Exploring Sport Valuations

Introduction

In March 2025, the Boston Celtics were sold with a controlling interest for $6.1 billion. Using the U.S. Treasury’s 2024 average USD/GBP rate (≈1 USD = £0.783, i.e. £1≈$1.278), that computes to roughly £4.78 billion. Last year (February 2024), Sir Jim Ratcliffe acquired a 27.7% stake in Manchester United for approximately £1.25 billion (≈$1.60 billion). On a 100% equivalent basis, this implied an overall Manchester United valuation of approximately $5.78 billion (≈£4.52 billion). Table 1 summarises these deals (with USD and GBP values).

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These headline figures, while seemingly straightforward, are the result of highly complex valuation judgments that are shaped by both financial fundamentals and the idiosyncratic nature of sports as an asset class. To arrive at such figures, one must weigh a range of considerations, including future revenues, the scale and loyalty of global fan bases, the durability of commercial and broadcast income and other operational considerations.

Like with all valuations, each transaction reflects not only what the buyer is willing to pay today, but also expectations about future strategic control, brand expansion potential, and revenue synergies. The primary difference between sports and traditional business valuations lies in the presence (or absence) of relegation risk, unique labour market dynamics, the competitiveness of the playing squad, the volatility of on-field performance, and currently undetermined regulatory oversight, all of which further complicate what is not usually a straightforward process.

To circumvent the difficulty in estimating valuations for sports organisations, many turn to proxy valuation providers, such as Forbes and Sportico. However, accuracy issues with these proxy valuations materialise when compared to the actual prices paid. For example, Sportico estimated Manchester United’s value at $6.2 billion in December 2024. Forbes estimated the value at $6.55 billion in May 2024.

The market capitalisation of Manchester United in December 2024 was $2.94 billion ²  ³, with an Enterprise Value of $3.66 billion ³ ⁴ significantly lower than the valuations by Forbes and Sportico. However, the Forbes and Sportico valuations are significantly higher than the value extrapolated from Sir Jim’s valuation of $5.78 billion. The Boston Celtics, however, were valued by Sportico at $5.66 billion in January 2025 and by Forbes at $6 billion in October 2024, with Forbes more in line with the $6.1 billion price paid by Bill Chisholm in March 2025.

This highlights the significant difficulty not only in determining an accurate value for a sports organisation, but also in the range of differences that seemingly accurate methods can yield. Forbes and, to some extent, Sportico, were accurate in their assessment of the Boston Celtics. Still, they showed considerable inaccuracy given the price paid and the extrapolated value for the minority purchase in Manchester United.

To establish an accurate sports valuation, it is pertinent to consider what is being purchased and for what purpose, or in IVS parlance, what is the basis of value? Determining the market value, even with a stock market valuation available, as shown with Manchester United, can provide significant inconsistencies. Fair value under IFRS 13, like in most businesses, often falls short in providing a fair sports valuation, as balance sheets typically fail to accurately reflect the economic reality of core assets, such as player contracts, and the current value of tangible assets, like stadiums.

Liquidation value is not a pragmatic approach for sports valuation. Investment value typically provides a reasonable basis for informed investment decisions. Consideration of the return on investment in sport is crucial. Typically, the ROI is not a monetary figure for most sports owners, and the return is often a form of ownership utility (soft power, status, fandom), making it difficult to quantify. 

When a valuer determines a suitable basis to value from, the next question is what method to use? Discounted Cash Flow (DCF), being the gold standard and often first choice, assumes one crucial element: positive (or eventually positive) cash flows. The vast majority of sports teams, especially in Europe, often have near-perpetual negative cash flows, rendering the approach unpragmatic. Adjust Present Value (APV) shares similar restrictions to DCF.

Capitalisation of earnings does not apply to perpetual negative cash flow and loss-making businesses, as does the cost approach; however, this is for reasons of reproducibility. Real options and probabilistic models are theoretically very strong. The next question focuses on what exactly is being modelled to estimate the value of a loss-making company? Is it the probability of success? The probability of positive cash flows? The probability of near or long-term team performance? A comparable company analysis or a comparable transaction analysis would be valid approaches.

