Understanding how a sports team is valued is crucial for sports investors. It enables them to make informed decisions and invest in the most lucrative, high-growth organisations.

However, valuing a sports team differs from traditional business or asset valuation. While businesses are primarily assessed based on their stature, popularity, and growth, sports teams are influenced by additional factors.

Elements such as personal interests, team history and heritage, recent performances, and the relationship between fans and club owners all play a role in determining a team's value and market price.

Is Value the Same as Price?

Value and price are not the same. Value is based on hypothetical buyers and sellers in a notional market, whereas price is the actual sum paid in an open market negotiation.

Typically, assets are priced close to their value. While open-market negotiations do influence the final price, the difference is usually minimal.

However, when it comes to sports teams, the gap can be significant. A club's initial valuation is often much lower than the price its stakes ultimately sell for. In some cases, the reverse is also true—a high valuation may not translate into a high selling price.

Why such a discrepancy? Special circumstances. Unlike traditional assets, sports teams are influenced by unpredictable and sometimes immeasurable factors.

For example, the price stakes ultimately sell for is often driven by the emotional investment of the buyer. Those with a personal connection to a club—its history, heritage, or legacy—are often willing to pay more. Additionally, investors who recognise unique long-term financial opportunities within the club may also drive prices higher.

Why Can’t Top Platforms Value Teams Accurately?

Forbes, Football Benchmark, and Sportico are some of the most trusted names in the football industry. Their valuations are widely followed and relied upon by sports investors worldwide. However, in recent years, their estimates have consistently fallen short.

The reason is simple: they fail to account for personal, emotional, financial, and other buyer-driven factors.

Take Manchester United, for example. Until 2022, Forbes valued the club at $4.6 billion, while Football Benchmark took a more conservative approach, placing its valuation at $3.0 billion.

Yet neither was accurate. When stakes in the club were sold in 2023, the implied open-market value was $6 billion—twice Football Benchmark’s estimate!

Manchester United isn’t the only case. Other clubs have shown similar trends.

Consider Chelsea: Roman Abramovich sold the club to an investment group led by Todd Boehly and Clearlake Capital for $3.2 billion in 2022. Football Benchmark valued Chelsea at just $2.3 billion in 2021. Moreover, factors like the deteriorating relationship between the owner and fans should have negatively impacted the valuation.

Yet the final price reflected a 37.7% appreciation. A similar pattern emerged with AC Milan. In 2021, the club was valued at $0.6 billion, yet a year later, it was sold for $1.2 billion—double the estimate.

These cases highlight a crucial point: valuations from top platforms are not always accurate. Investors must look beyond these numbers and consider other key factors to make well-informed decisions.

How to Know the Difference?

The way top platforms value sports teams is often obscure and not well-defined, making it impossible for investors to optimise valuations by tweaking the formula. However, what can be done is to not take these valuations at face value and use them only as a benchmark. As we know, we cannot rely solely on these numbers to estimate a team’s real value or price in an open market.

So, how can we optimise the valuation and determine the actual price? By factoring in things such as recent performance, the relationship between fans and club owners, heritage, and history. These considerations help bring the valuation as close to the probable price as possible. And if you need help with this, you can turn to Stryde.

At Stryde, we help sports investors simplify sports investment and make decisions that serve their interests and grow their portfolios positively. By factoring in these nuances and the many little things that make a massive impact, we help sports investors identify the real worth of a club or sports team and make better investment decisions.

Know this: sports investment is an incredibly lucrative option. However, you need to know how to play the game right. More importantly, you need to know how to evaluate or assess the players—clubs and teams—accurately.

As a sports investor, you could either rely on reported valuations or work with a professional to assess clubs more accurately and make better investment decisions by considering the many subtle factors that significantly impact a team's worth.

Make the right choice!