Financial Study Concludes Villarreal are one of the best run clubs in the world

Recently, Off The Pitch produced a report on the financial health of 128 different clubs throughout Europe. Using a variety of criteria (which we will discuss below) they then rated how well run these clubs were financially. However, in their article they didn’t release the full report, and only gave the top ten teams in full. So, naturally, I grabbed the email off the bottom of the article and messaged Off The Pitch to see how Villarreal stacked up in their rankings.

The Metrics

The first metric is EBITDA margin (percentage of operating profit in relation to overall revenue), which is calculated independent of transfer revenue. The second is ROA (return on assets) which in this instance primarily focuses on player registrations, and how profitable a club is in relation to it. The third is Equity Ratio, which looks to find out how leveraged their financing is by their owners’ wealth.

Top Clubs

La Liga had the top three clubs in the overall rankings. Leganes, Eibar, and Celta Vigo. Also in the top five are Ajax and Borussia Dortmund, known for producing high profit young talent, and world powerhouses Manchester City and Bayern Munich are both in the top ten.

It’s fascinating to see a relegated club come out on top. They did it by having a dominant score in the return on assets category thanks to increases in player registrations and player sales at the same time. It’s actually a shame that Leganes got relegated when they did, because they had finally built a financial foundation capable of sustaining life in La Liga in a healthy way. They were relegated, essentially, for want of a goal on the last day, after Barcelona stole their best forward outside a window when they were unable to replace him. (Barcelona is now trying to get rid of that player, they ruined Leganes to get one goal out of a player, which I think of as the same goal that Leganes ultimately needed.) Leganes will drop in these rankings for all manner of reasons next season but one of them will be a significant drop in their player registrations.

Villarreal

Villarreal ranked 12th in Off the Pitch’s overall ranking. According to the data sent to me by their admin, Villarreal came in with an overall weighted score of 25.2, one point below 10th place Napoli. They have an EBITDA-margin score 22.5% (equal with Napoli and better than six of the clubs in the top 10), an ROA of 6.6%. (better than three of the top ten) and a equity ratio of 47.2%. (better than two of the top ten clubs).

Our strength, obviously, is in the relationship between the amount of profit we have and the overall revenue we have. It’s an area where the German clubs in the top 10 struggled, and I wonder if that is somehow connected with their 50+1 rule and the fact that-being majority owned, the clubs aren’t primarily focused on profit.

The Bottom Line

Just like on the pitch, data gives context to the eye test. Villarreal is being very well run financially. We sit at 12th out of 128 teams in their analysis, and we are more successful on the pitch than all the La Liga teams ahead of us. The next La Liga side in their rankings was Real Madrid at number 20 clearly the most financially stable of Spain’s biggest three clubs as we learned during the lockdown. We sit in a really good balance, I think, between financial stability and on field success, and it is my (hopeful) belief that with the manager we have now and a little ambition in the transfer market we will see a trophy lifted before too long.

As ever we are indebted to Sr. Roig for the remarkable things he has done on this club. He has done things never before thought possible and has built the club in a way that it can support itself for years to come.