After calculating enterprise value for TOP100 clubs (https://managementoffootball.com/top-100-european-clubs-by-enterprise-value/) in 31 European leagues, I have calculated Brand value of TOP75 clubs from the same leagues.
What is brand value? Brand value is value stated in money somebody would be ready to buy your brand for. It is defined through logo, brand name, and everything what is perceived as indivisible part of your brand identity.
Why is it important? “A brand encompasses the name, logo, image, and perceptions that identify a product, service, or provider in the minds of customers. It takes shape in advertising, packaging, and other marketing communications, and becomes a focus of the relationship with consumers.” Further on, Wikipedia states, that brand equity, defined in marketing as “the worth of a brand in and of itself – i.e., the social value of a well-known brand name” is important for determination of price structure.
By Wikipedia, Interbrand classifies these uses of brand valuation in three categories:
- Financial applications (e.g. mergers and acquisitions, balance sheet valuation, investor relations)
- Brand management applications (e.g. brand portfolio management, resource allocation)
- Strategic / Business case applications (e.g. brand architecture, brand repositioning)
When we talk about methodology, there are different methodologies for calculating brand equity by Wikipedia:
- The cost approach (amount of money which someone would use to create the equivalent of observed brand),
- The market approach (it is based on comparison of market price of other brands)
- The income approach:
- Price premium method (price premium it generates comparing with non-branded product similar quality)
- Volume premium method (volume premium it generates comparing with non-branded product similar quality)
- Income split method
- Multi-period excess earnings method
- Incremental cash flow method or Excess Margin
- Royalty relief method
*More about specific brand methodologies you can find in (Clark, R. (2013): Measuring the Value of Brands) on link: http://www.valcoronline.com/PDFs/Valuing%20Brand%20Equity_10-7-13_vFINAL(rc).pdf
The same logic used in calculations of enterprise value is used here as well. A number of “things” might influence on brand, or if you want strength of brand influence on number of “things”. And those “things” make “footprints” for brand value in the world around us. So, first goal was to identify as many “footprints” as possible and collect data about them. Data I have been using were data which are not data from financial reports. Instead, we have been using a spectrum of external (not from club documents or reports) and exclusively publicly available data.
Same as in enterprise value, the final goal was to find the algorithm in the standardized model for the spectrum of clubs from the lowest brand value in Europe to clubs with the highest enterprise value in Europe (from 0mil € or something less to 1500mil€). For both, enterprise value and brand value, the second goal was to find an algorithm which is time resistant as long as possible. Finally, the algorithm was found using different analyses in inferential statistics and I have made the list of TOP75 clubs in Europe by brand value (MoF further in text).
Same testing was used for brand value as for enterprise value calculation. Before release, an algorithm in a standardized model was tested in several ways. First, algorithm results were checked by logical brand value in reality for the whole span of club values, from lower valued clubs as well as high valued clubs (span should go from 0 to 1500mil€ in the logical sense). The second quality check was confirmed by statistical analysis rules. The third was a comparison with brand value calculated by KPMGs spin-off, Football Benchmark (https://www.footballbenchmark.com/library/football_clubs_valuation_the_european_elite_2022); comparing results of enterprise value with KPMGs spin-off, Football Benchmark we receive 97% of statistically positive significant correlation between results. Forth was using data from years before instead of one, last year.
I have been looking on 11 external areas as “footprints” of what’s happening within the club for a period of time. Those areas are 1. success in European competitions (UEFA), 2. investment in the team, 3. social networks, 4. team structure, 5. value of the team, 6. Sale-buying, 7. stadium, 8. attendance, 9. domestic competition, 10. general environment and 11. football environment. Through different stages of research, we have been using in total more than 170 different variables to find the final standardized algorithm. Also, we have been using data about single variables from 5 years before and for some variables even 10 years before.
