Takeover Prospects

Economics Partnership

People buy football clubs for all kinds of reasons. Some do it for the passion of the sport or a deep-rooted love of the club. While others, those with an eye firmly on the financials, are looking for an investment opportunity.

While the commercial side of things is a major draw, owning a club can open the door to all kinds of prospects. In the money-rich era of the game, football is still as passionate as ever. Representing a club, the region and its fans is no small feat. Investing in a club means investing in its fanbase - and once you have them onside, the world is your oyster.

In the last five years, we've seen the likes of Leeds United, Southampton, and Newcastle United undergoing major takeovers. But what is it that makes them so appealing to potential investors?

Dr Rob Wilson

To find out we partnered with Dr Rob Wilson of Sheffield Hallam University, who specialises in the finance, economics, and governance of professional sports teams to study over 100 English and Scottish football clubs. Our research measures their potential viability for a potential investment or buyout considering financial viability, sporting merit, digital footprint, and local indices. Then we compare each club’s potential commercial proposition for a hypothetical buyer.

What Makes A Club A Suitable Investment

And To Who?

The suitability of an investment comes down to a variety of factors: what are its prospects, is there history, and is there room to grow?

The individuals or consortiums interested in buying sports teams cover a wide demographic. However, those who are able to make a purchase can vary depending on the stature of a club. The more prestige a football team has, the higher the fee. For clubs in Great Britain, the further up the pyramid you wish to enter, the price of admission rises exponentially.

Anyone looking to own a football club must all share one thing in common: they need to first demonstrate that they can afford to do so. From there, that’s where the similarities end. Whether purchasing as an individual or a group, what defines an owner is their medium-to-long-term strategies to match their ambition. Are they profit driven? Do they seek trophies and glories? Or are they looking to expand their enterprise onto the global stage?

These potential owners can be categorised into four distinct categories by their ownership model.

Fan Ownership

A unicorn. Fan led groups owning their favoured teams is a rarity. This has never been tested at the highest level in the UK, but the German 50+1 rule gets plenty of good press. That being said, fan stakes in clubs can be problematic when trying to push revenue growth and profit. See how Bayern Munich’s relationship with Qatar causes friction between the board and the club’s member fans – one to think about for potential investors.

Portsmouth FC are the only wholly fan owned side in the English Football League.

Profit Maximisers

Buyers in this category are typically associated with American ownership where revenue generation, as opposed to cost control, takes centre stage. These owners will look to run clubs efficiently so that they can extract long term value. This is the typical approach to remain competitive, without being the best in class.

Manchester United are the epitome of profit maximising ownership, with their current owners extracting significant value during their tenure.

Equity Fund

The new kid on the block, in football terms at least. Major funds and private equity investment is creeping into the buying game. Demonstrated with cost control, governance reform and revenue generation, these firms place business at the heart of their investment and will always have an exit plan in place to take their profits.

Burnley FC were recently acquired by ALK Capital, a US investment equity fund.

Foreign Ownership

Historically characterised by trophy asset hunters, investors in this category have deep pockets and will invest in teams to win regardless of the cost. This is more typical in overseas investments; these investors operate within financial regulations but tend to have significant pockets of cash. Such as Sovereign Wealth funds in the Middle East.

Manchester City and Newcastle United are prime examples of foreign ownership and wealth in the modern game.

Premier League

What It Is Worth?

An established Premier League club is worth more than its weight in gold. Broadcasting revenue is more than £2.3bn, with each club receiving at least £84m - in addition to a possible £44m as of the 2020/21 season depending on where your team finishes in the table. . Additionally, the EPL has the highest revenue of the five biggest European leagues at £5.13bn.

At the end of the 20/21 season, 20th placed Sheffield United received £91 million alone, for potential investors that kind of cash injection makes for an appetising proposition.

According to Deloittes’ Football Money League (2020/21 accounts), Leeds United became the 23rd richest side in the World – not bad for a team that had been outside the world’s richest league for 16 years, with an estimated investment of £100m from their current owners.

