Bloomberg Surveillance · Wednesday, August 26, 2026
The valuation of European football clubs, particularly in the Premier League, is significantly lower than comparable U.S. sports franchises due to the risk of relegation. Mark Heimb explains that while MLS franchises can be valued higher than some Premier League teams, the absence of relegation in MLS provides greater revenue certainty. The substantial financial implications of relegation, including a loss of significant revenue, make long-term planning more challenging for European clubs.
“It really comes down to two things. One is the economic model for European football teams is not that great. Even the ones that generate the most revenue don't generate very much at all of a bottom line. And so that's one. But the other huge one is relegation risk. And it's best shown when you compare a league like MLS that doesn't have relegation risk and you look at the ones that do.”
“It's a huge discount because not only, obviously, the prestige drops if you get relegated, but you lose a massive amount of revenue at all when that happens. And so a huge amount of the difference, I think, is explained by actually relegation risk.”
“And so when you're in that zone, it's a lot harder to have long-term planning the way you do in an American traditional sports franchise because you have this revenue uncertainty both ways.”