The gap between Europe’s richest clubs and the rest has grown in the past 12 months despite no team avoiding the grave financial impacts of the pandemic, according to a new KPMG report which highlights the financial muscle of the dozen owners behind the failed Super League proposal.
While eight Premier League clubs are in the top 20 of the auditors’ annual Enterprise Value rankings at the end of a season in which games being played behind closed doors and broadcast rebates led to significant decreases in clubs’ perceived worth, a more concerning chasm has opened between 14 clubs across the continent and the rest.
Three London clubs feature in the top 11 of the 32-team table. Chelsea are seventh, Tottenham have fallen to ninth, while Arsenal’s on-field decline is being mirrored by their slump to 11th. West Ham United have dropped out.
But the most notable aspect is the fracture that now exists within the elite clubs. There are 13 clubs with midpoint valuations of more than £1bn and, underlining the yawning gap, the 15th-placed club, Schalke, have a worth of significantly less than half of that at £451m.
“In the past season the top 10 clubs’ operating revenues accounted for almost 60% of the total income of all 32 clubs, while they accounted for only a third of the aggregate net loss,” the report said.
The analysis says the clubs “at the very top” have operating models that are now “noticeably different” to the rest and in the six years since the began to evaluation ranking “the top 10 clubs have performed better than the other 22 clubs combined when considering total operating revenues, staff costs-to-revenue ratio and net result.”
KPMG also found that of the 98 clubs in Europe’s big five leagues the dozen Super League members accounted for 74% of all social media followers – 1.34bn compared to 474m.
All 29 clubs that were part of last year’s analysis recorded a decrease in valuation as the impact of the pandemic struck hard. More than £5bn has been wiped off the collective value of the elite clubs compared to last year but it has still risen 27% since 2016.
“The aggregate Enterprise Value of the 32 most prominent European football clubs has dropped by 15% year on year (-£5.26bn), down to €33.6bn (£29bn), a value slightly higher than the 2018 level,” the report added.
“Broadcasting and matchday income were impacted to the greatest extent by the pandemic, whereas commercial revenues slightly increased, mainly thanks to agreements signed before the start of the health crisis.
“The impact of the pandemic is apparent in clubs’ profitability as well: only seven of the top 32 clubs reported a net profit, while there were 20 profitable clubs in this elite a year before. Despite the latest 15% EV drop mainly caused by Covid-19, the 32 clubs increased their aggregate EV by 27% from 2016 until now.”
Source by Football London