The Uk’s Most Investible Clubs

1
Arbroath
Scottish Championship
Digital Footprint Rank
2nd
Infrastructure Rank
1st
Utilisation Rank
4th
Financials Rank
35th
Total Score (Out Of 100)
94

Formed in 1878, 10th oldest side in Scotland, Arbroath represent the best potential investment opportunity out of the 114 clubs analysed in this model. Whilst seemingly on the periphery of Scotland’s footballing heritage, its circumstances represent an interesting proposition for a would-be owner; their degrading infrastructure and lack of stadium utilisation could offer steady returns if properly managed at a cut rate price.

2
Ayr United
Scottish Championship
Digital Footprint Rank
3rd
Infrastructure Rank
5th
Utilisation Rank
3rd
Financials Rank
52nd
Total Score (Out Of 100)
80

The Scottish Championship club manged to avoid relegation in the 2021-22 season, however The Honest Men have not seen the Scottish topflight since the 1977-78 season. An injection of cash could help to return the Ayr based side to their former glory. The club ranks in the top two teams for growth potential across both digital footprint and stadium utilisation, presenting would be buyers one of the strongest opportunities to make a potential return on investment.

3
Cheltenham Town
League 1
Digital Footprint Rank
25th
Infrastructure Rank
7th
Utilisation Rank
27th
Financials Rank
2nd
Total Score (Out Of 100)
74

Moving further south, League 1’s Cheltenham Town are club with one of the healthiest wages to turnover percentages in the entire pyramid, and a utilisation score that places them in the bottom 22% of clubs for stadium utilisation, suggesting that future revenues could rise further with the right strategy. Last season’s promotion shows a club on the rise, on and off the field.

4
Crawley Town
League 2
Digital Footprint Rank
30th
Infrastructure Rank
16th
Utilisation Rank
17th
Financials Rank
6th
Total Score (Out Of 100)
72

The West Sussex club 28 miles south of London, presents a strong investment profile, its financials according to its 2020 accounts demonstrate an account in rude health, while its infrastructure and utilisation factors illustrate a club that has a lot of room to grow. Recently acquired by investment group WAGMI United LLC who took a controlling share of the company, this investor will be looking upwards to capitalise on their recent acquisition.

5
Grimsby Town
League 2
Digital Footprint Rank
19th
Infrastructure Rank
2nd
Utilisation Rank
39th
Financials Rank
31st
Total Score (Out Of 100)
71

Despite falling into the National League, Grimsby Town boast of the biggest fanbases across both their present division and League 2. Their recent fall has not stopped a hardcore fanbase following their side up and down the country. Their present-day infrastructure requires a large upheaval, but a potential investor could use that

6
Stevenage
League 2
Digital Footprint Rank
23rd
Infrastructure Rank
26th
Utilisation Rank
18th
Financials Rank
4th
Total Score (Out Of 100)
71

Residing in League Two, and despite a lacklustre season, Stevenage represent an interesting investment opportunity compared to many of the sides in their division. Their revenues and wages to turnover percentages presented next to their potential commercial ceiling suggests that a reversal of on-pitch performances could lead to a sustained period of commercial growth. Their location and real-estate opportunities also make for an appetising prospect for investors.

7
Carlisle United
League 2
Digital Footprint Rank
34th
Infrastructure Rank
8th
Utilisation Rank
6th
Financials Rank
32nd
Total Score (Out Of 100)
70

The Cumbrian side has one of the biggest stadiums in the EFL League Two, but Brunton Park has fallen victim to flooding in 2005 and 2015, with the match-day car park flooding at least once per year resulting in costly damages. In 2011 plans were announced to move the team to a 12,000 capacity all-seater stadium, however these have yet to come into fruition. An investor with the resources and vision to execute a new stadium build could provide Carlisle with a much-needed boost and optimise the club’s expenditure and revenue.

