Manchester United most valuable team in the world – Wall Street

Shares of Manchester United surged almost 5% yesterday after Man United  announced its new, $130 million-a-year kit deal with Adidas, which will begin during the 2015-16 season and see the German sportswear maker replace its U.S. rival, Nike.

Wall Street now affords United an enterprise value of $3.6 billion. Math: market value ($3.05 billion) + long term debt ($613 million) – cash ($57 million). In April, we valued Real Madrid as the world’s most valuable team,worth $3.44billion  , with Barcelona second at $3.22 billion, and United third at $2.81 billion.

Wall Street may be right. Although United will not participate in the lucrative  2014-15 Champions League due to its seventh place  finish in the 2013-14 Premier League, the team now commands both the richest uniform and shirt deals in the world (the Manchester City $63 million a year shirt deal with Etihad Airlines is excluded from the table because it also includes stadium naming rights).
It may be tough for RM to catch Manchester United, at least in terms of how Wall Street perceives their valuations.
Spain is looking to have La Liga teams negotiate their next television deal collectively rather than having the individual teams sell their media rights. This will likely eliminate the huge television revenue advantage RM and Barcelona ($182 million each, with number two Atletico Madrid pulling in just $61 million) currently enjoy over their rivals.
Also, RM’s shirt with Adidas runs through 2020 and its shirt sponsorship with Emirates Airline is through the 2017-18 season. So those unless categories have a reset written into the deals RM will not get an increase in revenue from them any time soon.
Outside of soccer, the two most valuable teams are MLB’s New York Yankees ($2.5 billion) and the NFL’s Dallas Cowboys ($2.3 billion). But both of those valuations are likely too low given they were published prior to Steve Ballmer’s $2 billion  offer for the NBA’s Los Angeles Clippers in May.