European football clubs have been left on the sidelines of a deals boom that has highlighted soaring valuations for US sports franchises and underlined the challenges facing Europe’s team owners. Investors argue that a failure to get a grip on costs, as well as the constant threat of relegation, has kept a lid on European interest even as a flurry of deals in the US has underscored rising valuations in several sports.
Valuations of the top men’s football teams, which are
concentrated in Europe, have stagnated at just 4.2 times revenue. M&A
activity in European football has dropped sharply since a spate of
record-breaking takeovers in 2022, according to figures from governing body
Uefa.
Apollo Global Management agreed to buy a controlling stake
in Atlético Madrid, Spain’s third-biggest football club, at a valuation of
between €2bn and €2.5bn in 2025. The lower end of that range implies a
valuation of 4.9 times its 2024 revenue.
According to the most recent figures from Uefa, more than
half of Europe’s top-flight football teams reported operating losses in 2024,
with an aggregate loss of €300mn. Transfer costs pushed overall pre-tax losses
up to €1.2bn, while combined debt rose 10 per cent to €28.1bn.
Other experts also cite the divergence in the media rights
markets in the US and Europe as an important reason for the difference in
desirability to investors. US sports leagues have successfully negotiated steep
increases in their media rights. The NBA’s latest set of deals, covering 11
years, resulted in income rising from $2.6bn a year to $6.9bn, driven by strong
competition from traditional cable networks and streamers.
Meanwhile media rights for major European football leagues
are either falling or showing signs of stagnation. Even the English Premier
League, the most commercially successful national competition, only managed to
secure a 4 per cent increase in its UK media rights, compared with eight years
ago, when the rights were last renegotiated.
As well as the closed format of the competitions US sports
teams share most central revenues equally, including income from TV deals,
increasing their attractiveness to investors. “The league organisation,
structure and revenue-sharing opportunities in the US vs anywhere else in the
world are just very different,” said John Lambros, head of digital media and
entertainment at Houlihan Lokey. “There’s lower risk and volatility in most US
sports . . . no relegation risk and predictable media rights make revenues
stable and foreseeable,” he added.
Football fans in Europe, however, are resistant to the
closed-league model. The widespread anger at plans for a breakaway European
Super League in 2021 was partly because the competition was designed so that
founding member clubs could not be relegated.
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