- Barcelona, who won their 25th La Liga title this season, are back in possession of football’s strongest brand, reclaiming the top position they lost to Real last year.
- Valued at almost USD 1.9 billion, Manchester United remain the world’s most valuable football club brand.
- Testament to their commercial prowess, Premier League (18) and Bundesliga (13) field 31 clubs in the Brand Finance Football 50 ranking.
- Airline, automotive, and financial services brands continue to dominate shirt sponsorship, accounting for 67% of agreements with the top 40 clubs.
- Football’s emerging markets, China, India, and the USA, have growing awareness of Europe’s top football leagues, according to new original research.
FC Barcelona boast the strongest football brand in the world according to the latest report by Brand Finance, the world’s leading independent brand valuation and strategy consultancy. Barça were pushed into second place in 2017 by bitter rivals Real Madrid, but after a season in which they had the upper hand in domestic football and benefitted from sponsorship deals, the Catalan club’s brand strength improved – from 95.4 to 96.6 – while Real’s remained virtually unchanged, despite another powerful performance in the UEFA Champions League. Barcelona’s rise as the world’s strongest football brand was also driven by excellent fan feedback in Brand Finance’s original research conducted in the developing football markets of China, India, and the United States.
The 2018 review of football brands demonstrates that the top clubs continue to grow in terms of brand value and strength, creating an elite group that has consolidated its position at the forefront of world football. Placings change, but breaking into the upper echelon is becoming increasingly difficult for contenders. What is more, the drawing power of football’s aristocracy has resulted in some of the biggest sponsorship deals in the world, forging mutually beneficial partnerships between corporate and club brands.
Barcelona went into 2017-18 with a new manager and lacking the talismanic Neymar, who reportedly yielded in excess of USD 250 million in transfer income for the club when he signed for Paris Saint-Germain (PSG). Barça also started the season with a new, lucrative shirt sponsorship deal with Japanese e-commerce company Rakuten that is earning them USD 67 million per annum, a figure bettered only by Real Madrid’s arrangements with Fly Emirates (USD 85 million) and Manchester United’s deal with Chevrolet (USD 74 million). Barça are significantly ahead of all their peers in their kit manufacturer agreement, however, grossing USD 189 million annually from Nike, the world’s number one sports sponsorship deal.
Barcelona may have enjoyed more recent success in Spain than Real Madrid, winning 13 honours versus Real’s four in the past decade, but Real have won three of the last four UEFA Champions Leagues and are poised for another final in 2017-18. Indeed, Real’s dominance in the leading European competition has created a dynasty that compares to the club’s golden age of the mid-to-late 1950s. Real’s brand is enhanced by the presence of Cristiano Ronaldo, the world’s most highly paid sportsman with 300 million social media followers.
Barcelona’s battle with Real Madrid extends beyond the playing field and is also about winning the hearts and minds of people outside of Spain, and indeed, Europe. According to Brand Finance’s original market research, La Liga has a very high level of awareness – some 59% – among football fans in China, India, and the USA.
Bryn Anderson, Director at Brand Finance, commented:
“The combination of domestic prominence and European presence makes Barcelona and Real Madrid two of the most powerful clubs in the world. Yet while their brands are instantly recognisable across all continents, they both face significant challenges in the years ahead when their star players, Lionel Messi and Cristiano Ronaldo, come to the end of their careers. Although the timing is uncertain, Barça and Real may have to invest to ensure there are succession plans in place.”
While the strength of Barça and Real’s brands, built on consistent success and global appeal, is undeniable, the two clubs, in terms of brand value, still trail Manchester United by a significant margin. Placed at the head of the table again this year, United’s brand value of USD 1,895 million is more than USD 300 million higher than that of either Real or Barça.
View the full list of the world’s most valuable football brands here.
Manchester United’s brand strength improved on 2017 by 3% and their brand value grew by 9%. After last year’s exile in the UEFA Europa League, United’s brand strength was enhanced by two trophies and a return to the Champions League this season. Like all Premier League clubs, United benefit from extraordinary broadcasting revenues, but the club’s commercial revenues, totalling USD 390 million in 2017, are far greater than domestic and most international rivals.
