outside the top teams of the big 3 leagues but I've only heard of Alan out of their squad, how can they be worth so much.

Seems like a big pile of bollox to me, especially with United, Real and Barca being so low down and with City top and Arsenal 2nd.

 

[Pexbo]

I mean there’s clickbate “top x lists” where you put Lee Dixon in your all time EPL team and then there’s forfeiting all your credibility like they have here.

 

[Dan]

Wow, Spurs are a huge club.

 

[United_We_Stand]

@Pogue Mahone The full report is available here http://mysoccerex.com/Soccerex_Football_Finance_100_2018.pdf

The benchmarks used in the report are:

A) Playing Assets
B) Fixed Assets (i.e. team’s stadiums, training centres and other properties)
C) Cash in the bank
D) Owner Potential Investment*
E) Net Debt

So basically your final score would be a reflection of how wealthy your owners are. The wealthier the owners, the more cash in the bank, the higher potential investment, the lower net debt.

What struck me the most was that City, Arsenal and Spurs have more fixed assets than us! We have estimated fixed assets of €347 vs. €534m, €766m and €386m for City, Arsenal and Spurs respectively.

While I understand why Emirates and (the new) White Heart Lane may add more to the fixed assets of Arsenal and Spurs as they are based in London. Why would City's fixed assets exceed ours? Is Etihad much more valuable than OT?

 

[jojojo]

The report's available for download on: https://www.soccerex.com/insight/articles/2017/manchester-city-pack-most-financial-punch-on-planet

Seems like a big pile of bollox to me, especially with United, Real and Barca being so low down and with City top and Arsenal 2nd.

Madrid and Barcelona are attempting to raise funds to redevelop their stadiums but have no easy way to do it. Being member-owned brings the disadvantage that they can't offer equity stakes to anyone and the banks won't allow them to include players or TV contracts in their assets list when it comes to loan collateral. It's not that they lack income, they lack flexibility.

Arsenal and City have relatively new stadiums and no significant debt. The fiddle factor is throwing in a kind of "investment potential" sum into it. Which might well be accurate for PSG and City, but seems a bit unlikely for Arsenal.

United's issues are debt, stadium development and potential for getting new external funds. Which, while you might disagree with the numerical valuation, isn't an unreasonable set of questions.

 

[jojojo]

Why would City's fixed assets exceed ours? Is Etihad much more valuable than OT?

I would imagine it's got the new development, the mini-stadium and training facilities etc in there.

 

[mad1max954]

@Pogue Mahone The full report is available here http://mysoccerex.com/Soccerex_Football_Finance_100_2018.pdf

The benchmarks used in the report are:

A) Playing Assets
B) Fixed Assets (i.e. team’s stadiums, training centres and other properties)
C) Cash in the bank
D) Owner Potential Investment*
E) Net Debt

So basically your final score would be a reflection of how wealthy your owners are. The wealthier the owners, the more cash in the bank, the higher potential investment, the lower net debt.

What struck me the most was that City, Arsenal and Spurs have more fixed assets than us! We have estimated fixed assets of €347 vs. €534m, €766m and €386m for City, Arsenal and Spurs respectively.

While I understand why Emirates and (the new) White Heart Lane may add more to the fixed assets of Arsenal and Spurs as they are based in London. Why would City's fixed assets exceed ours? Is Etihad much more valuable than OT?

I think the Manchester City group owns New York and Melbourne FC - I am guessing that accounts for the difference in fixed asset ownership. I'm completely guessing here, but Id assume the turnover thats driven from the group as a whole will help them in FFP as it would massively inflate their turnover/profits. Given that they cant sell out their stadium and they have the lowest season ticket prices in the league, yet their turnover puts them firmly in the top 10. That and the fact that they have sponsorship deals that are obviously state backed.. all utter bullsh1t imo.

 

[midnightmare]

@Pogue Mahone The full report is available here http://mysoccerex.com/Soccerex_Football_Finance_100_2018.pdf

The benchmarks used in the report are:

A) Playing Assets
B) Fixed Assets (i.e. team’s stadiums, training centres and other properties)
C) Cash in the bank
D) Owner Potential Investment*
E) Net Debt

So basically your final score would be a reflection of how wealthy your owners are. The wealthier the owners, the more cash in the bank, the higher potential investment, the lower net debt.

What struck me the most was that City, Arsenal and Spurs have more fixed assets than us! We have estimated fixed assets of €347 vs. €534m, €766m and €386m for City, Arsenal and Spurs respectively.

While I understand why Emirates and (the new) White Heart Lane may add more to the fixed assets of Arsenal and Spurs as they are based in London. Why would City's fixed assets exceed ours? Is Etihad much more valuable than OT?

Could be driven by age and depreciation. OT is way older and therefore a lot more depreciated - also meaning that it's going to be due for renovations (and expansion, from what I've read) far earlier than the Etihad or the Emirates and (new) WHL. This causes a skew to asset value. Am assuming this is the basis as it makes most sense to me.

 

[Balu]

Where did they get all the numbers from? Who estimated Arsenal's players value higher than United's and significantly higher than PSG's for example? Even ignoring the "owner potential investment" thing, it's truely mind-boggling.

 

[dove]

Some interesting stats, it shows we have 536 million € debt? Isn't it more like £200m according to our official docs?

