The new domestic broadcasting deal that came into play in 2016/17, combined with wage restraint
due to the Premier League’s Short Term Cost Control rules, has boosted club income and
profitability.
As a result the total value of EPL clubs has risen over 30% to £15.8 billion.
The clubs have been valued using the Markham Multivariate Model (MMM) devised by Dr Tom
Markham, a graduate of the University of Liverpool’s Football Industries MBA programme, and now
head of Strategic Business Development at Sports Interactive, the producers of Football
Manager.
The average value of a club in the EPL is now £791 million, up from £607 million the
previous season.
This helps explain why there are so many investors, speculators and charlatans keen to get involved
in the division.
This is the formula that is used to calculate club values (Revenue + Net Assets) x (Revenue
+ Cleaned Net Profit + average gain on player sales over last three years)/ Revenue x stadium
utilisiation % / wage control %)
The formula assumes that the club will continue to be in the EPL for at least five years.
If the club was relegated then values in the Championship are probably only 15-20% of the
Premier League’s figures, so for Swansea, Stoke and West Brom, the figures featured
in this video will no longer be accurate.
Their position in the following list was calculated on the basis of their remaining in the league.
Bear in mind, value is based on the most recent set of club accounts, which were filed regarding
the 2016/17 season, not the one just finished.
For that reason, the clubs that were relegated last season appear in this list.
20: Crystal Palace £142 million (£142 million in 2016)
London club Crystal Palace shouldn’t really be bottom of the table, but for reasons best
known to themselves they have chosen to not submit their accounts to the registrar, even
though the due date was 31 March.
We’d expect the value to be closer to £300 million based on the estimates for last season.
19: Swansea City £183 million (£108 million in 2016)
Swansea are bottom due to paying out a higher proportion of income as wages than nearly
any other EPL club.
Value would be lower but was saved to an extent by the sales of Ayew & Williams which boosted
profits in the short term.
The club’s value is likely to be about £40 million in Championship.
18: Sunderland £216 million (2016 £128 million)
The only EPL club last season to lose money after player sales, Sunderland were this week
given away for nothing as they face League One.
Daft transfers, boardroom payoffs and a revolving door in the manager’s office.
Owner Ellis Short may have lost over a quarter of a billion pounds from his involvement with
the Black Cats.
17: Hull £257 million (2016 Championship)
As a recent Yo-Yo club, their value in Championship is likely to be about £40-50 million following
relegation as TV accounted for 80% (£94m) of their income in 2017.
16: Watford £283 million (2016 £184 million)
Another club who cope well with a relatively small stadium.
Their wages are kept under control and the Hornets generate modest profits.
Sales of Ighalo & Vydra helped boost results in 2017.
Could be attractive to a buyer in their present state as they are close enough to London to
command a premium.
15: Stoke £300 million (2016 £132 million)
Stoke are a textbook beneficiary of the new TV deal.
Their wage control has improved from 79% to 62% of income being spent on wages, their
income rose by nearly a third & the club has no external debt.
Whilst the value is likely to hold in 2018 that ignores the impact of relegation, so
expect the value to fall in 2019.
14: Middlesbrough £312 million (2016 Championship)
Boro’s lack of ambition in the EPL transfer market in terms of trying to survive meant
that whilst they were very profitable, and wages dropped from £149 for every £100 of
income in the Championship to £53 in the EPL, their value of £312 million will have
plummeted in 2018 following relegation.
13: Bournemouth £344 million (2016 £143 million)
Bournemouth have been flying under the radar since promotion to the EPL.
The club has earned £124million of TV money, quadrupled their profits, and their wages
are under tight control with owners who lend interest free, meaning that AFCB can thrive
on gates of just 11,000.
12: Burnley £352 million (2016 n/a)
The Premier League’s best run club?
No frills in the boardroom or the dressing room meant that promoted Burnley made a substantial
profit.
They pay out just over half their income in wages and are debt free.
A formula for success in terms of value for a club on gates of 20,000.
Likely to be maintained in 2018 with a 7th place finish.
11: West Ham £368 million (£142 million)
West Ham’s value shot up mainly due to income rising far quicker than wages, and substantial
gains on player sales and debts being paid off after the controversial sale of the Boleyn.