However, while these approaches can be highly effective when applied within a single sport or league structure, where financial models, regulatory environments, and performance metrics are aligned, such methods may not be extrapolated across different sports, as their underlying economics are often fundamentally incompatible. We can already see the difficulty that arises not only in determining the basis of value but also in finding an applicable valuation method.

This article aims to support practitioners and those interested in sports valuations with identifying the most vital considerations in a sports valuation, aligning them with an appropriate basis of value, and determining which methods are most applicable. 

When Passion Meets Valuation: Navigating Intangibles in Sport

In most industries, intangible assets are difficult to define but relatively peripheral to day-to-day operations. In sports, the opposite is true: intangibles often take precedence. Chief among them are player contracts, arguably the most critical, visible, and paradoxically least understood asset class on a sports organisation’s balance sheet.

Clubs regularly hold tens, if not hundreds, of millions in contracted player rights, which are costed, amortised, booked, and used to support regulatory compliance. In accounting terms, these contracts sit squarely as intangible assets. Yet the economic reality they represent is far more complex and elusive. These players are not just labour or talent; they are the engine that drives every material revenue stream: matchday performance, league position, which in turn drives broadcasting, merchandise sales, sponsorship appeal, and the club's valuation itself.

A single player’s influence can alter a club’s entire financial profile. A marquee signing might boost shirt sales in new markets, increase global media visibility, and reposition the club’s commercial partnerships. Son Heung-min at Tottenham Hotspur is the epitome of this. However, this influence can rarely be fully captured within the accounting framework or, for that matter, in simple valuation models.

On paper, a player is booked at historical acquisition cost and amortised over the life of the contract ⁵. In practice, their market value may fluctuate drastically in either direction whilst on the balance sheet due to form (Romelu Lukaku), injury (Michael Owen), public perception (Mason Greenwood), or transfer speculation (Declan Rice), none of which is systematically reflected, or can be accurately reflected, in the books. Nonetheless, these intangibles not only drive a sports organisation's value, but their value is also volatile, which corresponds to a volatility in the organisation's value.

The disconnect is even more pronounced with players developed internally. Academy graduates may carry zero book value, but they represent enormous economic worth, not only as performance assets but also as cultural and commercial touchstones. We all hear the “He’s one of our own”, sung by crowds, highlighting the fan and cultural value placed on homegrown talent. This is especially acute in clubs with strong local identities or globally recognised development pipelines. Barcelona’s recruitment from South America is vital to the club's identity and success, but it is not reflected on the balance sheet. How do you capture the value of a homegrown captain whose presence boosts fan loyalty, anchors team identity, and enhances brand credibility, when no transaction ever took place to price them?

Moreover, player value isn’t purely a function of performance. Personality, image rights, leadership, and even off-field visibility all contribute to a player’s impact. Some athletes become strategic brands in their own right, transcending the sport: David Beckham, Cristiano Ronaldo and Lionel Messi, to name a few. But unlike a patent or a broadcasting license, their value isn’t separable from the human behind the contract. Humans are subject to performance volatility, injury, and decisions that no financial model can forecast with certainty. Who could have predicted Eric Cantona’s flying kick to a fan in the stands, let alone model the financial implications?

This creates a fundamental tension for valuers: the asset most central to a club’s financial future is also probably the most difficult to measure. Player contracts are visible, showing both the cost paid ⁶ to acquire, and the wages paid ⁷, yet inherently difficult to derive a current value. They prop up balance sheets, catalyse revenue, and shape club strategy, but defy simple valuation. This isn’t just a technical challenge, it’s an ontological one. The primary challenges for a sports organisation valuer stem from the inherent opaqueness of player salaries and transfer fees, coupled with the lack of a formal or universally agreed-upon method for valuing players, who are, after all, the most critical components of any valuation model. 

Understanding these dynamics isn’t optional—it’s essential. Because in sport, the intangible isn’t marginal. It’s everything.