 

[Sir A1ex]

Could be driven by age and depreciation. OT is way older and therefore a lot more depreciated - also meaning that it's going to be due for renovations (and expansion, from what I've read) far earlier than the Etihad or the Emirates and (new) WHL. This causes a skew to asset value. Am assuming this is the basis as it makes most sense to me.

Conversely, though, I'd have thought the fact they don't own it would massively reduce its value as a fixed asset? It's still leased from the council, no? Whereas I assume we have the freehold for OT.

 

[Balu]

Some interesting stats, it shows we have 536 million € debt? Isn't it more like £200m according to our official docs?

None of the numbers seem to be correct. The latest official numbers have Bayern's cash in bank at 220m € . They couldn't even get the numbers right when the correct numbers were easy to google. The ones where they had to use an estimated value look even more ridiculous.

 

[BBRBB]

This different approach to club financial rankings is interesting but unfortunately a lot of the numbers seem quite off or even completely wrong.

 

[KentSpurs]

The player values seem to be way off for a lot of clubs on there.

 

[midnightmare]

Conversely, though, I'd have thought the fact they don't own it would massively reduce its value as a fixed asset? It's still leased from the council, no? Whereas I assume we have the freehold for OT.

It's a 250-year lease, so the valuation would be similar to them owning the stadium. Added to this, I'm guessing they get a cut of the "other events" that the stadium hosts, which would boost value depending on how the value is being calculated in the first place. It's fairly murky, but being the owner of premises which are on a 100-year lease, I can tell you that my balance sheet shows the premise as an asset with a valuation (2 years into the lease) at "market value of the property" without deductions for the lease provision. That's why I ignored the lease aspect when speculating on how they're valued as having a larger asset than us - since the stadium is newer in all aspects than OT.

 

[Sir A1ex]

It's a 250-year lease, so the valuation would be similar to them owning the stadium. Added to this, I'm guessing they get a cut of the "other events" that the stadium hosts, which would boost value depending on how the value is being calculated in the first place. It's fairly murky, but being the owner of premises which are on a 100-year lease, I can tell you that my balance sheet shows the premise as an asset with a valuation (2 years into the lease) at "market value of the property" without deductions for the lease provision. That's why I ignored the lease aspect when speculating on how they're valued as having a larger asset than us - since the stadium is newer in all aspects than OT.

Makes sense.

Although in the case of a football club, it's questionable whether the stadium actually has value anywhere near what is claimed anyway. Sure, you can value what it has cost to build / would cost to replace the stadium in its current condition, but you can't just sell it like a house or generic commercial property. Who exactly would be our potential market for selling Old Trafford to? There is none, football clubs don't buy each other's stadia, so really the only value is in the land it sits on, which could host a supermarket or flats instead. The construction costs should really just be amortised immediately, I'd have thought, to reflect true value.

 

[midnightmare]

Makes sense.

Although in the case of a football club, it's questionable whether the stadium actually has value anywhere near what is claimed anyway. Sure, you can value what it has cost to build / would cost to replace the stadium in its current condition, but you can't just sell it like a house or generic commercial property. Who exactly would be our potential market for selling Old Trafford to? There is none, football clubs don't buy each other's stadia, so really the only value is in the land it sits on, which could host a supermarket or flats instead. The construction costs should really just be amortised immediately, I'd have thought, to reflect true value.

Am unsure about how the lease laws would work in the specific area, but typically (at least in my case), the lease for such durations works as below:

1. The Council that "owns" the land / asset, gives it to the lessor as per a contract.
2. The value is set as the current price at which you'd buy or sell the asset, but instead of freehold ownership, you just have a lease for the period.
3. You could actually pay everything at one go (like an outright purchase) or in installments spread over any period of time - the lease period remains the same.
4. The lease is not like a rental - so it's not like they'd pay annually for 250 years

Now, in several cases, the lease owner can actually sell the lease; this varies based on lease terms and invariably, the "owner" (Council in this case) will need to agree to this. The sale however would be at the prevailing rate of the time of sale and not at the rate of the original lease; depending on the area and laws, the duration of the new lease could be the balance time or even a fully new lease.

In this way, the leased asset is pretty much like an owned one from a valuation standpoint - again, depending on who the owner is. The construction costs are not amortized, but depreciated (physical) and this would be as per existing laws - the GAAP defines how to treat this.

Cheers!

 

[Inter Yer Nan]

Liverpool will win this next year.

 

[el magico]

It's a 250-year lease, so the valuation would be similar to them owning the stadium. Added to this, I'm guessing they get a cut of the "other events" that the stadium hosts, which would boost value depending on how the value is being calculated in the first place. It's fairly murky, but being the owner of premises which are on a 100-year lease, I can tell you that my balance sheet shows the premise as an asset with a valuation (2 years into the lease) at "market value of the property" without deductions for the lease provision. That's why I ignored the lease aspect when speculating on how they're valued as having a larger asset than us - since the stadium is newer in all aspects than OT.

I'm no expert on property law but I'm pretty sure City pay the council around £3m pa, City take all the match-day income plus any profit from additional events.

 

[Blackwidow]

I actually ask myself how they value the assets. Bayern has 225 fixed assets...

The Allianz Arena cost 340m EUR, the new Campus was 70m EUR. And that does not include the buildings at the training complex...