The Player Trading Game 2017

footballbenchmark.com What is KPMG Football Benchmark?

Consolidated and veriﬁed database of football clubs' ﬁnancial and operational performance.

Business intelligence tool enabling relevant comparisons with competitors.

An ever-growing platform that includes data from over 150 European football clubs.

A tool offering insights into many aspects of football clubs' operations, including, but not limited to, revenue generators, expense categories, proﬁtability indicators, balance sheet items and stadium statistics.

footballbenchmark.com

Credits: Paris Saint-Germain FC

Foreword 4

How we calculate player trading balance for the purposes of this report 7

The European Top 20 8

Where are the “big fish”? 13

Basis of preparation and limiting conditions 15

Only one year ago, the whole media and fans, it is noticeable that football world was stunned when the ratio between the fee paid for Manchester United FC broke record transfers and the operating the transfer record by signing revenues of the acquiring club has Frenchman Paul Pogba for EUR 105 remained stable at approximately million. Despite being considered 23% in the last 10 years. In view of by many as a disproportionate and that, Neymar’s acquisition by Paris unsustainable trend, this summer Saint-Germain FC (at 42%) could we have witnessed a further pull be considered as an exception, of the fnancial muscle exercised and more aligned to the ratio at the by clubs. The “Neymar effect”, turn of the century when Figo and i.e. the flamboyant Brazilian striker Zidane moved to Real Madrid CF leaving FC Barcelona for EUR 222 from FC Barcelona and Juventus FC. million upon payment by Paris Saint- Germain FC of his release clause, The obvious questions raised from Andrea Sartori continued a domino effect across such an analysis are: Is Neymar Partner the entire transfer window. Indeed, worth EUR 222 million? Can the KPMG Global Head of Sports put under pressure to replace their estimated overall investment of [email protected] star, the Blaugrana signed Ousmane approximately EUR 500 million Dembélé for a reported EUR 1051 produce a reasonable return? From million (plus add-ons). If we also a strictly fnancial perspective, consider the further incursion in when looking at the benefts the transfer window made by Les obtained from additional stadium Parisiens with the acquisition of and broadcasting revenues, as well French talent Kylian Mbappé, on as the increased chances of winning loan with the option of a permanent the UEFA Champions League, transfer next year for around EUR the answer would most likely be 180 million, then three players have negative. However, Neymar — an already surpassed the price tag of iconic player with massive brand Pogba, after only one season. value — can provide PSG with a unique international brand exposure These transfer fgures have made and the opportunity to grow their pundits turn up their noses, already high commercial revenues questioning whether such profligacy even further. Neymar is indeed part is actually sustainable in the long- of a broader commercial and brand term and wondering how much exploitation strategy involving PSG, former football legends such as, for as well as the State of Qatar, host instance, Luís Figo, Zinedine Zidane of the 2022 FIFA World Cup, that or Ronaldo would cost nowadays should not be overlooked when as they were reportedly transferred assessing the commerciality of the for EUR 60, EUR 73.5 and EUR acquisition of the Brazilian star. 28 million, respectively, when the Portuguese and French footballers For the biggest European football moved, in different seasons, to clubs, which are intrinsically Real Madrid CF and Ronaldo joined part of the global entertainment FC Internazionale. However, while industry, increasing commercial increasing transfer fees continue revenues is an absolute must to to command the attention of the ensure a competitive advantage

1 For the purposes of this report, we have not included add-ons related to transfer fees.

Most expensive transfers by year in the last 10 seasons and transfer fee to operating revenues ratio

Player Selling/ Transfer buying clubs fee (EUR m) Luís Figo 2000 Barcelona / R. Madrid 60

Zinedine Zidane 2001 Juventus / R. Madrid 74

Robinho 2008 R. Madrid / Man. City 43 Cristiano Ronaldo 2009 Man. Utd. / R. Madrid 94 David Villa 2010 Valencia / Barcelona 40 Fernando Torres 2011 Liverpool / Chelsea 59

