Wednesday, July 24, 2024

Arsenal’s “Enterprise Value” surges by 35%

According to a new report, Arsenal’s “Enterprise Value” increased by 35% in the last 12 months, the second-highest rise by any of Europe’s top 30 clubs.

The ninth edition of Football Benchmark’s “Football Clubs’ Valuation: The European Elite” estimates the Gunners are now worth €3.1 billion, a figure that sees Stan Kroenke’s club retain 10th place in the overall rankings for a second successive year.

To calculate the final figure, Football Benchmark – a spin-off of KPMG’s Sports Centre of Excellence – uses a proprietary algorithm that considers the differences between football clubs and the markets and the economies in which they operate taking into account five key parameters – profitability, popularity, sporting potential, broadcasting rights and stadium ownership.

In Football Benchmark’s own words, “the Enterprise Value of a company is calculated as the sum of the market value of the owners’ equity, plus total debt, less cash and cash equivalents. It indicates what the business is worth regardless of the capital structure used to finance its operations.”

While Arsenal are trending upwards after three years of progress on and off the pitch, the club remains behind England’s other ‘Big Six’ clubs. Chelsea (9th, €3.2bn), Sp*rs (7th, €3.5bn), Liverpool (5th, €4.1bn), Manchester United (3rd, €4.8bn) and Manch115ter City (2nd, €4.9bn) are all valued higher, as are European super clubs, PSG, Bayern Munich, Barcelona and Real Madrid.

If there’s a positive, it’s the prediction that “the Gunners can expect further significant improvements in the next editions, thanks to their return to the UEFA Champions League and a substantial enhancement of their squad strength, positioning them as the second most valuable team as of May 2024.”

The report also underlines a huge gulf between the top 10 clubs and those making up the rest of the list. Borussia Dortmund, one place behind Arsenal, is valued at over €1 billion less.

Assuming you like this sort of thing, the full report makes for an interesting read. If you can’t be arsed, well, we totally respect that attitude.

It’s a slow news day…

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Me2

What a load of garbage.
To suggest that Spurs – the team that achieves nothing decade in decade out is bigger than Arsenal or Chelsea is ridiculous.

Dr. Gooner

I look at it as, in the past 7 years they’ve had UVL football and struck gold on a generational goal scorer, yet achieved nothing of note, are barely ahead even in this financial metric, and are going to be put back into their place by Mikel’s teams forthwith.

Dr. Gooner

I look at it as, in the past 7 years they’ve had UCL football and struck gold on a generational goal scorer, yet achieved nothing of note, are barely ahead even in this financial metric, and are going to be put back into their place by Mikel’s teams forthwith.

Crash Fistfight

You can say that again.

Michael

I have hated Sp*rs since about 1967 and wish them only failure and relegation. In all those years they never rose above Arsenal in any table that spoke of suceess or worth and they do not do that now so the report is garbage.

gooner

How good is Enterprise Value with his back to goal and general link up play?

Crash Fistfight

Great, but doesn’t score enough goals.

WayBackWhen

I’m going to help out with this one, template answers to cut, paste and edit slightly. Choose one of the following: a) This is really interesting, particularly the bit about [add something here while pretending to know and care], but I’m surprised that [add something else you’ve googled/Chat GPT’d], shame about those up the road [add something here about their new stadium]. b) This is all well and good but [add something here about how does this buy us a new left back – preferably in an angry tone, consider adding “sorry but” at the start]. c), I guess that’s… Read more »

Absolute Camel

This is all valuable information and excellent reporting… When are we announcing Mbappe though?

Carlos

d)

Ebo

This is really interesting, particularly that bit about it being good for the Kroenkes, but none of this matters because how does this buy us a new left back?

Dr. Gooner

This is amazing 🤣🤣🤣

Ebo

For the life of me I don’t understand how a club in a far shittier part of London, who has both historically been shit and also recently not been anywhere near as good as us, is still valued higher than us.

Oh and the same applies to Tottenham too.

Johnny 4 Hats

We used to have a higher enterprise before star Chips died.

Daveo

We’re still 221 years pre the far bigger enterprise even being built. Live long as prosper y’all…

Catbiscuits

Their new stadium is basically a money tree

Crash Fistfight

Had me in the first half, not gonna lie

Top Bins

Surely Sp#r’s debt from building the Toilet Bowl needs to be taken into consideration? We can’t ignore the liability while only looking at the value of the asset? Not sure if I’m missing something here but how can they not be successful on the pitch yet be 7th.. it’s not like they are like Man Utd or other clubs that’s value stems from previous years of winning titles 🤔

Ebo

The article mentions debt is taken into account here, as far as I understand it that relates to a club’s direct debts, but maybe not if it’s loans taken by the owner(s) for which they are liable rather than the club itself. Not sure which one it is in Sp*rs’ case.

Crash Fistfight

The article says “sum of the market value of the owners’ equity, plus total debt, less cash and cash equivalents.”

Does that mean the stadium debt actually increases their overall figure?

Ebo

No because debt is usually noted as a negative number

Crash Fistfight

Ah, that makes sense. Funny terminology – plus a minus figure for debt, but minus a positive figure for cash and cash equivalents.

Dave Cee

The enterprise value is market value PLUS debt, bcos if there was no debt the market value would be higher.
Similarly, cash is taken off the market value, bcos if there was no cash the market value would be lower

Dave Cee

It’s kind of like selling a house without paying off the mortgage 1st, the buyer is taking on that debt

Ragnar

Other answer is incorrect, but the article is right. Enterprise Value is trying to measure the underlying value of the club. It’s being financed with Equity and Debt, which is why it’s plus.

Think of it this way: You have 100 coins, you borrow 50 coins. You buy a football club for 140 coins, and have cash and cash equivalents of 10 coins.
EV=140
EQ+Debt=150
Cash=10
EQ+Debt-Cash=EV=140

Ron

Did Man city’s increase by 115%?

Fezec

And how Chelsea are selling the clouds over Stamford Bridge to fund the Olisse deal?

Dr. Gooner

The one thing I admire about Chelsea, and it’s the ONLY thing, is their academy production of top flight ready players. Even if it’s heavily financially doped, they still have to develop them and they do it well. I would love to just have guys like Colwill, James, Gallagher, Maatsen and so forth popping out of Hale End. An area of big improvement need for Arsenal.

Dr. Gooner

I bring this up because a productive academy is one of the only long term ways to stay financially competitive in this landscape while complying with the rules. La Masia for instance has produced Pedro Gonzales and Lamine Yamal in recent years plus several lesser talents they can sell for meaningful money to top flight clubs.

MeW1lko

Spurs are a billion in debt after their stadium rebuild. What is this nonsense?

Public Elneny

THEY’LL BE DANCING IN THE STREETS OF NORTH LONDON TONIGHT

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