8
Exeter City
League 1
Digital Footprint Rank
36th
Infrastructure Rank
18th
Utilisation Rank
42th
Financials Rank
3rd
Total Score (Out Of 100)
68

The only fan owned club to feature inside the top 10, Exeter FC have just gained promotion to League One after several seasons of falling short in the 21/22 season. They have slim finances, and shrewd player sales, after netting £4.5million for Ollie Watkins in 2017, as well as £1million plus deals from Matt Grimes, Ethan Ampadu and more. Exeter has a dedicated fan base and a thriving academy in a UK region that lacks elite sport clubs.

9
Swindon Town
League 2
Digital Footprint Rank
41st
Infrastructure Rank
21st
Utilisation Rank
28th
Financials Rank
9th
Total Score (Out Of 100)
68

At 126 years old, Swindon’s stadium is one of the oldest sites in English football, but the team suffers from a significant lack of utilisation, meaning there is an immediate opportunity to grow revenues in a region that lacks local teams higher up the footballing pyramid. The region itself ranks well in terms of deprivation indices, being predominantly affluent, a properly attuned fanbase could bring significant revenues for a would-be owner.

10
Livingston
Scottish Premier League
Digital Footprint Rank
8th
Infrastructure Rank
4th
Utilisation Rank
11th
Financials Rank
50th
Total Score (Out Of 100)
67

Livingston represent an attractive investment opportunity with the side already playing in the Scottish Premiership. The club has successfully maintained their topflight status since the 2018-19 season achieving some solid finishes along the way, with a 5th place finish in 2019-20 and 6th place finish the following season. For the club to take the next step and compete at the very top they need to make greater investments in the transfer window, with the club currently recruiting through free transfers. A new buyer with real purchase power could help take Livingston to the next level and capitalise on one of the league’s stable performers.

Infrastructure

Set Up & Condition

When buying a club, it's not just the name, shirt and crest you're getting. There's a web of infrastructure that needs to be utilised, maintained and sometimes upgraded. Physical elements, such as the stadium, training pitches and even the canteen need to be factored. As too does the corporate facilities and youth set-up. There are layers to each football club. Some are aging and simple community hubs, while others are complex super-networks featuring state-of-the-art sporting innovations.

A club with limited assets could be acquired for a significantly smaller investment than a side with world class facilities. Burnley’s Turf Moor may be steeped in history, but its upkeep costs and general condition at 139 years old could work against the club’s evaluation - especially after it was recently acquired by American Investment company ALK Capital.

A club can become more than its past glories. Manchester City’s Etihad campus is a modern marvel of investment with over £700m invested since 2008. The vast complex is the envy of not just the Premier League, but the global footballing elite - a centre of excellence. At the time of purchase, prior to investment into Manchester’s Eastlands, Manchester City was bought for £81.6m. The club itself is valued at more than £4bn, with much of that estimated value coming from the continued enhancements to facilities and infrastructure.

Adjust the weighted ranking values as you see fit

Total:
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Team
League
Capacity
Stadium Age
Stadium Condition
Training Facilities
Youth Facilities
Youth Recruitment
Corporate Facilities
Transport Links
Total Score (out of 100)
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Audience

Utilisation

Maximising your audience is a primary indicator of commercial and domestic success when it comes to UK football clubs. Throughout the football pyramid, three out of five sides utilise more than 50% of their stadium over the course of a season.

For sides outside the EPL, match day revenues are a significant driver of commercial revenues, and the lifeblood for many sides. The graph below demonstrates how underutilised the stadium facilities are in the divisions below the Premier League. For prospective buyers, this underutilisation could be an attractive prospect. Winning the loyalty of the local fanbases with on-the-field successes and shrewd investment could lead to significant returns from matchday spend alone.