Thiago Silva 2012 Milan / PSG 42

Gareth Bale 2013 Tottenham / R. Madrid 101

Luis Suárez 2014 Liverpool / Barcelona 82

Kevin De Bruyne 2015 Wolfsburg / Man. City 74

Paul Pogba 2016 Juventus / Man. Utd. 105

Neymar 2017 Barcelona / PSG* 222

0% 10% 20% 30% 40% 50%

Source: KPMG Football Benchmark research, www.transfermarkt.com *based on 2015/16 operating revenues

against their peers. On the other than 150 clubs. Thus, it is important league in our report, with six hand, smaller clubs, with lower to note that this analysis does not clubs. international brand appeal, need to consider the latest transfers to focus on growing in-house talents be accounted in the 2016/17 and No English clubs are represented in and scouting young and promising 2017/18 seasons. the Top 20. footballers to be sold one day at a premium, as a way to ensure their Some of the most striking fndings of As transfer fees continue to increase, continuous success. our research are: “net sellers” maintaining prolifc academies and successful scouting Whilst media are attracted by The 20 clubs highlighted in this networks might be in the position the lavish spending on the “big report, which we can consider to further exploit this competitive stars”, in this frst edition of “net sellers”, come from fve advantage. “The Player Trading Game”, an different leagues: France, Italy, analysis undertaken by the Football Spain, Portugal and Germany. If you would like to receive Benchmark team of KPMG's Sports further information or discuss Advisory Practice, we review the Portuguese clubs are not our fndings, please contact us at best performing clubs in Europe in just the only non-“big fve” footballbenchmark.com. terms of player trading results. representatives in the top 20, but also lead the ranking with SL The foundation of this report is an Benfca (1st) and FC Porto (2nd). analysis of the publicly available fnancial statements of the two Underlining French academies football seasons 2014/15 and reputation as talent factories, 2015/16 from a selection of more Ligue 1 is the most represented

Credits: FC Porto

Football players constitute the key this case, the loanee acquires the which is recognised as an expense asset of the majority of football clubs rights of the player only for a pre- in the Statement of Proft and Loss. and transactions of players represent established timeframe and expenses Possible reasons for impairment, for a regular activity of any club. It should the cost of such loan in the Statement individual players or for the squad be highlighted that there is not a of Proft and Loss, while the loaner considered as a whole can be, among commonly-accepted methodology records the revenue associated to others: to report and account for a club’s it. Usually, loan activities represent a player trading result. Indeed, in relatively low amount in the overall Career-threatening injury; different countries and sometimes player trading activities. within the same league, differences Early termination of contract; exist. This methodological section But how are players developed explains how player trading can internally, through clubs' academies Long-term sanctions. be calculated and how, for the or youth teams, accounted for in purposes of this report, KPMG the books of a football club? Players has determined the annual player coming from a club's own academy are Player Trading balance trading balance. either not capitalised within intangible assets or capitalised at a low gross As a result of these activities, we Acquisition of players' rights book value, usually representing agent can summarise the player trading The acquisition of players can fees/bonuses paid at the signing of the balance in four main operations: occur through the execution of frst professional contract, if any. a) (+/-) Proft/Loss on disposal of an agreement (a contract) with players a footballer who has an already Disposal of players’ rights existing contractual relation in force Once a player is sold, the outcome b) (-) Amortisation with another club. In this case, the for the seller can be twofold: a proft c) (+/-) Revenues/costs gross book value of the players’ occurs when the transfer fee paid by associated to loaned players registrations, to be recorded in the the buyer is higher than the player’s Statement of Financial Position carrying amount at the moment of the d) (-) Impairment among intangible assets, is equal to disposal, while a loss occurs when the sum paid by the buyer for the such transfer fee is lower than the acquisition of such rights, increased net book value at the moment of the = Player trading balance by the costs directly attributable to disposal. the arrangement (usually, agent fees). A positive balance of player Amortisation trading is mainly the result of The complete acquisition of players As for most assets, players’ profts from transfers exceeding can also take place through the registrations must be amortised. the annual amortisation of the signing of a contract directly with a The generally-applied accounting squad; as such, clubs in such “free player”, upon the expiration practice for amortisation among position can be considered, for of a similar agreement between football clubs is the straight-line simplification purposes, “net the same and another club. In this method; the amortisation relevant to sellers”. On the other hand, a case, the buying club does not pay single periods must be recognised as negative final balance is mainly any money to the club which the an expense in the Statement of Proft the result of the investment clubs footballer last played for and the and Loss over the duration of the have committed to enhance gross book value of the players’ contract agreed with the player. their squad, represented by registrations depends on the agent amortisation exceeding the profts fees/bonuses paid at the signing of Impairment from transfers; those clubs the contract, if any. Furthermore, it is also necessary can rather be considered, for to verify the existence of potential simplification purposes, “net Finally, the acquisition of a player’s impairment (i.e. permanent loss of buyers”. right can happen through a loan; in value) for the players’ registrations, © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 8 The Player Trading Game The European Top 20

