Having seen its enterprise value (EV) fall by €380m (£325.7m) between 2020 and 2021 as a result of the pandemic, Liverpool have bounced back strongly in the 2022 report into the value of Europe’s major teams.
The annual report, produced by analysts at Football Benchmark, has revealed the EV of clubs from across the continent, with Liverpool’s 14 per cent rise year on year taking them to an EV of €2.55bn (£2.19bn), a figure that places them fifth on the the list behind Bayern Munich, Barcelona, Manchester United and Real Madrid, the Spanish side topping the report for the fourth consecutive season.
For Liverpool their 12 per cent EV rise represents the biggest of the clubs in the top five of the report, although when looking at the top 10 both Manchester City and Chelsea, while having a lower EV have both seen bigger jumps in terms of percentages year on year, thanks in no small part to the presence of both in last season’s Champions League and both clubs finishing higher than Liverpool in the Premier League last year, a campaign where Liverpool had to limp over the line to secure Champions League football after an injury ravaged season.
Enterprise value (EV) is the formula used to calculate the total equity value of a business, its good and bad parts, including the cost of shares and its net debt. It is the sum of the market value of the owners’ equity and net debt, less cash and cash equivalents. Football Benchmark have used EV as a metric as it allows for the comparison to be drawn between clubs with differing debt and equity structures. Things such as profitability, popularity, sporting potential, broadcasting rights and stadium ownership are all part of the methodology.
Looking at the longer term EV trends among European football’s 30 most valuable clubs, it is Liverpool who have seen one of the highest increases in their EV, behind only Paris Saint-Germain. Since 2016 there has been a rise of €1.28bn (£1.1bn), figure that means a 101 per cent rise that has come off the back of sporting achievement on the pitch and the massive growth in revenues that have occurred as a direct result of that. In comparison, three clubs on the list have all seen EV value decline, with Manchester United, who still lie second on the overall list, and Everton having seen one per cent declines. Arsenal’s spell away from the Champions League and lack of success has seen their EV fall by five per cent.
The biggest year on year EV rise of the 30 clubs has come from AC Milan, the club that RedBird Capital Partners, the sports-focused private equity firm that owns 11 per cent of Liverpool owners Fenway Sports Group, are understood to be closing in on a deal to take over the Italian side from current owners Elliott Management. AC Milan, who won the Serie A title at the weekend, have recorded a 35 per cent rise in their EV compared to the 2021 report, with operating revenues increased by 42 per cent year on year.
Andrea Sartori, founder and CEO of Football Benchmark, said: “While our valuations are based on published financial figures, they also incorporate the latest trends and sentiments.
“Indeed, last year’s financial results still bear the negative impacts of COVID-19, while the past several months reflect solid signs of football returning to normal, most notably with crowds back in stadia and with continued robust demand from sponsors and investors. Indeed, investors are looking forward, contemplating the future, rather than dwelling on the past.
“The positive attitude in the market is well illustrated by the recent transaction concerning Atalanta, and the ongoing potential sale of major clubs such as Chelsea or AC Milan, especially the rumoured transaction prices reported.”
West Ham United, Aston Villa and Europa League champions Eintracht Frankfurt were all newcomers to the list, while Schalke 04, Marseille and Fenerbahce all dropped out.