Real Madrid has been named the most valuable football brand in the world, leapfrogging English side Manchester United, according to Brand Finance’s annual report.
Brand Finance’s methodology takes in factors such as match day revenue, broadcast revenue and commercial revenue. It then produces a Brand Strength Index (BSI) score out of 100 and uses this to extrapolate future revenue estimations using royalty rates.
Real Madrid’s brand value increased by 26.9 per cent from 2018 to 2019 and is now worth more than €1.6 billion (US$1.79 billion).
2019 marks the first time in nine years that Real Madrid has topped Brand Finance’s rankings. The combination of commercial revenues and on-pitch success in the UEFA Champions League has propelled Los Blancos to the apex of the value pyramid.
Real Madrid received €70 million (US$78.4 million) from sponsors Emirates and €110 million (US$123.2 million) from Adidas, whilst their matchday revenues totalled €143 million (US$160.2 million).
Bryn Anderson, Brand Finance Director, said: “Real Madrid have shown this year who truly reigns supreme in the world of football. They triumph not only as the most valuable and strongest brand but their enterprise value and stadium are also ranked second to none.”
Despite Madrid’s BSI actually dropping from 96.2 to 95.5, the club was able to overtake Manchester United as the 20-time English champions’ brand value fell 5.8 per cent year-on-year.
The Red Devils have experienced a tumultuous existence since the retirement of Sir Alex Ferguson, going through four managers in six years.
The poor performances on the pitch and lack of exposure from not playing regularly in the UEFA Champions League, have seen public perceptions of the brand drop.
Barcelona, Bayern Munich, Manchester City, Liverpool, Chelsea, Paris Saint-Germain, Arsenal and Tottenham make up the rest of the top ten.
English top flight side Wolves skyrocketed into the top 50 coming in at 28th as a new entry. The club was only promoted to the Premier League at the start of the 2018/19 season, but an excellent season on the pitch has seen their value boosted.
Chinese owners Fosun and strong links to agent Jorge Mendes has afforded the club a wider global reach. Playing European football next season will surely only improve their standings.
Manchester United and Wolves are just two of the 17 Premier League clubs in the top 50, making it the most represented league in the rankings. This is largely in part due to the grossly inflated broadcasting revenues that are afford to English clubs compared to other European leagues.
In 2017, Premier League clubs split a broadcasting purse of €2.9 billion (US$3.2 billion) between its 20 teams. Spain’s top flight, LaLiga, only had €1.2 billion (US$1.34 billion) in comparison.
The Premier League also saw a 6.9 per cent increase in brand value, ensuring it sat atop the ranking for yet another year. LaLiga overtook the German Bundesliga after a 23.3 per cent growth but still sit nearly €5 billion (US$5.6 billion) behind the Premier League in value.
Spanish top flight club Sevilla saw their brand value increase by 49.1 per cent, the greatest single increase by any club year-on-year.
Source: European Media