The 20 clubs highlighted in this report Top 20 clubs by player trading, 2014/15 – 2015/16 (EUR m) come from fve different leagues: France (six), Italy (fve), Spain (four), Portugal (three) and Germany (two) No. Club 2-seasons Player trading/ interestingly, no English clubs are total player operating revenues represented. It also comes as a bit trading of a surprise that Dutch clubs, which have often produced an abundance of talent, are missing from our ranking. 1. SL Benfica 65.0 29% 2. FC Porto 58.2 34% The clubs ranked in our report usually beneft from elite academies 3. FC Schalke 04 56.3 13% and excellent scouting networks, Olympique de with their business models based 4. 47.6 22% on nurturing talent and generating Marseille signifcant profts on the disposal of 5. AS Monaco FC 43.1 22% players, which is not only important to balance the books but also to 6. Sevilla FC 39.6 19% close the gap with domestic or European competitors. 7. Málaga CF 37.7 40% Olympique 8. 35.4 Lyonnais 14% 9. LOSC Lille 32.8 25%

10. UC Sampdoria 28.7 27% Real Sociedad de 11. 26.9 Fútbol 26% Top 20 clubs by player trading by country, 2014/15 – 2015/16 12. Genoa CFC 25.9 23% 13. Villarreal CF 25.3 19% 6 TSG 1899 14. 24.0 Hoffenheim 17% 5 15. Udinese Calcio 19.4 20% 16 AS Saint-Étienne 18.5 16% 4 17. Montpellier HSC 17.3 21% 3 18. Atalanta BC 17.2 17% 19. Empoli FC 16.5 26% Sporting Clube 20. 16.3 2 de Portugal 13%

Source: KPMG Football Benchmark Source: KPMG Football Benchmark

Portugal maintain domestic and European on the disposal of Marcos Rojo to The “European Top 20” is led by two success, home-grown talents often Manchester United FC for EUR 20 of the three Portuguese giants, SL exit early, with Sanches being a million. Moreover, in the Portuguese Benfca and FC Porto, with Sporting prime example. Having completed victory at Euro 2016, 10 of the 24 Clube de Portugal in 20th place. The just one season of senior Primeira players part of the squad came three clubs combined have sold Liga action, the academy graduate through Sporting Clube de Portugal’s almost EUR 1 billion of talent over was sold at the age of just 19. academy, Cristiano Ronaldo being the past six years to clubs from other the biggest name. In the past, the countries. While these clubs have a Under president Pinto da Costa, club also nurtured Portuguese remarkable scouting network, and FC Porto have earned a reputation luminaries such as Paulo Futre, Luís the laws regarding work permits for an extremely astute transfer Figo and Nani. in Portugal are more relaxed than policy, which has seen them in other European countries, the almost continually acquire talents at Germany widely-spread use of Third Party reasonable prices. Colombian striker FC Schalke 04 and TSG 1899 Ownership, a practice now restricted Jackson Martinez, Brazilian full backs Hoffenheim, the only German by FIFA regulations, has impacted Danilo and Alex Sandro as well as presence in our ranking, demonstrate their player trading balance. French central defender Eliaquim how player trading can assist in Mangala are the most notable cases ensuring the long-term sustainability SL Benfica have profted from in the last two seasons, accruing of the business, with some profts a world-renowned academy of a player trading balance of EUR from player disposal reserved to excellence, and have been at the 58.2 million. However, their high strengthen the clubs’ equity position. forefront of player development for dependence on player trading The Gelsenkirchen side sit in third many years. In the two seasons activity is evident from the fact that place among player traders, with under analysis, the club reported its impact on operating revenues is a total balance of EUR 56.3 million, a player trading balance of EUR 34%, the second highest following while TSG 1899 Hoffenheim (14th) 65 million, some 30% of their total Málaga CF (at 40%). totalled EUR 24 million in player operating revenues, mainly due to trading in the past two seasons. the transfers of Renato Sanches to In contrast to SL Benfca and FC FC Bayern München (approx. EUR Porto, Sporting CP have not lifted FC Schalke 04 have a recent history 35 million) and Nicolás Gaitán, Enzo the domestic league title since of signifcant market activity, such Perez and Lazar Marković for EUR 25 2001/02. However, at EUR 15.4 as Julian Draxler’s sale to VFL million apiece. While this business million, they are 20th in our Wolfsburg for a reported EUR 43 model has allowed the Águias to ranking, capitalising most recently million and the transfer of Leroy Sané to Manchester City FC for EUR 50 million. Moreover, the club have the highest operating revenues among the 20 clubs in our ranking, displayed by a player trading/operating revenues ratio of only 13%, the lowest among our ranking. However, in the last two seasons their on-pitch results have deteriorated, indicating that replacement players have not been able to perform to the level of their predecessors.