There are many notable clubs throughout the football league who boast huge stadiums, but fail to capitalise on their capacity, through either mismanagement or failed endeavours. Sunderland, for example, had almost 40% of their stadium unutilised in League 1. The Stadium of Light has a capacity of 49,000 and their unceremonious fall from the Premier League has seen some of their fans and commercials fall away.

Those owners who are able to turn a disenfranchised fanbase into avid followers will reap the benefits. From winning performances on the pitch and savvy commercial optimisation off it, owners will see huge gains commercially. The likes of TV rights, advertising and competition revenue will all likely follow. While they'll also be able to grow additional revenue streams as a result of new and long-standing fans alike.

Capacity stadiums, alongside fan engagement and satisfaction, should be core, short and long term aims of any prospective owner.

63.2% use more than 50% of their stadium 35.1% use more than 70% of their stadium 26.3% use more than 85% of their stadium

Utilisation vs Ticket Cost

The following chart illustrates how median ticket cost compares against with the average stadium utilisation of clubs through England and Scotland.

The overall trend illustrates how those teams at the top of the football pyramid, or those that are generally known as significant historical clubs, generally boast strong utilisation and a higher median ticket cost.

Lower down the footballing pyramid, both of these variables show a declining trend as, utilisation drops significantly, which shows that grounds or a lack of fan interest is prevalent. This combined with falling ticket prices paints a picture of clubs that are failing to capitalise on their revenue potentials. Potentials that a would-be investor would highlight as a significant growth opportunity – especially if the stadium itself is of significant size and stature.

Capacity
74,879
60,000
40,000
20,000
3,100
League
Premier League
Championship
League 1
League 2
Scottish Premiership
Scottish Championship

Stadium Capacity vs Attendance

The following bar chart shows how clubs in each league compared for the 2020/21 season, before the disruption of the global COVID19 pandemic. This table reinforces the concept of underutilisation and how this shifts remarkably depending on the league’s stature.

Key
Capacity
Average Attendance
Birmingham City
Blackburn Rovers
Blackpool
Bristol City
Burnley
Cardiff City
Coventry City
Huddersfield Town
Hull City
Luton Town
Middlesbrough
Millwall
Norwich City
Preston North End
Queens Park Rangers
Reading
Rotherham United
Sheffield United
Stoke City
Sunderland
Swansea City
Watford
West Bromwich Albion
Wigan Athletic
Arsenal
Aston Villa
Bournemouth
Brentford
Brighton & Hove Albion
Chelsea
Crystal Palace
Everton
Fulham
Leeds United
Leicester City
Liverpool
Manchester City
Manchester United
Newcastle United
Nottingham Forest
Southampton
Tottenham Hotspur
West Ham United
Wolverhampton Wanderers
Accrington Stanley
Barnsley
Bolton Wanderers
Bristol Rovers
Burton Albion
Cambridge United
Charlton Athletic
Cheltenham Town
Derby County
Exeter City
Fleetwood Town
Forest Green Rovers
Ipswich Town
Lincoln City
Milton Keynes Dons
Morecambe
Oxford United
Peterborough United
Plymouth Argyle
Port Vale
Portsmouth
Sheffield Wednesday
Shrewsbury Town
Wycombe Wanderers
AFC Wimbledon
Bradford City
Carlisle United
Colchester United
Crawley Town
Crewe Alexandra
Doncaster Rovers
Gillingham
Grimsby Town
Leyton Orient
Mansfield Town
Newport County
Northampton Town
Oldham Athletic
Rochdale
Salford City
Scunthorpe United
Stevenage
Swindon Town
Tranmere Rovers
Walsall
Arbroath
Ayr United
Dundee
Greenock Morton
Hamilton Academical
Inverness Caledonian Thistle
Partick Thistle
Aberdeen
Celtic
Dundee United
Hearts
Hibernian
Kilmarnock
Livingston
Motherwell
Rangers
Ross County
St Johnstone
St Mirren
0K
5K
10K
15K
20K
25K
30K
35K
40K
45K
50K
55K
60K
65K
70K

Digital Footprint

Set Up & Condition

Online visibility is seen as new market capital for many executives. Positioning your brand at the forefront of the digital world means that your brand is seen by millions of potential fans, and therefore customers, all over the world.

