Leal Madrid have won three victories this year: the Spanish La Liga, the Champions League and the title of the most valued European football club in 2021, awarded by Forbes, and based on a study by Deloitte: 5.1 billion dollars (4.8 billion euros), according to the annual ranking published on Monday May 30 by the American magazine, which had been suspended in 2020 due to the health crisis.
The merengue club is neck and neck with FC Barcelona (5 billion dollars), followed by Manchester United (4.6 billion), Liverpool (4.4 billion) and Bayern Munich (4.3 billion). Paris-Saint-Germain comes in seventh place (3.2 billion), behind Manchester City (4.2 billion). These amounts do not mean much in themselves, except that the increase in valuations reflects increased financialization. And a growing gap between the richest and most modest clubs, including within the elite.
Emmanuel Macron in favor of their development
The clubs are not full-fledged businesses and generate little profit, when they do not lose money, recalls the economist Luc Arrondel (CNRS-Ecole d’économie de Paris), author of football money (Cepremap, 2018). The rent goes first to the players: wages weigh 61% of the turnover of the first twenty British clubs, 54% in Germany, 62% in Spain and 73% in France; with strong inequalities, since 10% of them monopolize more than half. The correlation is obvious, according to Mr. Arrondel, between the importance of the payroll, inflated by the stars, and the success on the lawn.
Until now, some billionaires were not looking to make money, sacrificing instead a passion for football and/or a region, like the Pinaults with Stade Rennes or the Agnellis with Juventus Turin. By investing in Europe, the oil monarchies of the Gulf deploy a “soft power” intended to strengthen their image. The landscape is changing, with the rise of investment funds. Especially in France, where Emmanuel Macron is in favor of their development.
Already present in American football, baseball and basketball, the private equity wants to use all the financial levers to prosper there. Billionaire Todd Boehly (Clearlake Capital) bought Chelsea from Russian oligarch Roman Abramovich for 5 billion euros. After having straightened it out, Elliott Management has just sold AC Milan to Redbird Capital, already owner of the “small” Toulouse FC, for 1.2 billion. CVC has invested 1.5 billion in Ligue 1. The word “foot business” is beginning to make sense, more than a century after being invented by the English league boss.