As we know, European soccer holds a special place in the hearts of football fans. And on the Old Continent, British soccer, reputed to be more spectacular, faster and more technical than that of its neighbors, is even more glorified (and bankable) than the others. The great English clubs, Manchester United, Liverpool, Arsenal and Chelsea, to name but a few, have extended their influence beyond the arena, to become real brands, popular and extremely lucrative. So be it. But do these houses deserve the insane valuations they are given?

This is the question asked by the Manchester United, the most successful club in the English league since 1888. The Glazer family, which owns the company, has announced that it will be put up for sale at the end of 2022, for an estimated target price of between $6 billion and $7 billion (in dollars, as the entity is listed in the US). Currently with an enterprise value of $4.5 billion based on its stock price, the club would actually be worth about $1.6 billion if valued as a traditional business.

Of course, soccer clubs are not conventional businesses. Their valuation depends on extra-financial criteria, such as the history of the club, its rarity, the volume and loyalty of its supporters, etc. And as the British financial daily also explains, the club can also rely on external sources of revenue, such as non-fungible tokens and sports betting. So be it. But still, it seems that the FT's arguments have hit the nail on the head, as MU's share price dropped 10% in the process.

Before Manchester, the London club Chelsea was sold in May 2022 for 4.25 billion pounds (5.07 billion dollars). The largest sum, at the time, ever spent on a sporting institution. In November 2022, the FSG (Fenway Sports Group) would have put Liverpool up for sale, hoping to get 4.45 billion dollars, before backing out. Finally, last month, it was Tottenham's turn to be the subject of rumors of sale, for the modest sum of 3.75 billion dollars.

Before clubs, another type of valuation was regularly in the news: that of the players. I won't go over the biggest transfers of the mercato here, but I'll offer a bridge to the next one: because in 2023, it's the valuation of managers that is the focus. 

Drawing by Amandine Victor for MarketScreener