Value for money of the most prominent European football clubs

Through an analysis of the correlation between their Enterprise Values (EV)[1] as of 1 January 2016 and the price of the cheapest season tickets[2] for the upcoming 2016/17 campaign, the KPMG Football Benchmark team has attempted to analyze the “value for money” perspective of fans attending home matches at the 32 elite European teams.

EVs are taken from KPMG Football Benchmark’s “Football Clubs’ Valuation: The European Elite” report, published in May 2016. These estimations are derived for each of the selected clubs from five parameters:

• Profitability refers to the staff costs-to-revenue ratio of the last two financial years.
• Popularity measures fan engagement through social media followers of the teams.
• Sporting potential is determined by the market value of the squad according to Transfermarkt.
• Broadcasting rights, agreed upon at league level for the next seasons, represent a fundamental element of revenue generation potential of football clubs.
• Finally, since the stadium is one of the most relevant assets of a football club, stadium ownership is also considered in the formula, as any club-owned stadium generally means more opportunity to generate revenues.

As the chart below demonstrates, FC Barcelona, FC Bayern Munich and Real Madrid CF are the clubs with the best value for money in Europe’s football elite. With season tickets starting from EUR 132, FC Barcelona’s offer is unquestionably reasonable.

Similarly, besides being the club with the best Enterprise Value together with Manchester United FC (EUR 2,905 million), Real Madrid CF offer their supporters the cheapest season ticket at a reasonable price. While a Real Madrid fan can buy a season ticket starting at EUR 223, Manchester United FC supporters need to spend at least three times more to watch their team, as they charge EUR 685 for a comparable season ticket.

For some Italian and Portuguese clubs, such as AC Milan, FC Internazionale Milano, SL Benfica and FC Porto, it is reasonable to assume that the relatively low price of season tickets compared to their EV is mostly the result of oversized stadia.

Unlike the clubs mentioned above, it is interesting to note how five out of the seven Premier League clubs selected in our report – Arsenal FC, Liverpool FC, Tottenham Hotspur FC, Chelsea FC, and Everton FC - have relatively expensive season tickets when measured against their Enterprise Values. All these clubs are in the “red zone” above the regression line of our chart. Furthermore, besides Manchester City FC, no Premier League team has season tickets costing below EUR 600.

At EUR 1,663 million, Arsenal FC are 5^th in the KPMG’s EV ranking. They have a lowest price for season tickets (EUR 1,334) which is almost six times higher than Real Madrid CF’s, the most valuable football club in the world alongside Manchester United FC. Moreover, although Arsenal FC have a slightly higher EV than Manchester City FC (EUR 1,620 million), the Gunners’ cheapest season ticket is more than three times more expensive than City’s (EUR 385). Finally, Tottenham Hotspur FC, despite their 12^th position in the EV ranking (EUR 801 million), offer the second highest priced season tickets, charging approximately EUR 1,000.

Here it is worth mentioning the example of Leicester City FC, fresh Premier League champions. The Foxes were playing in the Championship (tier 2) no more than two years ago. Although they were not selected in KPMG’s report, their cheapest season ticket (EUR 509) would stand in the top 10 of the table, higher than the likes of Juventus FC, Paris Saint-Germain FC or Atlético de Madrid, but also higher if compared to other domestic league winners such as PSV Eindhoven and SL Benfica.

In the last couple of years, many Premier League clubs have adopted price-freeze strategies to cap their season tickets. Notwithstanding this, their prices are still by far the most expensive in European football, as all the seven English teams covered in our report are in the top 10 of the most expensive cheapest-available season tickets. However, it must also be added that the average size of English stadia is smaller than German, Italian and Spanish ones.

The comparison between Premier League and the Bundesliga is particularly interesting. Despite being one of the European economic powers, Germany adopts very popular prices for their home matches, unlike England. Indeed, the three Bundesliga clubs in our report (FC Bayern Munich, Borussia Dortmund and FC Schalke 04) are all in the “green area” of our chart, being clubs charging a cheap season ticket compared to their EV. German clubs play only 17 matches at their home grounds rather than the 19 played in La Liga, Premier League, Serie A and Ligue 1, and are in the bottom 10 in terms of most expensive cheapest season tickets.

Approximately one third of the selected clubs appear in the “yellow area” of our chart, meaning that their season tickets seem to represent fair value for money in comparison to their EVs. Juventus FC and Paris Saint-Germain FC, both enjoying plenty of on-pitch success over the past few seasons, exemplify clubs that have aligned season ticket prices in relation to their Enterprise Values. As the following table shows, they are also the highest two non-English clubs in the ranking of season ticket price, in 7^th and 8^th places.

Although this article focuses on the value for money of the most prominent European football clubs, it must be stated that in sports, spectators may emphasize the emotive connection with their favorite clubs more than their financial performance.

Further investigation into these questions, as well as analysis of industry data, can be undertaken for you by KPMG’s Sports practice. Our subject matter experts can also assist stakeholders in assessing and interpreting the potential impact on their organizations of a particular piece of research, identifying the underlying reasons behind specific trends or developing potential solutions and future scenarios.