Manchester United command the lion’s share of digital traffic when you consider their social followings, the growing profiles of their international playing talents and global search trends. However, that does not mean that other teams cannot compete in their space, with many sides finding their voice - and new fans - in far-flung corners of the world. Yet through the means of Twitter, Facebook, TikTok, and the multitude of other social platforms, those distant fans feel part of a club’s culture. Even if they cannot physically be at their team’s stadium.

Leicester City, for example, have found a dedicated following in Thailand due to the domestic relations of their ownership. Similarly, Tottenham have seen huge growth in South Korea thanks to their poster boy Son Heung-Min. Even without direct commercial connections, or elite international talent, clubs are continually finding new ways of connecting with potential fans the world over.

This growth is only enhanced by the behemoth Premier League TV rights deals and its partnerships that span across North America, the Middle East and Africa. Every deal represents significant commercial potential for investors, even if their potential UK-based investment does not have the same clout as an historically important side.

Search Data for Each Division Across 5 Global Regions

See how each UK side’s digital footprint compares league to league by searches around the world.

Africa

Europe

North America

South America

Asia

Middle East

Social Followings by Division on Facebook and Twitter Platforms

Explore how the social profiles compare within each division across Facebook and Twitter. Traditionally successful and historic clubs dominate the profile of the Premier League, and similar trends repeat themselves when exploring the lower parts of the football pyramid. Sunderland being the largest outlier when comparing themselves to peers in their division.

Financials

Balance Sheet Comparison

The below chart illustrates the suitability of clubs as investments as part of their respected values, those colour-coded red represent clubs ranked with lower investment suitability as part of the model, while those colour-coded amber through to green represent more suitable investments commercially.

Club Valuation Rankings 2018-2020

The Markham Multivariable model was the first football finances model developed to carry out the valuation of football clubs. Developed by Tom Markham in 2013, this model’s underlying principle is to recognise and measure a franchisee’s ability to make money in the future and determine a present-day valuation from that ability.

That revenue generation capacity Is dependent on three factors:

  1. League: including its revenue streams and salary caps
  2. Stadium: its capacity, advertising, sponsorship, and corporate facilities
  3. Market: cooperate presence and demographic catchment areas

The calculation is as follows:

Club value = (Revenue + Net Assets) * [(Net Profit + Revenue) / Revenue] * (% stadium filled) / (%wage ratio)

Using this model, data sourced from club accounts on Companies House and Delottie’s annual review of football finance, the 114 clubs analysed as part of this study are clustered into valuation groups that reflect their current value, based on the assets and revenue streams presently available to them.

Some club values have been determined by balance sheet valuations, in these instances, this is typically due to having revenue streams or accounts that are too small, meaning that a club isn’t obliged to publish their full accounts.

Within each cluster, the most attractive clubs for investment are illustrated by their green to yellow colour-coding, which is determined by the overall model and then enclosed within the various valuation clusters.

Burnley for example, recently taken over by ALK Capital for an estimated £170 million shows itself as a shewed investment based on their potential future revenue streams provided their stay in the Premier League continues.

Master Table

Below you can find the club investment table. For each category teams are scored based on their potential for growth and expansion in that area.

Team
League
Digital Footprint Rank
Infrastructure Rank
Utilisation Rank
Financials Rank
Total Score (out of 100)
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Sources

Companies House
ClubELO
CIES Football Institute
Deloitte Annual Review of Football Finance 2021
English Indices of Deprivation (gov.uk)
Facebook
Football Manager 2022
Google Search Console
House of Commons Library
Markham Multivariate Model
Office for National Statistics UK Census
Twitter
Scottish Index of Multiple Deprivation 2020
All EPL, EFL, League One, League Two, SPL, Scottish Championship club websites