But the report makes sorry reading for Manchester United, who have dropped down eight places, out of the top 10 and below Liverpool for the first time.
Bayern Munich are third and Real Madrid fifth, while Tottenham are a surprising name coming in at fourth in the list.
PSG have overtaken Manchester City as the most financially powerful club in world footbal
City are second in the list, according to the annual Soccerex Football Finance 100 report
The clubs are rated by a football finance index score, which is based on the value of the current squad, tangible assets, finance available in their accounts and potential owner investment and net debt.
The analysis is based on balance sheets and annual reports published by clubs as well as sources from as far afield as UEFA, The Financial Times, Bloomberg, Yahoo Finance, Forbes, Transfermarkt and Hooevers. This edition analyses the financial year 2017-18.
The report ranks the financial potential of each club and develops a methodology that looks at the performance of clubs in the five key variables, weighted against that variable’s percentage of the accumulative total, thereby giving an FFI score.
PSG top the list with an FFI score of 5.318. They and second-placed Manchester City (5.197) are way ahead of the chasing pack.
Manchester United have dropped down eight places and out of the top 10 in the list
The Old Trafford club have fallen behind arch-rivals Liverpool in the list for the first time
FOOTBALL FINANCE – TOP 25
2. Manchester City
3. Bayern Munich
5. Real Madrid
10. Borussia Dortmund
11. Atletico Madrid
13. RB Leipzig
15. Guangzhou Evergrande
16. Manchester United
18. Los Angeles FC
19. Bayer Leverkusen
22. LA Galaxy
23. Zenit St Petersburg
24. Nagoya Grampus
25. Inter Milan
The study said PSG had reduced their debt by £58m over the last year while City’s debt levels had increased by more than £75m.
PSG’s rise is due to an improved level of financial management that has seen them increase cash reserves and reduce debt levels, through both player sales and support from their Qatari owners.
Their annual increase in cash reserves was five times that of City’s.
Bayern Munich are in third place with a score of 3.888 in a top 10 dominated by the Premier League. Spurs (3.441), Arsenal (sixth, 3.150), Chelsea (seventh, 2.893) and Liverpool (eighth, 2.616) are all in that top echelon.
Real Madrid (3.336), Juventus (ninth, 2.195) and Borussia Dortmund (10th, 2.154) make up the rest.
Tottenham are a surprising name up in fourth on the list ahead of Real Madrid in fifth
Manchester United fell eight places from last year to 16th in the report, mainly due to the depreciation in squad value and an increase in cash debt.
Barcelona are another club conspicuous by their absence from the top 10. They sit in 12th place, behind Atletico Madrid, with a score of 2.036.
There are a handful of surprising names in the top 25 including RB Leipzig (13th, 1.949), Hoffenheim (14th, 1.922), Guangzhou Evergrande (15th, 1.853), Los Angeles FC (18th, 1.657), Nagoya Grampus (24th, 1.275).
HOW DOES IT WORK?
Each club’s Football Finance Index is calculated via five variables
A) Playing Assets
B) Tangible Assets
C) Cash in the bank
D) Owner Potential Investment
E) Net Debt
A FFI Score + B FFI Score + C FFI Score + D FFI Score – E FFI Score = overall FFI score
Europe’s elite sides accounted for 80 per cent of the top 30 but almost half of those clubs are owned by non-European entities, including organisations and individuals from the Middle East, North American and Southeast Asia, the report said.
‘This year’s report paints a positive picture of football’s collective financial health, but it also highlights the growing imbalance between the power of Europe’s modern elite, with some of the game’s heritage brands in danger of being left behind,’ Philip Gegan, Soccerex managing director, said.
‘Despite Europe’s dominance, football is very much a global game with investment from football’s emerging markets very much underpinning its continued growth.’
The Premier League is represented by 18 clubs in the top 100, while Major League Soccer (MLS) was the next best with 17.