Southampton Bought by Chinese investors

Iggle Piggle · Aug 14, 2017

Mackenzie said:
Having just had a peep at the Saints message board, they all seem quite pleased that it's happened.

How things could have been very different at Saints.

https://www.theguardian.com/football/blog/2016/nov/05/coventry-city-sisu-southampton

pishhead · Aug 14, 2017

I genuinely have no idea why people invest vast sums of money into football clubs. Especially at Premier league level, especially if as expected there isn't a vast increase in TV revenue from the next round of negotiations for the new tv deal.

Triggaaar · Aug 14, 2017

el punal said:
That's a Korean recipe.

The Chinese eat dog too.

Triggaaar · Aug 14, 2017

beorhthelm said:
but we dont. however, there is nothing to stop a consortium of fans buying a club.

There is. Money.

Barry Izbak said:
Too late.

I'm not sure laws couldn't be changed to make it so that fans had to own over half the club in time.

El Presidente · Aug 15, 2017

Gwylan said:
If Southampton are worth £260m (if 80% of the value is £210m) then how come Ashley values Newcastle at £400m? Surely, Southampton are better established PL club, one with an excellent academy - one of the best in the country. Perhaps El Pres or one the accountants on here can tell me why Newcastle is worth more, because I can't see it

I did a valuation of all the EPL clubs a few months ago, based on their most recent financials, using a reasonably good model. It doesn't take into account the latest TV deal, and assumes continued existence in the EPL, but is valid if you think the club is going to continue in the top flight.

Ashley values the Toon at a higher figure because the club generates more profit than the Saints. That's born out by the model. It doesn't take into consideration the reduced risk of survival as a result of paying lower wages though.

LamieRobertson · Aug 15, 2017

El Presidente said:
I did a valuation of all the EPL clubs a few months ago, based on their most recent financials, using a reasonably good model. It doesn't take into account the latest TV deal, and assumes continued existence in the EPL, but is valid if you think the club is going to continue in the top flight.

Ashley values the Toon at a higher figure because the club generates more profit than the Saints. That's born out by the model. It doesn't take into consideration the reduced risk of survival as a result of paying lower wages though.

View attachment 88235

View attachment 88235

That yellow is a bit bright this late

Easy 10 · Aug 15, 2017

pishhead said:
I genuinely have no idea why people invest vast sums of money into football clubs. Especially at Premier league level, especially if as expected there isn't a vast increase in TV revenue from the next round of negotiations for the new tv deal.

Its a status symbol. The Chinese in particular get a raging hard-on over public shows of financial clout.

el punal · Aug 15, 2017

Triggaaar said:
The Chinese eat dog too.

Right, that's it then, the next takeaway will be an Indian.

Gwylan · Aug 15, 2017

El Presidente said:
I did a valuation of all the EPL clubs a few months ago, based on their most recent financials, using a reasonably good model. It doesn't take into account the latest TV deal, and assumes continued existence in the EPL, but is valid if you think the club is going to continue in the top flight.

Ashley values the Toon at a higher figure because the club generates more profit than the Saints. That's born out by the model. It doesn't take into consideration the reduced risk of survival as a result of paying lower wages though.

Thanks for that. Of course, the next season I imagine Newcastle's profits would have been a lot lower as they'd have been in the Championship but it's a bit of an eye opener as to how much profit Toon makes,

Surprised at Southampton's profits being so low though. Surely they must make good money on their deals: they either produce through their academy or buy low, sell high.

El Presidente · Aug 15, 2017

Gwylan said:
Thanks for that. Of course, the next season I imagine Newcastle's profits would have been a lot lower as they'd have been in the Championship but it's a bit of an eye opener as to how much profit Toon makes,

Surprised at Southampton's profits being so low though. Surely they must make good money on their deals: they either produce through their academy or buy low, sell high.

It's a valuation model rather than a list of profits. Takes into account wage control, profitability, income and excess capacity.

Not Andy Naylor · Aug 15, 2017

So on the one hand there's less influence from the Liebherr family, who had good local business links because they manufactured most of the cranes used at Southampton docks. But on the other, more investment.

So on the whole a bit sweet and sour.

Not Andy Naylor · Aug 15, 2017

El Presidente said:
I did a valuation of all the EPL clubs a few months ago, based on their most recent financials, using a reasonably good model. It doesn't take into account the latest TV deal, and assumes continued existence in the EPL, but is valid if you think the club is going to continue in the top flight.

Ashley values the Toon at a higher figure because the club generates more profit than the Saints. That's born out by the model. It doesn't take into consideration the reduced risk of survival as a result of paying lower wages though.

View attachment 88235

The one that jumps out at me there is West Ham. Why are they so low?

Change at Barnham · Aug 15, 2017

Not Andy Naylor said:
The one that jumps out at me there is West Ham. Why are they so low?

Probably because they were still playing at Upton Park in 15/16.

Change at Barnham · Aug 15, 2017

For anyone interested in following the behaviour of new investors there is a fascinating half hour programme on the Sky Football channel called 'Working With Wolves'.
It is available on Sky Sports catch-up.
From what I've seen, if I were a Wolves fan I'd be feeling quite positive about their new Chinese owners.

http://www.skysports.com/football/news/11095/10968948/working-with-wolves-sky-sports-documentary-goes-behind-the-scenes-ahead-of-efl-kick-off

Triggaaar · Aug 15, 2017

El Presidente said:
I did a valuation of all the EPL clubs a few months ago, based on their most recent financials, using a reasonably good model.

Some of the positions won't make sense to a lot of us laymen. What sort of factors put a team like Everton so far below Leicester?

Green Cross Code Man · Aug 15, 2017

Triggaaar said:
Some of the positions won't make sense to a lot of us laymen. What sort of factors put a team like Everton so far below Leicester?

Ancient (but lovely) old ground and recent lack of exposure to success unlike Leicester's title? Don't forget, football only started after Everton last won the league.

Triggaaar · Aug 15, 2017

Green Cross Code Man said:
Ancient (but lovely) old ground and recent lack of exposure to success

If those factors matter much, I'd expect Palace to be lower.

El Presidente · Aug 15, 2017

Not Andy Naylor said:
The one that jumps out at me there is West Ham. Why are they so low?

They don't own the stadium, profits aren't great and had quite a lot of debt. Figures based on 2015/16 accounts so I'd expect a big jump for WHU when I do the update next spring when new accounts out.

El Presidente · Aug 15, 2017

Triggaaar said:
Some of the positions won't make sense to a lot of us laymen. What sort of factors put a team like Everton so far below Leicester?

Everton lost a lot of money in 2015/16, Leicester boosted by winning EPL which generated more broadcasting income and prize money.

Triggaaar · Aug 15, 2017

El Presidente said:
Everton lost a lot of money in 2015/16, Leicester boosted by winning EPL which generated more broadcasting income and prize money.

But the boost from winning the EPL is temporary, how is that affecting the value of the company so much?

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