Roster, Results and Revenue: Calibrating Cash Flows in Sport

In traditional business valuation, revenue is a function of market demand, pricing power, and operational efficiency. In sport, the 3 R’s (Roster, Results and Revenue) are fundamental interdependents for assessing cash flows and form the basis of the financial ecosystem of the sports organisation. For sports organisations, performance on the field doesn’t just reflect investment; it often dictates the viability of future investment. Understanding this feedback loop is essential when calibrating cash flows in the context of sports valuations.

At the heart of this system lies a simple yet powerful cycle: players determine the likelihood of on-field success, which leads to greater revenues. These greater revenues enable greater investment in talent and infrastructure, and when deployed effectively, drive on-field performance. A club that qualifies for European competition or wins a championship may immediately benefit from competition bonuses, increased ticket demand, sponsorship uplifts, merchandise sales, and global media exposure. These revenues can be reinvested into player acquisitions, training facilities, and youth development, thereby enhancing competitiveness and reinforcing financial momentum.

But the cycle can (and often does) work in reverse just as easily. Relegation, player injury, or a failed transfer window can disrupt results, depress revenues, and restrict reinvestment. Loss of broadcasting income, waning fan engagement, or negative media exposure can erode the club’s commercial appeal, leading to deferred spending, player sales, and diminished performance, which in turn fuels a downward spiral. This performance-investment loop is not linear, nor predictable. It’s a high-volatility dynamic where small changes in sporting outcomes can produce outsized financial consequences.

This is what makes forecasting cash flows in sport particularly nuanced. It’s not enough to model stable or marginal revenue growth based on historical trends. Analysts must understand the fragile interdependence between squad quality, managerial decisions, performance risk, and financial outcomes. For example, securing a marquee player might not only raise matchday revenues but also unlock new sponsor categories, accelerate merchandise sales in overseas markets, and generate exponential media attention. Conversely, a string of poor performances or an early tournament exit can abruptly wipe out forecasted income streams. Ten years ago, who would have envisaged Manchester United finishing 15th in the Premier League, on 42 points and losing the final of a second-tier European competition?

Crucially, these dynamics differ by league, structure, and geography. In closed leagues like the NFL or NBA, media rights and revenue sharing provide a buffer against short-term performance dips. In open systems, such as European football, revenue volatility is far more exposed to results, particularly through mechanisms like promotion and relegation. The consequences of a poor season can be immediate and severe, with cascading effects on player retention, player recruitment and financial fallout ⁸.

Valuers must therefore calibrate cash flows with acute sensitivity to performance-linked risk. This doesn’t mean guessing results but rather recognising how club-specific factors (e.g., wage-to-turnover ratios, wage-to-points ratios, squad age, injury exposure, performance volatility, management) can impact financial outcomes. A strong team today may face regression if investment wanes or key contracts expire; for example, Leicester City, who were Premier League Champions in the last decade, have been relegated twice since. A lower-tier club with a good season (such as a promotion) may warrant an upward adjustment in their value if the club has structural advantages, such as a strong youth academy or an emerging fan base, that suggest sustainability and growth. Without these considerations, a single good year for a lower-league club does not justify an increase in valuation. This single good season could be an anomaly, as they quickly return to their previous level via relegation, returning to approximately their current valuation. Without investment in improving the players (whether through recruitment, training, or the academy), performance improvement is unlikely, which will limit any revenue growth, forcing the 3 R’s cycle to correct the imbalance. 

In sport, cash flow is not just a function of business fundamentals; it’s a reflection of momentum. Capturing that momentum requires understanding the reinforcing (or eroding) relationship between investment, results, and revenue. Calibrating for that cycle is where sport diverges from conventional valuation, and where insight into the sporting performance can make the most significant contribution to valuation.

Defining Value in the Stadium: Getting the Basis of Value Right

In the modern sports economy, tangible assets are often overshadowed by intangible assets, such as player contracts and endorsements. However, beneath the hype and volatility, tangible infrastructure — especially stadiums and owned facilities — remains a foundational component of long-term value. Far from being static, underused spaces, today's stadiums are multi-purpose, revenue-generating hubs, brand showcases, and occasionally, tools for financial engineering. Understanding how to value them correctly, transparently, and in line with the right basis of value is central to any robust sports valuation.

