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Manchester United – the world’s most valuable club

Manchester United scored another title success by being valued as the biggest football club in the world. Despite a turbulent year for British clubs, the Old Trafford side held on to top spot in Forbes Magazine’s list of the world’s 20 most valuable football teams. United, who have now topped the table for six years, were valued by Forbes at £1.19 billion after a 2% fall from last year.

Seven of the 20 teams featuring in the table hailed from England – despite the Premier League being the most indebted in Europe according to governing body UEFA. Newcastle United, rated as 20th most valuable were a surprise inclusion after being relegated last year. Arsenal came third, ahead of Liverpool in sixth, Chelsea in ninth and Tottenham at 12th. Big spending Manchester City trailed in 19th place.

One disappointing but perhaps not surprising result was that not one single club originated from either South America or anywhere else apart from Europe.

The five richest teams – Manchester United, Real Madrid, Arsenal, Barcelona and Bayern Munich earned $556 million, an operating margin of 24%. The five poorest teams – Newcastle United, Manchester City, Borussia Dortmund, Marseille and Werder Bremen lost a combined $54 million on revenues of $778 million.

The Forbes business sports writer praised Manchester United’s resilience as  one of the world’s biggest sporting brands. He believes that “The club has really established itself as one of the top brands in world sport. New kit deals and great marketing has seen them maintain their status despite all the problems of the global recession”. Real Madrid were forced to settle for second place despite signing Cristiano Ronaldo from United last summer. The world’s 20 most valuable clubs generated a combined £422million in operating income last season.

Combined revenues grew by £23.4million to £3.57 billion for the 2008-09 season “The top five clubs took in 86% of the total because their worldwide following. Look closer and it becomes clear that the wealthiest clubs have a big advantage over their competitors because they are global brands which allows them to generate more revenue outside their home market from sponsorships, merchandise and broadcasting” Forbes said.

The prime example is Manchester United, the most valuable club in the world worth $1.84 billion. Their MUTV Channel is shown in over 192 million homes. The club claims 333 million followers and 139 million core fans. Beginning next season United will have a new shirt sponsorship with Aon that will bring in $34 million a year over four years, 50% more than its current deal with AIG.

The Nike swoosh will continue to adorn the shirt as well thanks to a 13 year pact with the apparel maker that pays the team $470 million plus a 50% share of profits on specific merchandise through 2015. Manchester United posted operating income of $150 million last year, the most of any team, while their media revenue of $164 million was tops in the English Premiership.

Despite the club’s huge success on the pitch since Malcolm Glazer bought them in 2005, the locals are unhappy with the $839 million of debt Glazer has saddled the club with and are hoping to raise enough money to buy him out.

The teams at the bottom of the list have little reach outside their local markets. Manchester City and Newcastle United posted operating losses of $56 million and $49 million respectively. With a value of $258 million City, despite a succession of foreign owners is in free fall. Two thirds of their stadium revenue goes to the city council which financed the stadium for the 2002 Commonwealth Games.

Amid the recession problems affecting other sports, soccer’s sponsorships and broadcast rights continue to flourish with combined revenue growing by $36 million in the 2008-2009 season. Despite the large amount of debt most clubs accrue, investors are continuing to pick up teams around the globe due in large part to soccer’s growth prospects in emerging markets.

This report goes a long way towards explaining why the Glazer family is so determined to hang on to their ownership of Manchester United and why the Red Knights consortium continues to apply heavy pressure in their bid to take over the club.

At the same time however, it must be of great concern to the likes of FIFA, EUFA and most importantly, to football fans in general, to discover that “The top 5 clubs took in 86% of the total revenue” generated by the game in the 2008-09 season. It means that every other football club in the world apart from those 5, must have had to make do with the remaining 14%.

The 20 most valuable football clubs in 2009 were

  1. Manchester United
  2. Real Madrid
  3. Arsenal
  4. Barcelona
  5. Bayern Munich
  6. Liverpool
  7. AC Milan
  8. Juventus
  9. Chelsea
  10. Inter MilanI
  11. Schalke 04
  12. Tottenham Hotspur
  13. Lyon
  14. Hamburg SV
  15. AS Roma
  16. Werder Bremen
  17. Marseille
  18. Borussia Dortmund
  19. Manchester City
  20. Newcastle United

Does it surprise you that just 5 clubs generate 86% of the worlds football income?

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