The composition of this year’s league table reflects the undoubted commercial power of the Premier League with 18 teams in the top 50 and six in the first 10. Premier League clubs enjoy elevated status due to broadcasting, which accounts for 60% of all revenues and, in some cases, contributes more than 90% of club income. In terms of matchday revenues, however, many of the Premier clubs have modest income, largely due to stadium size. Even prominent clubs like Chelsea and Tottenham have had restrictive home grounds that should be remedied with the construction of new stadiums. Outside of the United Kingdom, the Premier enjoys very healthy levels of awareness – 69% – in the growth markets polled by Brand Finance.
Bryn Anderson, Director at Brand Finance, commented:
“The English Premier League remains the most visible and most intensely marketed football league worldwide, hence its heavy presence in the Brand Finance Football 50. Although all member clubs benefit from strong broadcasting revenues and high levels of stadium utilisation, there is a huge gulf between the very top and the rest of the league. Furthermore, the reliance on broadcasting creates some vulnerability for the clubs and the challenge will be to successfully introduce a more balanced revenue mix in the future.”
The correlation between on-pitch performance and brand development has improved Liverpool’s brand strength by 4% and brand value by 33%. Manchester City, Premier League champions in 2017-18, saw brand value rise by 30% and brand strength improve by 4%. Tottenham Hotspur are also experiencing positive momentum with brand strength up 7% and brand value rising 10%. It is no coincidence that all three clubs have been widely praised for the quality of their football during 2017-18 – there has been a “feel-good factor” about these teams that contributes to strengthening the brand.
Muscle in Munich
A positive feeling is something that has been associated with Germany’s Bundesliga for some years, thanks to accessible ticket pricing and high levels of supporter engagement. Bayern Munich continue to lead the way with serial title wins, the sixth consecutive success being achieved in 2017-18. The Bundesliga remains the best supported football league in the world, with crowds averaging over 44,500 per game. Bayern generate higher commercial revenues than any other club globally, some USD 419 million in 2017. Bayern rise to fourth in this year’s ranking in terms of brand strength and also improved brand value by 15% to USD 1,406 million.
The Bundesliga provides 13 clubs in the top 50, but the gulf between Bayern and Germany’s other representatives is significant. The closest club to Bayern is Borussia Dortmund, the world’s best supported in terms of matchday attendances, with a brand value of USD 587 million, followed by Schalke 04, at USD 385 million.
Clubs with the track record and reputation of Bayern Munich are very attractive for the corporate world. Bayern’s own shirt sponsorship deal with Deutsche Telekom trails some of its peers, although this may be attributable to their historic approach of being sponsored exclusively by German brands such as Allianz, Adidas, and Opel.
Global corporates see clear opportunities for their own growth on the back of the brand strength of the top football clubs. For example, among the top 10 most valuable clubs, the lowest brand strength among sponsors is Rakuten with a single A rating. The size of the Rakuten deal with Barcelona, at USD 67 million per annum, suggests the Japanese company is looking to grow brand awareness through its association with Barça.
Emirates, who sponsor the shirts of Real Madrid (USD 85 million annually), Arsenal (USD 42 million) and PSG (USD 31 million), enjoy the highest level of awareness (32%) of all the leading sponsors, according to Brand Finance’s original market research conducted among fans in China, India, and the USA. No other corporate has as much visibility among the top clubs. Chevrolet, who sponsor Manchester United (USD 74 million) are not far behind Emirates in terms of awareness (30%), highlighting the power and reach of United’s brand.
Similarly, kit sponsorship can be lucrative for clubs, as evidenced by Barcelona’s landmark deal with Nike, but also for the corporate sponsor. The US sports apparel company is benefitting from high recall rates among fans, slightly higher than their rival, Adidas.