France At the foot of the player trading podium are two rivals, Olympique de Marseille and AS Monaco FC. These clubs, along with Olympique Lyonnais, Montpellier HSC, AS Saint- Etienne and LOSC Lille, make French Ligue 1 the most represented league in our report, with six clubs. This comes as no surprise, as France has Credits: SL Benfica well-known academies producing a large pool of talent.

Whilst former owner Margarita a number of high profle players, found it diffcult to compete against the Louis-Dreyfus was looking for new including the Colombian duo of signifcant fnancial strength of local investors to take over the club, fnancial playmaker James Rodriguez and striker rivals, especially Paris Saint-Germain constraints forced OM to leverage Radamel Falcao. FC. As a result, OL have been forced to player trading in recent seasons— sell players in order to generate enough totalling EUR 47.6 in the period However, in recent seasons, the club resources. In the interval examined, under review. Players like Dimitri adopted a more cautious strategy, the club totalled EUR 35.4 million Payet, Giannelli Imbula and Florian building a squad of less expensive in player trading, mainly attributable Thauvin were sold to West Ham players and easing fnancial pressures to the net profts on the disposal of United FC, FC Porto and Newcastle with two of the highest transfers taking two of their recent, best home-grown United FC, respectively, while on-pitch place in the period under study, namely talents, namely French defender results were inconsistent, with no James Rodriguez to Real Madrid CF Samuel Umtiti (to FC Barcelona, EUR UEFA Champions League participation (EUR 75 million) and Anthony Martial 25 million) and Cameroonian striker since 2013/14. However, following the to Manchester United (EUR 60 Clinton N’Jie (to Tottenham Hotspur acquisition by American businessman million). Both transfers considerably FC, EUR 13 million). Frank McCourt taking over during the impacted the total player trading 2016/17 season, fans’ expectations balance of EUR 43.1 million. AS Saint-Etienne, the most have grown accordingly thanks to the Following a successful domestic and decorated French side (10 league arrival to the club of French nationals European campaign this year, and the titles), accumulated EUR 18.5 Patrice Evra, Adil Rami and the return subsequent tansfer of Kylian Mbappé, million in player trading, of local hero Dimitri Payet. Tiémoué Bakayoko, Benjamin Mendy while LOSC Lille, who were last and Bernardo Silva this summer, champions in 2010/11, totalled AS Monaco FC also went through the club are likely to maintain a high EUR 32.8 million. LOSC Lille’s new a change of ownership in 2011, with position in next seasons’ player trading owner Gérard Lopez has openly Russian billionaire Dmitry Rybolovlev ranking. announced that the club will adopt taking over the club, then in Ligue 2. an entertaining style of football and After a swift return to the French top- Olympique Lyonnais, holding a record focus on the valorisation of young flight,Les Monegásques established of seven consecutive domestic titles talent. With Marcelo Bielsa on the themselves among the top spenders (2001/02-2007/08) and possessing one bench, they will be an interesting club in Europe, with the acquisition of of the best academies in France, have to watch.

No Premier League clubs Top 10 premier League clubs by total player trading, in the top 20? 2014/15 – 2015/16 (EUR m)

Possibly unsurprisingly, no English No. Club 2-seasons total clubs are included in the “European player trading Top 20”. This is likely attributable to 1. Southampton FC 6.7 the profle and sizeable broadcasting income of the Premier League 2. Swansea City AFC -11.9 and the greater means they enjoy compared to many of their European 3. Stoke City FC -18.6 counterparts. Such features rather 4. Leicester City FC -19.2 place them on the “buy side” of the market and to some extent remove 5. West Bromwich Albion FC -26.0 the necessity to leverage player 6. Crystal Palace FC -29.6 trading activity. 7. Tottenham Hotspur FC -32.8 Southampton FC are the only 8. Newcastle United FC -38.0 Premier League club recording a positive player trading balance in the 9. Aston Villa FC -39.7 period under analysis, partially the 10. Everton FC - 41.1 result of proftable transfers from their very prolifc academy, such as Luke Shaw or Calum Chambers. Source: KPMG Football Benchmark

