Daily Cannon
·14 June 2024
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Yahoo sportsDaily Cannon
·14 June 2024
Let’s delve into the factors contributing to Arsenal’s financial success, including player acquisitions, youth development, and the club’s return to the UEFA Champions League.
LONDON, ENGLAND – MARCH 09: Arsenal fans show their support and hold up a banner reading “Vamos” prior to the Premier League match between Arsenal FC and Brentford FC at Emirates Stadium on March 09, 2024 in London, England. (Photo by Justin Setterfield/Getty Images)
According to Football Benchmark, Arsenal experienced a 35.1% annual improvement in its Enterprise Value (EV), positioning it significantly ahead of many clubs, including UEFA Champions League finalist Borussia Dortmund, which sits in 11th place, one behind the Gunners. This growth is attributed to Arsenal’s return to the UEFA Champions League and substantial squad enhancements, making Arsenal the second most valuable team as of May 2024.
The Premier League continues to dominate the ranking with nine clubs in the top 32, accounting for 44% of the aggregate EV. Despite losing Leicester City and Wolverhampton Wanderers, the league maintains its strong presence with West Ham, Aston Villa, and Everton also included.
In the European context, La Liga holds 21% of the total EV, while Italian clubs and German clubs have comparable aggregate EVs, the top German clubs’ average EV is significantly higher than that of the Italian clubs.
The Portuguese Primeira Liga and Dutch Eredivisie together represent only 3.8% of the top 32’s aggregate EV, highlighting the growing disparity between top leagues and others.
Arsenal‘s strategic player acquisitions include significant deals. In terms of youth development, Arsenal focuses on both internal talent nurturing and signings. Clubs like Chelsea and Real Madrid lead in youth player acquisitions, with substantial investments in young talent.
The overall profitability and revenue growth are significant factors driving the increase in EV among top clubs. Real Madrid, Manchester City, and Manchester United show substantial profitability due to increased matchday and commercial incomes. Arsenal‘s ability to balance cost-cutting measures with on-pitch competitiveness, as seen in their 2023/24 performance, reflects this trend.
Arsenal‘s remarkable 35.1% growth in EV positions it prominently among both Premier League and European clubs, although they are still behind both Manchester clubs, Liverpool, Spurs, Chelsea, Bayern Munich, PSG, Real Madrid and Barcelona.
While the Premier League dominates with the highest number of clubs in the top 32, European giants like Real Madrid and Bayern Munich lead in overall EV and revenue. Arsenal‘s strategic player signings and return to the UEFA Champions League underpin its significant growth, marking it as a competitive force in both domestic and European football.
Enterprise Value (EV) is a comprehensive metric used to assess the total value of a company, including not just its market capitalisation but also its debt and excluding any cash or cash equivalents. EV provides a more accurate representation of a company’s worth by considering all aspects of its capital structure.
EV = Market Capitalisation + Total Debt − Cash and Cash Equivalents
In the context of football clubs, EV is particularly useful as it includes the value of the squad, stadium, and other sporting infrastructure, along with financial assets and liabilities. This allows for a better assessment of a club’s total value beyond just its revenues and profitability.
For example, in the Football Benchmark report, EV is used to rank and compare the value of different football clubs, taking into account their financial performance, market position, and asset value.
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