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ricardo

Club worth £90 million apparantly

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http://www.sportingintelligence.com/2013/03/25/from-man-utd-at-1bn-to-wigan-at-42m-whats-your-club-really-worth-250102/

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Manure and Arsenal at the top, then a huge gap to Chelski in third. I''m happy with our current position but hope to climb a few places in the next couple of years.

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I haven''t bothered reading the author''s detailed explanation of his methodology. Only the summary. But I am not sure how useful this is. None of his criteria - revenue, profit/loss, assets, stadium use and wages to revenue ratio - is specifically related to football performance or potential.

Of course such a criterion is hard (impossible?) to quantify. But anyone thinking of buying a club, whch is what the author seems to think his valuations would be useful for, would undoubtedly take account of this ponderable. Swansea, who are staying up and playing in Europe next season, are worth only half Sunderland, who might be in the Championship? It is arguable that in the much longer run Sunderland will generally be the bigger club, but that doesn''t seem to be the author''s rationale at all. He claims rather oddly that Sunderland''s value would be higher if the stadium was fuller! Well, it would be if Sunderland were playing more successful football...

And Southampon one from bottom? If I owned Southampton and a prospective buyer quoted that price based on that league table position to me I would laugh a lot. Southampton seems very much a club up the up, with bright prospects. In takeover value terms much more mid-table.

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there is a difference between ''value'' and ''price''.

price is what someone is willing to pay or sell for something and is a value only set when there is a seller or potential buyer.

value is the undefinable measure of what something is worth to one or more people.

he seems to be attempting to set a price on each club and given that for most clubs there is no buyer or seller even these prices are pointless.

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It seemed a bit spurious to me too, but it has made me consider just what  NCFC has to offer to potential buyers:

 

The ground and Colney and associated infrastructure.

The value of the squad.

The quality of the management and assistant staff.

The value of the fanbase, it''s position in the community and other aspects of goodwill.

Debt free (soon) with money in the bank.

Massive potential earnings.

Delia''s pies.

Wiz.

 

All for ninety million. A bit of a snip really.

 

 

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Theoretically that article won''t worth anything by the start of next season because every premier league club will be guranteed the huge increase in TV money therefore increasing the value of every single club.

If I thought I could buy a premier league club for £40/50m knowing that i''m guaranteed £100m + per year I would snap your hand off. That kind of business opportunity doesn''t come around too often.

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Unfortunately you would still have a club where the liabilities outstrip that £100m

 

ie the players contracts

 

 

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I think this is a worry actually. With the new TV deal, we''re approaching the point where almost any club will be attractive to a buyer. The only considerations will be squad strength, debt levels, turnover potential. Let''s assume we are an EPL club next year. Our debt levels will be among the lowest in the league, our squad strength is going to be reasonable at least and our turnover, while nowhere compared to the top half of the league is also far from the bottom. Anyone looking at buying a club now will be doing so to get a piece of all that revenue. Delia and co need to man the barricades at the fortress.

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[quote user="a1canary"]Delia and co need to man the barricades at the fortress.[/quote]You mean........"DELIA IN"!!! [:O]

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[quote user="a1canary"]I think this is a worry actually. With the new TV deal, we''re approaching the point where almost any club will be attractive to a buyer. The only considerations will be squad strength, debt levels, turnover potential. Let''s assume we are an EPL club next year. Our debt levels will be among the lowest in the league, our squad strength is going to be reasonable at least and our turnover, while nowhere compared to the top half of the league is also far from the bottom. Anyone looking at buying a club now will be doing so to get a piece of all that revenue. Delia and co need to man the barricades at the fortress.[/quote]

 

I wouldn''t worry too much, a1. Any prospective buyer is going to factor in the way the fans'' appalling lack of ambition is holding the club back. And the solution - buying a whole new set of of aspirant fans - would make the deal prohibitively expensive.

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If Wigan are worth 42m, then ipsh*t must be worth about 15m so we could buy Ipswich with our transfer budget, just to shut them all up!

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The thing about the TV rights going up is that every club in the Prem benefits, but they''re all in competition for each other so it will continue to drive up wages, and the players will be the main ones who benefit.  Plus it widens the gulf between the Prem and the lower divisions.

 

Also to an extent it will allow Prem teams to buy in more foreign players assuming other European leagues don''t see similar increases in their TV money.

 

Prem clubs don''t really make money for their owners.  Compare it to the US sports model where they have wages caps and no promotion/relegation plus the draft system, which means a major league franchise is a money-making machine for the owner.  In England the Prem clubs have to compete to avoid relegation, or for Champions league places, and have no wage caps or draft equivalent.  So they end up spending as much as they can.

 

It will be interesting to see if the Uefa limits make a difference.

 

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This is complete and utter nonsense as anyway who has the most basic knowledge of valuations knows. The value is the discounted net present value of future cash flows to the investor. As the football club makes nil or negative cash flows for the "investor" then the football club has nil or negative operating value for the investor. The only cash flow to the "investor" is the potential cash flow when the club is sold. As the club has no operating cash value then just like a piece of art the only way to value it is to look at similiar transactions whenit is sold.

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