Manchester United have lost the number one spot in the Forbes list of most valuable football teams to Real Madrid.

United had held top spot since business analysts Forbes started compiling the list in 2004 but have been overtaken by Real.

Barcelona are in third place and Arsenal fourth ahead of Bayern Munich in fifth place.

Real Madrid are valued at €2.53 billion, making the Spanish club the most valuable sports franchise in the world, and United at €2.43 billion.

Forbes said in a statement: “This is the first time since Forbes began valuing soccer teams in 2004 that Manchester United is not No 1 on the list.

"Real Madrid has been consistently delivering the highest revenues of any soccer team in the world, despite an intense economic meltdown in Spain. With superstars like Cristiano Ronaldo on the pitch, and coach Jose Mourinho on the bench, Real Madrid has thrived under the leadership of billionaire president Florentino Perez.

“According to this year’s soccer valuations, the top 20 teams are worth an average of €743 million , an increase of 26 per cent over last year.

“Forbes’ team values are enterprise values (equity plus debt) that are based on multiples of revenue that teams garner from television, premium seating, media, licensing, merchandise and concessions.”

David Beckham still tops the list of highest-earning soccer players with earnings of €39 million, €34 million of which came from endorsements. Real Madrid's Ronaldo is second with earnings of €33.7 million and Barcelona's Lionel Messi in third place with a total of €30 million last year from salary and endorsements.