Highest transfer fees paid in the seasons under review (EUR m) Year 2014/15

James Rodríguez 75

Julian Draxler 43

Geoffrey Kondogbia 36

Jackson Martinez 35 Manchester United FC Danilo 32 Liverpool FC Manchester City FC VFL Wolfsburg Antoine Griezmann 30

Year 2015/16 FC Bayern München Anthony Martial 60

Leroy Sané 50 FC Internazionale Roberto Firmino 41 AC Milan Eric Bailly 38

Renato Sanches 35

Carlos Bacca 30 Real Madrid CF Atlético de Madrid

Source: Clubs’ ofﬁcial ﬁnancial statements; www.transfermarkt.com Note: Figures do not include add-ons related to transfer fees

Spain became unsustainable and, in recent level of expenditure among LaLiga clubs Sevilla FC are the leading Spanish seasons, the club’s approach to player in total staff costs for their academy in side in terms of player trading trading has been more cautious. the two years under consideration. activities, with a total of almost Partially due to overall modest EUR 40 million. Fostered by Ramón income streams, the ratio of player Italy Rodriguez Verdejo’s (“Monchi”) trading on operating revenues, at With fve clubs in the ranking, business acumen, the club’s sporting 40%, is the highest among the clubs Italian Serie A is the second most- director who has now joined AS under review. represented league in our report. Once Roma, Los Sevillistas have developed considered by many as the best league as transfer market experts, as Usually battling against the likes of in the world, Serie A has lost some of demonstrated by the sales of Ivan Spanish giants FC Barcelona and Real its glamour as it is now considered by Rakitić FC Barcelona and Carlos Bacca Madrid CF in youth tournaments, both many players a career crossing point to AC Milan during the two seasons Real Sociedad and Villarreal CF have rather than the summit of European under analysis. The club’s smart also benefted from strong academies. football. spending has reaped rewards in the In 2010 Real Sociedad returned to form of on-pitch success, notably frst division with a team built around UC Sampdoria lead the Italian three consecutive UEFA Europa academy players that, over time, have clubs with a player trading balance League trophies between 2013/14 and been sold – notable examples being totalling EUR 28.7 million in the 2015/16. Antoine Griezmann (EUR 30 million past two seasons. Such activity has to Atlético de Madrid) in 2014/15 and, helped mitigate yearly losses, and the Following the arrival of the current outside of the scope of this report, Asier modest overall income streams make Middle East owners, Málaga CF Illarramendi (EUR 32 million to Real the player trading/operating revenues adopted an aggressive market strategy, Madrid CF) in 2013. On the other hand, ratio, at 27%, the highest among acquiring established talents that the relevance of Villarreal CF’s academy Italian clubs. City rivals Genoa CFC allowed the club to reach the Quarter- is reflected in the fact that aside from follow with a total EUR 25.9 million fnals of the UEFA Champions League FC Barcelona, Real Madrid CF and and a 26% ratio. After a number of in 2012/13. However, this model soon Valencia CF, the club have the highest seasons of investment in the squad © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 12 The Player Trading Game

with the notable acquisitions of, among Champions League participation By contrast, Atalanta BC have built others, Thiago Motta, Luca Toni (2005/06) and elimination in the one of the best academies in Europe and Hernán Crespo, the club did not competition’s play-off stage in and have maintained frst division break into the upper echelons of the 2011/12 and 2012/13, the players football since the 2006/07 season. league and adopted a less aggressive brought in to replace those sold In the past two campaigns, the club investment approach, as evidenced to some of the best clubs in have aggregated EUR 17.2 million by the signifcant profts on players Europe (e.g. Alexis Sanchez to FC in player trading and, at the end of and the constant diminution in squad Barcelona, Samir Handanović to the 2016/17 season, qualifed for the amortisation. FC Internazionale) did not live up UEFA Europa League, which will be to expectations. Although the club their frst European participation since Udinese Calcio is known for having slipped behind in the domestic 1990/91. Considering the valorisation one of the best scouting networks league, failed to qualify for European of young talents already sold at a in Europe. The “buy cheap and sell competition and fought against premium to bigger clubs, it is likely high” business model, also fostered relegation in the past two seasons, that Atalanta BC will see further by the multi-ownership structure of their player trading balance improvement in the player trading the Pozzo family, with Watford FC and reached EUR 19.4 million, with balance for the upcoming years. Granada CF (now disposed of), paid Argentinian midfelder Roberto Finally, Empoli FC complete the signifcant dividends. After a “golden Pereyra, transferred to Juventus FC, Italian teams ranked in our report with age”, including the club’s frst UEFA being one of their main disposals. EUR 16.5 million in player trading.

