European football clubs lose out amid soaring US valuations in deal frenzy
US sports team valuations are dwarfing those of European football clubs as investors are drawn to closed league model
European football clubs have been left on the sidelines of a deals boom that has highlighted soaring valuations for US sports franchises and underlined the challenges facing Europe’s team owners.
Investors argue that a failure to get a grip on costs, as well as the constant threat of relegation, has kept a lid on European interest even as a flurry of deals in the US has underscored rising valuations in several sports.
Private equity group Sixth Street and US financier Dean Metropoulos bought an 8 per cent stake in the New England Patriots in September. The deal put a value of more than $9bn on the National Football League team, equivalent to more than 11 times revenues.
A few weeks later, Guggenheim Partners chief executive Mark Walter completed his purchase of a majority stake in the Los Angeles Lakers, valuing the basketball team at $10bn, equivalent to about 18 times revenue.
According to estimates from Sportico, the average enterprise value of a team in the National Basketball Association has risen to 14.1 times revenue, up from 11.8 times in 2023.
Average valuations of NFL teams, which have been boosted by the league’s decision in 2024 to allow private equity firms to buy minority stakes, have increased to 10.2 times over the same period, according to Sportico.
Of the 10 most valuable sports teams in the world, six compete in the NFL, three in the NBA and one — the New York Yankees — plays Major League Baseball. Sportico estimates that Real Madrid is the world’s most valuable football club, yet it only ranks in 22nd place overall.
“You have this very predictable, durable, sustainable growth [in the US],” said Doc O’Connor, co-founder of sports-focused private equity firm Arctos Partners, at a recent industry event in London. “The environment in European football is very, very different from North American leagues.”
Valuations of the top men’s football teams, which are concentrated in Europe, have stagnated at just 4.2 times revenue. M&A activity in European football has dropped sharply since a spate of record-breaking takeovers in 2022, according to figures from governing body Uefa.
Apollo Global Management agreed to buy a controlling stake in Atlético Madrid, Spain’s third-biggest football club, at a valuation of between €2bn and €2.5bn in 2025. The lower end of that range implies a valuation of 4.9 times its 2024 revenue.
“The level of regulation at a league level [in football] is far reduced,” O’Connor said. “You have issues like promotion and relegation, you have no effective real debt limits and no effective limits on spending [on player wages and transfer fees]. That accounts for the difference in valuations.”
While football’s financial rules are being tightened both at European and national league level, several investors and team owners have called for US-style salary caps to halt spiralling spending on players by clubs.
According to the most recent figures from Uefa, more than half of Europe’s top-flight football teams reported operating losses in 2024, with an aggregate loss of €300mn. Transfer costs pushed overall pre-tax losses up to €1.2bn, while combined debt rose 10 per cent to €28.1bn.
Other experts also cite the divergence in the media rights markets in the US and Europe as an important reason for the difference in desirability to investors.
US sports leagues have successfully negotiated steep increases in their media rights. The NBA’s latest set of deals, covering 11 years, resulted in income rising from $2.6bn a year to $6.9bn, driven by strong competition from traditional cable networks and streamers.
Meanwhile media rights for major European football leagues are either falling or showing signs of stagnation.
Even the English Premier League, the most commercially successful national competition, only managed to secure a 4 per cent increase in its UK media rights, compared with eight years ago, when the rights were last renegotiated.
As well as the closed format of the competitions US sports teams share most central revenues equally, including income from TV deals, increasing their attractiveness to investors.
“The league organisation, structure and revenue-sharing opportunities in the US vs anywhere else in the world are just very different,” said John Lambros, head of digital media and entertainment at Houlihan Lokey.
“There’s lower risk and volatility in most US sports . . . no relegation risk and predictable media rights make revenues stable and foreseeable,” he added.
Football fans in Europe, however, are resistant to the closed-league model. The widespread anger at plans for a breakaway European Super League in 2021 was partly because the competition was designed so that founding member clubs could not be relegated.