Take, for instance, the Tottenham Hotspur Stadium or Atlanta’s Mercedes-Benz Stadium. These venues are not just homes for matchday fixtures; they are year-round, multi-event platforms designed for concerts, alternate sports and games, e-sports, corporate hospitality, and retail. The business case for these stadiums relies on cash flow generation that extends well beyond sport, turning what was once a fortnightly asset into a city-scale entertainment anchor. When evaluating such properties, it is essential to move beyond historical cost or single-use models. Instead, stadium value must reflect projected utility, alternative use potential, and replacement cost, adjusted for the rights, current footprint and development potential with obligations embedded in their use.

In valuation terms, this speaks directly to the basis of value. Under market value, assumptions must reflect what a typical buyer in the open market would expect to earn from the stadium, independent of a specific team’s occupancy. A stadium without a team is just a plot with a substantial demolition cost or a vassal stadium with many conflicting parties (think Coventry City FC and the Coventry Building Society Arena).

Under investment value, however, the stadium’s worth to the club may be considerably higher due to operational synergies, exclusivity, or alignment with strategic goals, such as fostering local fandom, building the brand, or providing elite training environments. Choosing the wrong basis or failing to define it clearly can lead to materially distorted valuations, particularly in transactions, financial reporting, or regulatory contexts. In the context of a team-owned stadium, market value may not accurately reflect its full strategic or synergistic value to the club, making investment value a more appropriate basis.

But tangibles don’t just anchor value into something capable of being measured; they also invite manipulation. Recent examples in football demonstrate how stadiums and related assets, such as hotels, retail spaces, and training grounds, have been transferred, leased back, or restructured to enhance financial performance or comply with regulations governing the costs in sports. In Chelsea’s case, assets such as the women’s team and club-owned hotel were sold to a related-party subsidiary, helping the club present a healthier balance sheet while maintaining effective control. While not inherently improper, such manoeuvres underscore the need for transparent disclosure of ownership structures and valuation assumptions, particularly when assessing compliance with sporting regulations or using these values in negotiating club sales. It also raises the question of how BlueCo, the ultimate parent of Chelsea FC, arrived at its £198.7 million valuation for a team that generated £11.5 million in revenues and £8.7 million in losses, but also highlights a key limitation of using a comparative transaction approach.

It’s essential to recognise that tangible assets provide long-term downside protection in an industry often defined by performance volatility. A club may underperform, miss out on European competition, or undergo financial struggles, but the stadium remains. If properly maintained, it can generate stable income, host third-party events, and even appreciate due to urban development. Yet, despite this, tangible assets are still frequently undervalued or treated as afterthoughts in sports valuations, particularly in high-profile takeovers focused on a global brand or a top-tier playing squad. For practitioners, this is a blind spot that warrants correction. Stadiums, training centres, and physical infrastructure not only support cash flows, but they also represent strategic control points. They are often the only real collateral in a sport where most other assets are intangible, volatile, or declining in value.

In a valuation landscape dominated by narrative and potential, tangible assets remain a sober, solid pillar. Understanding how to value them properly, encompassing the synergistic elements they provide and determining the appropriate basis of value, isn’t just good practice; it's essential. 

Sports Valuations: Integrating Intangibles, Performance, and Infrastructure

This article aims to support practitioners and stakeholders in sports valuations by identifying the critical components that define value in this unique asset class, aligning them with an appropriate basis of value, and guiding the selection of the most applicable valuation methodologies. A comparable company analysis framework emerges as the most effective approach, one that recognises the distinct operational, structural, and financial realities of sporting entities. Even though we acknowledge the inconsistencies with the Manchester United transaction and the market approach, what is fundamental is the framing of the market, something we will address in this article's conclusion.

Central to this approach is the challenge of valuing intangibles, particularly player contracts. These assets are visible on the balance sheet but defy accurate valuation due to their dependence on unpredictable factors such as form, injury, public perception, and transfer market dynamics. Internally developed players, often valued at zero, may represent enormous real-world worth as cultural symbols and commercial catalysts, further complicating attempts to develop consistent valuation approaches. These intangible assets are not just influential; they are the core drivers of team identity and revenue streams.