How would “The European Top 20” look by broadening our scope to three football seasons?

A club’s player trading balance over their leading position, with the other sale of Gareth Bale to Real Madrid two seasons can be heavily impacted Portuguese giants FC Porto dropping CF for a reported EUR 100 million, by a single transfer. Therefore, in order to 5th, while Sevilla FC, Real Sociedad while Torino FC would capitalise to attain a broader scope of the topic, de Fútbol and LOSC Lille move ahead on the net profts from the disposal as part of the report we have also of FC Schalke 04, Olympique de of Ciro Immobile (for EUR 13.8 taken a look at which teams would Marseille and AS Monaco FC. million to Borussia Dortmund) and sit among the top fve European Alessio Cerci (for EUR 11.6 million performers if three seasons are taken There is also a small group of clubs to Atlético de Madrid). Furthermore, into account, thus reducing the impact that would join the “European Top AFC Ajax would represent the only of a single deal upon our ranking. 20” according to player trading when incursion into the ranking by Dutch considering the past three seasons. clubs, in 12th place, mostly thanks Reviewing the past three seasons Among those, Tottenham Hotspur to the disposal of Danish playmaker (2013/14 – 2015/16), it is interesting to FC would climb to 7th position Christian Eriksen to Tottenham observe that SL Benfca have retained thanks to the one-time world record Hotspur FC.

Top 5 clubs by player trading, 2013/14 – 2015/16 (EUR m) 103

57 57 56 55 34 19 19 19 18

Real Sociedad SL Benﬁca (=) Sevilla FC (+4) LOSC Lille (+4) FC Porto (-3) de Fútbol (+7) 3-seasons total 3-seasons average Source: KPMG Football Benchmark © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The Player Trading Game 13 Where are the “big fish”?

Top 15 clubs by EV by player trading, 2014/15 – 2015/16 (EUR m)

No. Club (EV ranking) 2-seasons Player trading/operating revenues total player trading >50 million

1. FC Schalke 04 (14) 56.3 13%

2. Borussia Dortmund (12) 10.0 2%

3. Atlético de Madrid (13) -2.3 -1%

4. Tottenham Hotspur FC (10) -32.8 -6%

5. FC Barcelona (3) - 44.1 -4% <50–100 million>

6. Liverpool FC (8) -50.4 -6%

7. FC Bayern München (4) -60.9 -6%

8. Chelsea FC (7) - 65.1 -8%

9. Juventus FC (9) -73.0 -11%

10. AC Milan (15) - 86.1 -20% <100 million

11. Arsenal FC (6) -105.7 -12%

12. Real Madrid CF (2) -125.7 -11%

13. Manchester City FC (5) -171.9 -17%

14. Paris Saint-Germain FC (11) -179.4 -18%

15. Manchester United FC (1) -238.9 -20%

Source: KPMG Football Benchmark; KPMG “Football Clubs’ Valuation: The European Elite 2017”;

In general, the best performing FC Schalke 04 and German stable- Enjoying the highest share of clubs in terms of player trading mates Borussia Dortmund are success both domestically and are not the European superpowers. the only clubs with a positive internationally, and generally If we take a look at the Top 15 clubs player trading balance in the beneftting from more lucrative by Enterprise Value as reported in past two seasons. In case of the commercial and broadcasting deals, KPMG’s “Football Clubs’ Valuation: Dortmund side this is mostly due major European clubs can afford to The European Elite 2017”, we can to the departures of centre-back spend to attract the best players on see that these clubs are, generally, Mats Hummels to local rivals FC the market, and have less need to “net buyers” rather than “net Bayern München (EUR 35 million) leverage on player trading activity. sellers”. and midfelder Ilkay Gündogan to However, some differences still exist Manchester City FC (EUR 27 million). among these teams.

