Paris Saint-Germain (PSG) is the club with the greatest financial power in world football according to the Soccerex Football Finance 100, the annual report from football business experts Soccerex, which uses bespoke methodology to evaluate and rank the world’s top 100 clubs according to their finances.
The 2020 edition sees the Parisian club overtake Manchester City for the first time in the report’s three-year history with a Football Finance Index (FFI) score of 5.318, which factors in five key financial variables – playing assets, tangible assets, cash in the bank, potential owner investment and net debt. Manchester City, who have topped all previous rankings, were second with an FFI score of 5.197.
The position of both clubs at the top of the report stems largely from the vast financial resources of their respective Middle Eastern owners, which in both cases has allowed them to amass immensely valuable playing squads – both total over €1bn in combined value – and has transformed the clubs’ fortunes, turning them into leading players amongst the global elite.
PSG have leapfrogged Manchester City due to an improved level of financial management that has allowed them to increase their cash reserves and reduce debt levels, through a combination of player sales and support from their Qatari owners, who extended the share capital of the club to €316m. The annual increase in PSG’s cash reserves was five times the increase in Manchester City’s, but the biggest change was in terms of debt, where PSG managed a €70m reduction while Man City’s debt levels increased by more than €90m.
Bayern Munich are third with an FFI score of 3.888 in a top 10 which is dominated by Premier League teams with Tottenham 4th (3.441), Arsenal 6th (3.150), Chelsea 7th (2.893) and Liverpool 8th (2.616). Real Madrid 5th (3.336), Juventus 9th (2.195) and Borussia Dortmund 10th (2.154) make up the rest of the top 10.
One Premier League club conspicuous by their absence in the top 10 is Manchester United. Despite having dominated English football for two decades, United rank 16th in the report – a fall of eight places from last year – with an FFI score of 1.743. The club continue to successfully leverage their global brand to generate significant revenues – they ranked 3rd behind the two Spanish giants in Deloitte’s recent revenue based report – but this only tells part of the story and, over 12 months, the Red Devils have experienced a depreciation in squad value, tangible assets and cash levels plus an increase in debt. The club have lost ground on both of their biggest regional rivals and it is interesting to note that Liverpool have now overtaken United in our report, as well as in the league.
Europe continues to dominate but with global influence
European clubs account for 80% of the top 30, a reflection of the dominance of Europe’s elite clubs, but interestingly, the ownership of this group of clubs is a much more global affair with just under 50% owned by non-European entities, including individuals or organisations from the Middle East, South East Asia and North America.
There are 15 different leagues represented in the top 100. UK clubs make up the biggest portion with 23 – 18 Premier League Clubs and five EFL clubs. Major League Soccer is the next most represented league with 17 clubs – 15 from the United States and two from Canada – followed by LaLiga and Serie who both have 11 clubs and then the Bundesliga which has 10. The J-League is represented for the first time as part of the report’s expanded scope, with two clubs – Nagoya Grampus and Vissel Kobe – featuring in the top 30 largely due to their corporate ownership by Toyota and Rakuten respectively. Vissel Kobe in particular have been able to leverage their ownership to sign European stars like Andres Iniesta, David Villa and Lukas Podolski in recent seasons.
Improving financial wellness
As a snapshot of the financial well-being of the world’s top clubs, the Football Finance 100 shows that squad values are continuing to rise – almost 20% up on the combined values for 2019. It also demonstrates that more money is coming into the game, with the combined owners’ wealth of the top 100 clubs increasing by 17.5% year-on-year, topping the trillion euros mark for the first time in the report’s history. Interestingly, the combined debt levels decreased by 8.6% compared to 2019, hinting at a collective improvement in the financial management of clubs.
Commenting on the findings of this year’s Soccerex Football Finance 100, Soccerex Managing Director, Philip Gegan said, “Congratulations to Paris Saint-Germain and all the clubs that made the top 100. This year’s report paints a positive picture of football’s collective financial health, but it also highlights the growing imbalance between the power of Europe’s modern elite, with some of the game’s heritage brands in danger of being left behind. The report shows that, despite Europe’s dominance, football is very much a global game with investment from football’s emerging markets very much underpinning its continued growth.”
The 2020 edition of the Soccerex Football Finance 100 study has been conducted in collaboration with recognised specialists in sports financial valuations, analysing clubs’ balance sheets and annual reports from 2017/18, the last globally complete financial year available, plus other renowned sources of information like UEFA, Financial Times, Bloomberg, Yahoo Finance, Forbes, Transfermarkt and Hoovers.