Every year, Forbes magazine puts out its list of the most valuable sports teams in the world. How do they define “valuable”? That’s an excellent question, and one that doesn’t often get talked about when mentioning which teams are in which place on the list most of the year. All that gets said is “Real Madrid is the most valuable soccer team in the world”, which, sure, why not.
The dirty little secret - and it’s not really a secret, because it’s right there! - about the Forbes valuations is that they’re basically SWAG’s, based on nothing (emphasis mine):
The franchise values below are based on Forbes’ published valuations over the past 12 months. Team values reflect enterprise values (equity plus debt).
So yeah. They basically take a guess at what a team’s equity is - no team outside the Green Bay Packers is open to the public with their books - add in the team’s debt, and boom goes the dynamite, there’s your value, and thus there’s your ranking.
There is a lot missing from that calculation. Operating costs, specific revenue levels, structure and interest rate of debt (long-term low interest debt is better, for valuation purposes, than short term debt of any kind), that sort of thing - there’s a ton of math that Forbes doesn’t (and by definition, can’t) do to arrive at their ranking.
But, sports fans love their rankings, someone’s gotta be the best, so rank they do! Unsurprisingly, NFL teams dominate the top half of the list, led by the Dallas Cowboys at an eye-watering $5 billion, and more than half of the Forbes list is NFL teams. The highest ranked soccer team, also unsurprisingly, is Real Madrid at #3 (behind the Yankees) at $4.24 billion.
The rest of the top 10 is the usual suspects, with the Knicks at #5 being the highest rated NBA team. Scroll down a bit, though, and there’s scrappy lil’ Arsenal, plugging along at #42. Forbes estimates the value of the club at $2.27 billion, up 1% from last year’s list.
What does all this mean? Primarily that it’s the offseason and there’s not a whole lot of other stuff going on. But it also confirms, again, that Arsenal are not just a club - they’re a big business, and that is how all the activity they pursue, in transfers or in commercial sponsorship pursuits, should be viewed. There’s nothing about Arsenal that’s a small time operation any more - scouting is more than one person, coaching is more than a handful of guys on the sidelines on game days - and while that doesn’t let Arsenal off the hook for anything, it can help to explain why and how they make some of the decisions they make.
I’m not saying that to excuse anything they do; I’m just trying to put some context around the way they do it, because Arsenal, at this point, is not just a few people in a room making decisions on a whiteboard. It, like every other pro sports team, is a highly complex organization doing a lot at once, and it’s crucial that they get the right people, people who understand those complexities and can navigate them well, in the right positions to do those jobs as well as they can. Are they there yet? I don’t know. But that’s their challenge.