![]() What are the possible explanations for such a vast gap between estimated value and reported acquisition price? Price and value – two different concepts. Comparing the reported price tag of EUR 3.6bn to Chelsea's highest annual total operating revenues they ever recorded - EUR 513m in the 2018/19 season - the EV to total operating revenue multiple stands at around seven, notably higher than what past data shows. Top clubs' valuations above stood at four to five times their yearly total operating revenues at the peak of the football industry's growth. (See a previous analysis on Chelsea’s financial evolution in the Abramovich era here.) In fact, the club still owed EUR 1.6bn to him at the closing date of the 2020/21 financial year, but Abramovich decided against calling in the loans. The major reason behind this stark difference is the way Abramovich ran the club, chasing on-pitch successes to the detriment of financial performance. They are the only club in this shortlist of elite clubs to have registered an aggregate net loss, while the other clubs successfully generated profits for their owners. The stock market valuation shows a similar trend, as an examination of Manchester United FC's Enterprise Value on the New York Stock Exchange demonstrates: the club's valuation was close to EUR 3.5bn in early 2020 pre-pandemic, but since then it has fallen considerably, as on the first trading day of 2022 their EV stood at EUR 2.7bn (-23%).Īnother aspect that separates the Blues from their peers is their net results over the past ten years. In our latest, 2021 valuation also examining the impact of the COVID crisis, EV values have fallen significantly for all clubs. It is also interesting to note that, although marginally, Chelsea's best performance was from 2019 and not from the last pandemic-free season (2020) - unlike the rest of the peer group - signaling that their EV trend deviated from the upward trajectory they were on before, due to failed qualification to the UCL and worsened player trading activities. However, Chelsea FC appear to be lagging, as their highest EV ever recorded is significantly below, at EUR 2.2bn, with a top range of EUR 2.3bn. Manchester United FC have also managed the eclipse the EUR 3bn mark, while FC Bayern München were just shy of reaching this threshold. Real Madrid came closest in 2020, when their EV midpoint reached EUR 3.5bn and their top range reached EUR 3.6bn. The table below summarizes some key financial information about Chelsea FC and three selected comparable clubs from their most successful financial years in this period.Īccording to our expert opinion, there are football clubs whose fair market value on January 1, 2020, has come close to a EUR 3.6bn price tag. ![]() The question on all stakeholders' minds is: What is Chelsea's fair value? A question we are thrilled to help answer.įootball Benchmark have undertaken the estimation of the Enterprise Value (EV) of the most prominent football clubs in Europe since 2016. ![]()
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