We have been analyzing 227 clubs from 36 European leagues. 31 leagues are from the 1st national tier and 5 leagues are from the 2nd national tier:
| 1 | ESP – La Liga |
| 2 | ESP – La Liga 2 |
| 3 | ENG – Premier league |
| 4 | ENG – Championship |
| 5 | GER – Bundesliga |
| 6 | GER – 2. Bundesliga |
| 7 | FRA – Ligue 1 |
| 8 | FRA – Ligue 2 |
| 9 | ITA – Serie A |
| 10 | ITA – Serie B |
| 11 | TUR |
| 12 | POR |
| 13 | NED |
| 14 | SCO |
| 15 | SVI |
| 16 | ROU |
| 17 | UKR |
| 18 | BEL |
| 19 | RUS |
| 20 | GRE |
| 21 | POL |
| 22 | SER |
| 23 | CRO |
| 24 | AUT |
| 25 | HUN |
| 26 | CZE |
| 27 | DEN |
| 28 | NOR |
| 29 | SWE |
In the analysis were included all clubs from the Big 5 leagues and the best clubs from other listed leagues. More clubs per league were selected from the following leagues: Netherlands, Portugal, Turkey, Belgium, English Championship and Russia (*this year’s results are not affected by the war in Ukraine for Ukraine and Russian clubs)
| Nr. | Club | State | BV mil € |
| 1 | Real Madrid | SPA | 1377 |
| 2 | FC Barcelona | SPA | 1348 |
| 3 | Manchester United | ENG | 1303 |
| 4 | Liverpool FC | ENG | 1273 |
| 5 | Bayern Munich | GER | 1183 |
| 6 | Manchester City | ENG | 1143 |
| 7 | Chelsea FC | ENG | 1013 |
| 8 | Paris Saint-Germain | FRA | 918 |
| 9 | Tottenham Hotspur | ENG | 820 |
| 10 | Arsenal FC | ENG | 767 |
| 11 | Juventus FC | ITA | 678 |
| 12 | Borussia Dortmund | GER | 612 |
| 13 | Atlético de Madrid | SPA | 533 |
| 14 | Inter Milan | ITA | 501 |
| 15 | AC Milan | ITA | 378 |
| 16 | Leicester City | ENG | 317 |
| 17 | Everton FC | ENG | 313 |
| 18 | SSC Napoli | ITA | 305 |
| 19 | AS Roma | ITA | 280 |
| 20 | RB Leipzig | GER | 277 |
| 21 | Olympique Lyon | FRA | 263 |
| 22 | Bayer 04 Leverkusen | GER | 251 |
| 23 | AFC Ajax Amsterdam | NED | 233 |
| 24 | Olympique Marseille | FRA | 215 |
| 25 | Valencia CF | SPA | 208 |
| 26 | FC Porto | POR | 188 |
| 27 | Aston Villa | ENG | 187 |
| 28 | West Ham United | ENG | 183 |
| 29 | AS Monaco | FRA | 180 |
| 30 | Real Sociedad | SPA | 175 |
| 31 | Wolverhampton Wanderers | ENG | 172 |
| 32 | SL Benfica | POR | 170 |
| 33 | Newcastle United | ENG | 168 |
| 34 | SS Lazio | ITA | 157 |
| 35 | Sevilla FC | SPA | 153 |
| 36 | Southampton FC | ENG | 148 |
| 37 | Galatasaray A.S. | TUR | 146 |
| 38 | Atalanta BC | ITA | 143 |
| 39 | LOSC Lille | FRA | 136 |
| 40 | Real Betis Balompié | SPA | 134 |
| 41 | ACF Fiorentina | ITA | 130 |
| 42 | Athletic Bilbao | SPA | 129 |
| 43 | Sporting CP | POR | 125 |
| 44 | FC Schalke 04 | GER | 124 |
| 45 | Fenerbahce SK | TUR | 123 |
| 46 | Crystal Palace | ENG | 122 |
| 47 | Eintracht Frankfurt | GER | 122 |
| 48 | Borussia Mönchengladbach | GER | 115 |
| 49 | TSG 1899 Hoffenheim | GER | 112 |
| 50 | PSV Eindhoven | NED | 108 |
| 51 | Brighton & Hove Albion | ENG | 105 |
| 52 | Villarreal CF | SPA | 103 |
| 53 | Stade Rennais FC | FRA | 96 |
| 54 | VfL Wolfsburg | GER | 95 |
| 55 | OGC Nice | FRA | 92 |
| 56 | Leeds United | ENG | 86 |
| 57 | Fulham FC | ENG | 86 |
| 58 | AFC Bournemouth | ENG | 84 |
| 59 | Hertha BSC | GER | 83 |
| 60 | FC Zenit | RUS | 82 |
| 61 | Red Bull Salzburg | AUT | 81 |
| 62 | Watford FC | ENG | 79 |
| 63 | Feyenoord Rotterdam | NED | 79 |
| 64 | VfB Stuttgart | GER | 77 |
| 65 | FC Girondins Bordeaux | FRA | 76 |
| 66 | SV Werder Bremen | GER | 75 |
| 67 | West Bromwich Albion | ENG | 74 |
| 68 | Rangers FC | SCO | 72 |
| 69 | Sheffield United | ENG | 70 |
| 70 | Torino FC | ITA | 70 |
| 71 | Club Brugge KV | BEL | 70 |
| 72 | Trabzonspor | TUR | 69 |
| 73 | Stoke city | ENG | 68 |
| 74 | AS Saint-Étienne | FRA | 67 |
| 75 | Burnley FC | ENG | 66 |
| TOTAL: | 22,161 bil € |
The total value of TOP75 clubs is 22,161 bil. € coming from 12 European leagues with 6 clubs from the 2nd national tier:
| Number of clubs in TOP75 | Total brand value of clubs per league | Percent of brand value of clubs from single league in TOP 75 | Average brand value of clubs per league | |
| ENG | 23 | 8649 | 39% | 376 |
| SPA | 9 | 4159 | 19% | 462 |
| GER | 12 | 3125 | 14% | 260 |
| ITA | 9 | 2642 | 12% | 294 |
| FRA | 9 | 2042 | 9% | 227 |
| POR | 3 | 483 | 2% | 161 |
