Bayern Munich Overtake Manchester United As Most Valuable Football Brand
May 29, 2013
After winning the Champions League on the pitch, Bayern have achieved great success off the field and been ranked top of the latest BrandFinance Football 50 list.
The Bundesliga champions have moved from second to first in this year’s table after achieving a 9% increase. Manchester United’s early Champions League exit is one of the major factors in their value’s 2% depreciation. The BrandFinance figures are calculated using variables such as revenue figures, squad values and UEFA co-efficient.
The top ten is dominated by clubs from England’s Premier League – as well as Manchester United, Chelsea, Arsenal, Liverpool and Manchester City all appear. The Premier League’s total valuation is $3.1 billion, still ahead of the Bundesliga’s $1.9 billion.
Brand Finance’s head of sports valuation, Dave Chattaway said: “Bayern Munich is still very much a story of domestic dominance, however its continued presence in the Champions league has provided the club with access to a global audience.
“The challenge now for all Bundesliga clubs and the league itself, is to see if they can export their domestic brand strength into global opportunities.”
Brand Finance CEO, David Haigh, added: “The commercial transformation of the English game, which has created hugely successful global brands, had been seen as the model to emulate. However the escalation of player wages, poor financial management and alienation of grass roots fans has left many people jaded.
“In contrast the cheap tickets, high attendances, democratic ownership structure and financial prudence of the Bundesliga now looks like an attractive alternative, particularly now it is delivering world-beating, fluid football rather than the more workmanlike style German teams had been known for.
“Just as British politicians and business journalists have long been calling for our economy to emulate the German Mittelstand, now sports commentators are wondering whether we can learn from the Bundesliga.”
(Table via Daily Mail)
BrandFinance’s methodology
Brands are included based on their historic origins rather than their current domicile.
We calculate Brand Value using the Royalty Relief approach. Brand value is essentially the cost that a third party would have to pay to license the use of a brand. Brand strength analysis is used to determine the royalty rate.
Brand strength analysis benchmarks the strength, risk and future potential of a brand relative to its competitors.
This takes into account financial metrics such as revenue mix, revenue growth, football specific marketing metrics – including number of domestic/global honours, squad value, club heritage, UEFA coefficient ranking and average attendance and stadia utilisation amongst others.
Brands are then awarded a brand rating, a letter grade, similar to a credit rating from AAA+ to D. Having been determined based on the brand strength, the royalty rate is then applied to revenue figures to determine the brand value.
This means that it may be possible for a fairly weak brand with large revenues to still have a significant brand value while an extremely strong brand, because it caters to a niche market, does not.
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