Atlético de Madrid and Tottenham The last fve positions represent Hotspur FC, for instance, are the clubs that have invested most examples of clubs consistently trying in building their squads (exhibiting to compete against the historical negative player trading balance of at superpowers and consequently least EUR 100m) in the two seasons only show a modestly negative under analysis. Unsurprisingly, player trading balance in the broader three clubs come from the Premier scope, as their strategy involves League, the most remunerative the occasional disposal of talents. football league in the world. Meanwhile, FC Barcelona, despite Manchester United FC (-EUR 239 attracting some of the big names million) underwent huge investment on the market, can count on one after the end of the Alex Ferguson of the best academies in football, era, although with moderate on- from which valuable players can be pitch results in the two seasons promoted to the frst team or even under review; the acquisitions of sold at a premium. Anthony Martial and Eric Bailly are two prominent examples. In this The group of clubs between group, which also includes Arsenal Liverpool and AC Milan (whose FC, Manchester City FC and Paris negative player trading balance Saint-Germain FC can be classifed lies between EUR 50 million and as “newcomers” in the European 100 million, respectively) could be elite, capable of attracting some of considered a middle ranking cluster. the biggest names in order to break In this group the presence of FC into the upper echelons of European Bayern München is also notable, football. as they usually attract talent from local competitors, often available at This summer, Manchester City FC, a reasonable price. Following the Manchester United FC and Paris arrival of new ownership, AC Milan Saint-Germain FC, after the eye- have also invested signifcantly to catching signings of Neymar and strengthen their squad, including other star players, once again appear the arrivals of Leonardo Bonucci to be among the most active clubs from Juventus FC and André Silva in the market and will likely remain at from FC Porto, and are candidates to the bottom of the table next season. remain at the bottom of this group in forthcoming analyses.

Credits: FC Schalke 04

Credits: Neil J.

Basis of study preparation and limitations

The foundation of this study is an fnancial fgures from their two latest to render the analysis between analysis of the publicly available publicly available fnancial statements. professional football clubs consistent statutory fnancial statements and comparable, in undertaking this ("the Financial Statements") of the The Financial Statements utilised for research we faced several challenges professional football clubs selected for the purpose of KPMG's analysis were which are diffcult to overcome. the purposes of this report, through the acquired either from the relevant Differences of accounting practice in following criteria: public sources in each country or the respective countries, differences other public sources (for example a in reporting currencies, fluctuation in – Availability of Financial Statements club’s offcial website). As far as the exchange rates2, and differences in at the date of publication; team responsible for the production year-ends limit to a certain extent the of this report is aware, the Financial comparability of data and affect the – Participation in frst division Statements for each professional outcome of our analysis. football. football club have been prepared on the basis of the accounting regulations and KPMG's Sports Advisory Practice In respect of each professional football principles in their respective country makes no representations nor provides club, all fnancial fgures have been or in compliance with International any warranties regarding the accuracy extracted from the Financial Statements Financial Reporting Standards ("IFRS"). or completeness of the information of the 2014/15 and 2015/16 football In performing our analysis we also contained in this report. Employees of season. Thus, it is important to note relied upon information obtained from the global network of KPMG member that this analysis does not consider the publicly available sources: national frms, their managers, directors, partners latest transfers to be accounted for in the governing bodies, trade associations, and employees expressly disclaim any 2016/17 and 2017/18 seasons. international federations and various and all liability for errors and omissions media outlets. from the report. Acceptance and/or use In case the Financial Statements of this report constitutes acceptance of of the clubs were not available and KPMG professionals have not performed the assumptions and limiting conditions whenever we considered it necessary, any verifcation work or audited any included therein. KPMG's Sports Advisory Practice has of such fnancial information or any of consulted with the management of the the non-fnancial publicly available data For interpretation of fnancial terms clubs in order to obtain the necessary obtained from other sources considered used in this report, please refer to the information or clarifcations to support authoritative. methodology section of the Data & our analysis. For the few clubs having a Analytics tab of KPMG's fnancial year-end not aligned with the Whilst every effort has been made www.footballbenchmark.com European football season, we extracted by KPMG's Sports Advisory Practice website.

2 In order to conduct cross-league analysis and comparison where the local currency is not the euro, KPMG has converted all local currency figures using the average exchange rate for the twelve months prior to 30 June 2015 and 2016.

© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name and logo are registered trademarks or trademarks of KPMG International. © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member frm of the KPMG network of independent member frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Hungary.