Overlaying this is the critical feedback loop of the 3 R’s—Roster, Results, and Revenue. A squad's quality influences performance; performance dictates revenue; revenue, in turn, fuels reinvestment in the playing squad. This cycle is foundational to a club’s operational viability and must be accurately captured in any valuation model. Ignoring this dynamic risks underestimating the volatility and potential of sport-related cash flows.

Tangible assets such as stadiums, training grounds, and owned facilities provide the bedrock of sports valuations. They serve as stabilising anchors, offering long-term downside protection in a performance-volatile environment and forming the only genuinely leverageable assets in many transactions. However, their presence also invites regulatory complexity, as these assets are increasingly used in creative accounting manoeuvres, from leasebacks to related-party transfers, to meet financial compliance targets or optimise perceived value.

The structure of the league — closed systems like the NBA or NFL versus open systems like European football — materially alters risk exposure and revenue predictability, thereby influencing the appropriate valuation multiples. Practitioners must adapt their assumptions accordingly and incorporate this into their market framing. It is not possible to compare an NBA team to a Premier League team; they are fundamentally not comparable. Comparing teams from within the same league is most preferable, and comparing teams from the same sport is feasible, considering regional differences. Beyond this, the market economics change so fundamentally that the teams are not comparable.

While the comparable company analysis method offers a structured and pragmatic pathway to valuation, its application must remain sport-specific and context-sensitive. There is no universal model that applies across all leagues or sports. However, the model adopted for, say, an NBA team, must remain constant for all NBA teams. The IVS framework demands precisely this degree of nuance—tailored inputs, robust market data, and defensible assumptions—to ensure valuations are not only technically sound but grounded in the lived economics of sport. The key consideration for practitioners in this space is determining what metrics are truly comparable and clearly defining how the metric is a fundamental driver of value. Remembering, the most important metrics are not likely to be monetary. 

Closing Summary

Returning to the examples of the Boston Celtics and Manchester United, the contrasting valuations underscore the core message of this analysis: in sports, value cannot be universally defined by surface-level metrics or proxy estimates. The Celtics' sale closely aligned with third-party valuations, reflecting the financial predictability of a closed league like the NBA with revenue-sharing structures and stable broadcasting deals. In contrast, Manchester United’s minority stake transaction exposed the volatility and subjectivity inherent in open-league football, where performance risk and ownership control complicate comparability. These cases illustrate why a comparable company analysis approach, calibrated to league structure and considering tangible assets, team performance and sport-specific dynamics, is necessary. Valuation in sport is not formulaic; it is context-driven, and success lies in recognising what makes each asset and each organisation fundamentally unique, within the context of what makes those other assets and organisations fundamentally unique. 

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References:

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  ¹ United implied at 100% value $5.78 billion/£4.52 billion 

  ² Ignoring share classification and voting rights allocated to each share, which undoubtedly skews the share price.
  ³ As per Yahoo! Finance.
  ⁴ Interestingly, Football Benchmark, a sports-oriented consultant, provided an Enterprise Value for Manchester United of $5.71 billion in May 2025

  ⁵ December 2023 when a cap of 5 years was introduced on the amortisation period in football.

  ⁶ Actual prices paid are rarely made publicly available, with most sums being media speculation.
  ⁷ Wages in accounts are declared as a total for the whole club, including all staff. 

  ⁸  This has been mitigated in recent times through relegation contract clauses and parachute payments, which reduce the financial impact.

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About the Author:

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Danny F. Hill is an Assistant Professor of Finance at Providence College School of Business, Rhode Island, USA and obtained his PhD from Loughborough University, London, with the development of a new methodology on football player valuations. He has been published in highly ranked sports journals. He is currently writing a book, “Sports Valuations: Analysing the Financial Value of Organisations, Teams, and Players”, scheduled for publication by Elgar Publishing in 2026, as well as contributing to the “Oxford Handbook of Corporate Finance” on Valuation Methods, also scheduled for publication in 2026. Danny provides discrete consulting services to the sports industry on player and team valuations through his consultancy Virsolus Limited.