The on topic thread

[SM]

What I don't get is that a club could take out £200m in debt and spend it on crap players, those players are then £200m in assets to the clubs value, then an an extra £200m in debt is added to the value of the club even though they have essentially wasted the money?

Or is the model based on the fact than any money spent is likely to improve the value of the company by 200% of the outlay? ie: £200m on assets and the associated £200m debt is going to improve the value of the company by £400m?

Impairment of assets would also be taken into account in the valuation.

 

[moomba]

AFAIK when a player is bought the purchase price is added to the books as an asset.

Each year of their contract that value reduces (by a quarter on a 4 year contract) and that amount us accounted for as an amortisation expense.

Ultimately every player is worth nothing as they can all walk on a free at the end of their contract.

Stones for example (I'll presume £40m.fee and 5 year contract) was an asset worth £40m this season. His book value will be £32m next season, £24m the season after etc etc until the end of his contract when it's zero.

If he resigns at the end of 5 years his value will remain at 0.

You can write on or write off player values but clubs rarely do it.

 

[moomba]

In a very simple scenario debt means you have cash you wouldn't otherwise have, so if someone is paying you for your business they will need to pay you to take that cash.

But surely that cash is already accounted for when valuing the club.

 

[SM]

But surely that cash is already accounted for when valuing the club.

You're right. Valuation modeling is completely wrong and your special objective 100% accurate modeling is correct. It'll revolutionize business acquisitions.

If you deduct the debt then you're actually removing the cash from the valuation.

 

[moomba]

Sorry for asking.

 

[Stan_Darsh72]

Im willing to back KPMG and Forbes to value clubs over some random on twitter.

 

[Stan_Darsh72]

KPMG did this last year and i would call it pretty accurate

 

[Zidane98]

Chinese clubs must be worth a (Hebel) fortune under this valuation method with all their outrageous spending on over priced players.

In fact Shanghai Shenhua could add £500m to the value of the club overnight if they bought Shrek for £500m pounds today.

 

[Zidane98]

KPMG did this last year and i would call it pretty accurate

Just a slight difference for Man City.....

 

[chef]

KPMG did this last year and i would call it pretty accurate

Now that seems a bit more realistic.

 

[Art Vandelay_]

KPMG did this last year and i would call it pretty accurate

Will be interesting to see how far we jump in the next few years given the changes at the club.

 

[moomba]

Will be interesting to see how far we jump in the next few years given the changes at the club.

https://thespursreport.wordpress.co...s-to-join-the-premier-leagues-1-billion-club/

 

[Cooldude]

We manage 9th having been without CL for so long, if we can just get it back with the upgrades to Anfield coming up we'd be in decent shape

 

[Zidane98]

https://thespursreport.wordpress.co...s-to-join-the-premier-leagues-1-billion-club/

Could you get a more biased article?

Also Arsenal suffered financially up until about 2013 because they were repaying the debt for Emirates Stadium. And that's with matchday revenue increasing by 46 percent.

 

[elhadjihenry]

In a very simple scenario debt means you have cash you wouldn't otherwise have, so if someone is paying you for your business they will need to pay you to take that cash.

Right. So if Man United are "worth" 1 billion dollars in assets and are 1 billion dollars in debts, to buy them you would have to pay the billion dollar "worth" and also pay for the billion that is in debt, hence a 2 billion dollar valuation?

 

[Art Vandelay_]

https://thespursreport.wordpress.co...s-to-join-the-premier-leagues-1-billion-club/

Interesting. Under the valuation of Dr Markham our current figure would be largely different to other clubs as iirc up until stadium construction we were debt feee which is an input that all other big clubs would have I presume.

Shows a £70m increase in revenue at Arsenal moving into the Emirates. Ours may be higher having tied ourselves to the NFL and you'd expect we may get a higher stadium rights deal that what they negotiated over a decade ago so does give an idea of where we can push on from here.

Hope some of this increased spending power goes into wage bill increases, this is all being done to keep pace with the big clubs and that's the biggest area we fall short of the rest.

 

[moomba]

Talking about the Markham model.

 

[moomba]

Talking about Forbes

 

[moomba]

Talking about Markham

 

[ADL9798]

Yeah I'd be questioning both the source and the purpose of this.

Liverpool only 3% more valuable than recently promoted Newcastle, and determined to be worth just 50% of the value of Tottenham, while Norwich are worth more than Everton? In what context? Brand value? To purchase the club? I'd be querying their methodology because many of those valuations are unlikely to put it lightly in either scenario. The KPMG figures seem far more plausible.

 

[SM]

KPMG did this last year and i would call it pretty accurate

I hear KPMG are good eggs.

 

[SM]

Right. So if Man United are "worth" 1 billion dollars in assets and are 1 billion dollars in debts, to buy them you would have to pay the billion dollar "worth" and also pay for the billion that is in debt, hence a 2 billion dollar valuation?

Yeah basically, Bojan KantKick can probably explain it better than me.

 

[jd2010]

Could you get a more biased article?

Also Arsenal suffered financially up until about 2013 because they were repaying the debt for Emirates Stadium. And that's with matchday revenue increasing by 46 percent.

They weren't debt free going into building the stadium iirc and hadn't been making profits in their final years at highbury.

I'd assume we run a significantly better EBITDA in the new stadium than currently with a lot of that profit paying off debt rather than increasing net spend initially. Would say season 3 onwards (assuming we aren't bought out) is when we will actually change how we operate buying/selling players

 

[Magma]

Im willing to back KPMG and Forbes to value clubs over some random on twitter.

whether you disagree with the modelling or not it's hardly some random on twitter.

it wuld all be just a bit boring if everyone accepted the exact same thing as gospel when i dont think there is really any particular reason why forbes, deloittes and whatnot are 'right'. people just seem to like the numbers a bit more.

 

[Cooldude]

So which is #fakenews?