| NED | 3 | 419 | 2% | 140 |
| TUR | 3 | 338 | 2% | 113 |
| RUS | 1 | 82 | 0% | 82 |
| AUT | 1 | 81 | 0% | 81 |
| SCO | 1 | 72 | 0% | 72 |
| BEL | 1 | 70 | 0% | 70 |
In the above table, values of clubs from a single league were summarized to identify differences between leagues in TOP75 brand value. The highest brand value of clubs from a single league in TOP75 is having English Premier league (8649mil€) followed by Spain La Liga (4159mil€), German Bundesliga (3125mil€), Italy Serie A (2642mil€) and French Ligue 1 (2042mil€). Mosta valuable club from second tier is Fulham (86 mil €). English Premier league is pointed out with more than double as value as Spain La Liga.
If we look at the column “Percent of brand value of clubs from single league in TOP 75” we will see again that the English Premier league pointed out. 85% of clubs from the Premier league, are part of TOP75, followed by German Bunesliga (67%), Italy Serie A (45%), Spain La Liga (45%) and France Ligue 1 (45%).
The column “Average brand value of clubs per league” is the value from all clubs from one league in TOP 75 divided by the number of clubs in the observed league. Leagues with a higher number of clubs will have less average if they have the same number of clubs in the TOP 75 as leagues with fewer clubs in it. Spain La Liga is having is having the highest average (462mil€) followed by Premier league (376mil€), Italian Serie A (294mil€), German Bundesliga (260mil€), and France Ligue 1 (227mil€). In Enterprise value, on first position was Premier league while second was Spanish La Lia.
Those two columns (“Percent of brand value of clubs from single league in TOP 75”, and “Average brand value of clubs per league”) might indicate the concentration of overall brand strength.
If we compare results from the MoF BV list and results from KPMGs spin-off Football Benchmark, clubs which fall of the KPMGs spin-off Football Benchmark list are 1. FC Köln, Celtic FC. On the other side FC Porto, AS Monaco, Real Sociedad, SS Lazio and others came in.
Again, in Brand value as in Enterprise value, it is noticeable that generally Italian clubs are generally higher valued in the Mof BV algorithm than in KPMG’s spin-off, Football Benchmark.
The characteristic of this method is that at any moment value of any club in Europe can be calculated based on publicly available data. Although results were tested with KPMG’s spin-off Football Benchmark and sales which really happened, using financial reports for another step of testing the model would be beneficial. Characteristic of this model is that it is standardized and not influenced by any possible misleading in financial reports.
Model by itself reveals what from reality influences most on the brand value of the clubs and as such, they can be used for setting relevant and measurable goals for the top management of the club, and for setting KPIs for the top management of the clubs regarding either brand or enterprise value.
With enterprise value and brand value research finished, we are moving to next research:
- The quality of human capital in club management is interesting as well as sports staff especially. So, on the list of next research is a calculation of:
- standardized model of quality of management of clubs and
- standardized model of quality of sport management of the club..
Moving from management of the club to the performance on the pitch, research which is almost to be released is about differences per TOP5+4 leagues, trying to identify models how to win, not to lose, score goals or create chances.
If you have any comments, we would be grateful to talk about this, what do you think about the possibility of this kind of calculations of brand value, what do you think about results and do you have maybe any idea about improving this research (combining with financial reports would, of course, be very useful but here is an idea to use date, not from financial research) and about further research. Special thanks goes to all guys from www.managementoffootall.com
Check out this article on LinkedIn: https://www.linkedin.com/pulse/calculated-top75-european-clubs-brand-value-2021-slaven-marasovi%C4%87/