In shirt, kit and stadium sponsorship, companies are drawn to established names that are mostly traditional market leaders, although emerging clubs also represent an opportunity for sponsors. Interestingly, a recently established club, RB Leipzig (RBL) is the fastest-growing brand in the 2018 list. The club’s brand value is up by 140% to USD 348 million. In brand strength, RBL are ranked 16th, up from 45th position. RBL’s presence is not only a reflection of success on the field – second place in the Bundesliga in 2016-17 and a debut in the UEFA Champions League – but also evidences the sponsorship backing of Red Bull. The RBL story captures the zeitgeist of the modern game, but this fledgling club is still a considerable distance from established football institutions like Bayern Munich.
If RBL represents the new breed, PSG are several years into the project that started with the acquisition by Qatar Sports Investments. Yet PSG lost 10% in brand value, dropping below the USD 1 billion mark, and brand strength was unchanged at 83.1. Once again, they under-achieved in the UEFA Champions League, but the 2017-18 campaign saw the club regain the Ligue 1 crown. Although PSG remains the most successful French football club with a team that now includes Neymar and Kylian Mbappe, the implications of a possible breach of Financial Fair Play rules may impact their brand strength in the future.
Like PSG in France, Juventus remain significantly ahead of the competition in Italy. Juve’s brand value rose by 23% to USD 605 million, thanks to a run to the Champions League final in 2017 and continued domestic success. Juve’s bold rebrand affected the club’s brand strength this year (down 2% to 88.9) as fans in Italy and elsewhere are still getting used to the club’s new visual identity.
It is worth noting, though, that Juve’s arch-rivals, Internazionale Milan, with new investors from China, improved brand value by an impressive 119% to USD 475 million and rose from 28th to 13th. Inter’s crosstown rivals, AC Milan, in 18th place, increased brand value by 10% to USD 315 million, also has Chinese investors.
China’s influence on world football is growing to such an extent that the future may see Chinese Super League brands making an appearance in Brand Finance reports. With strong government support, increased awareness of the league approaching 50% and growing attendances, football is certainly in the ascendancy in the world’s second largest economy. Likewise, the US Major League Soccer is maturing, with its profile locally and globally rising (awareness now over 50% in developing markets) and clubs running on sensible business lines and playing in top quality stadiums.
Bryn Anderson, Director at Brand Finance, commented:
“The current Brand Finance Football 50 reflects the evolution of the modern football business paradigm with clubs the beneficiaries of strong marketing, globalisation, and the enduring popularity of the world’s top sport. But for growth trajectories to maintain their momentum, all top clubs need to continue broadening their global footprint, forming relationships and revenue generating opportunities in growth markets. Ultimately, however, much of football’s future depends on ensuring the product is of a sufficiently high quality to continue attracting sponsors and broadcasters, the latter of which have become so vital for the game’s financial health.”
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 50 most valuable football club brands in the world are included in the Brand Finance Football 50 2018 league table.
Additional insights, charts, and tables on the most valuable and strongest football club brands, sponsorship analysis, and fan engagement market research in the emerging football markets of China, India, and the USA, as well as methodology and definitions of key terms are available in the Brand Finance Football 50 2018 report.
Brand value is equal to a net economic benefit that a brand owner would achieve by licensing the brand. Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand.
Data compiled for the Brand Finance league tables and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.
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About Brand Finance
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Brand Investment, Brand Equity, and the impact of those on Brand Performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of football-related Brand Investment, Brand Equity, and Brand Performance metrics. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 As brand has differing effects on each source of income, revenues are split down into three streams: matchday, broadcasting, and commercial, each with a corresponding royalty range. For instance, due to the greater influence of the brand on sponsorship deals and merchandising, commercial revenues enjoy a royalty range with a higher maximum percentage than broadcasting or matchday revenues.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine applicable football-specific revenues, which can be categorised under matchday, broadcasting, and commercial revenue.
5 Determine forecast revenues using a function of historic revenues and expected future performance.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Brand revenues are discounted post-tax to a net present value which equals the brand value.