[Football] Premier League club values

[Seasidesage]

Burnley are in my opinion (others are of course available) the best run club financially in the Premier League and the valuation reflects that. Gut reaction is that they should be lower in the table but they make money each year, keep wages low and have a strong balance sheet...and they do it year in year out.

I get that but what about the asset value? I would've thought you could buy the whole town of Burnley for £7.50 in Luncheon Vouchers and a empty twix packet? Whereas ours? is our freehold owned by TB or does he lease the land from the Uni's? I guess that would have some impact on our valuation which seems low to me (Uneducated guesswork valuation)

 

[Bold Seagull]

I get that but what about the asset value? I would've thought you could buy the whole town of Burnley for £7.50 in Luncheon Vouchers and a empty twix packet? Whereas ours? is our freehold owned by TB or does he lease the land from the Uni's? I guess that would have some impact on our valuation which seems low to me (Uneducated guesswork valuation)

You mean does the Amex land have an intrinsic value that in the future it could be sold and turned into a commercial business park with some mediocre retail outlets on it?

 

[Icy Gull]

What shenanigans have us so low in that list? I am shocked we are worth so little against other clubs. Tinpot Albion

 

[LlcoolJ]

Hi LLJ

There's two player costs in the profit and loss account.

Registration cost (paid to the previous employer) which is as you correctly point out, spread over the contract period as an amortisation cost. The club can of course sell the player registration at a profit at a future date so that is why it's an asset.

Wage cost which is a monthly expense like rent, insurance etc.

Yeah I'm just trying to get my head round the fact that the asset can leave if it doesn't get maintenance costs that are higher that it's original value.

I do get it from an accountancy point of view, but from a logic point of view, not so much.

 

[Thunder Bolt]

You mean does the Amex land have an intrinsic value that in the future it could be sold and turned into a commercial business park with some mediocre retail outlets on it?

Not the Falmer site, but Monks Farm has been sold/leased? for commercial use and building houses. I think it is owned by the club rather than Tony Bloom personally

 

[AmexRuislip]

If anyone is interested I've put out a report on club values, Albion came in 18th at £187 million using the MMM formula.

The short version

View attachment 122925

The long version

http://priceoffootball.com/2728-2/

Two clubs, Newcastle United (owned by a FCW) and Crystal Palace (small club) have been valued on the basis of their 2018 accounts as they have taken advantage of an allowance by the Chancellor to delay publishing their accounts.

I'm suprised Watford has a higher value than the Albion.
Pray tell

 

[Bozza]

It's more to do with Burnley's ability to generate profits every year, relatively high season finishes (which generates extra prize money) compared to their wage bill and having little debt on the balance sheet.

We went round this particular block last time, and whilst I agree with the sentiment on Burnley's excellent operating model, I still don't think that would translate to Burnley attracting a higher value on the open market than many of the clubs you rank below them.

Maybe that's not the interpretation of "value" that I should be taking here.

 

[El Presidente]

We went round this particular block last time, and whilst I agree with the sentiment on Burnley's excellent operating model, I still don't think that would translate to Burnley attracting a higher value on the open market than many of the clubs you rank below them.

Maybe that's not the interpretation of "value" that I should be taking here.

Intuitively I'm with you 100%.

The model is based on the business model of the club. Burnley's is to make a profit every year and they deliver on that. The Albion's model is to keep losses to a reasonable level until the investment in the academy and training facilities starts to pay dividends in terms of transfer fees in (having to pay fewer as using academy step ups) and out (selling players at profits, which are fairly low by PL standards).

 

[AmexRuislip]

Maybe that's not the interpretation of "value" that I should be taking here.

You could always direct the other PL clubs to purchase players through the Amazon link on NSC, so the forum could benefit from selling on profits

 

[Bozza]

I'm suprised Watford has a higher value than the Albion.
Pray tell

Wonder if it would be useful is [MENTION=31]El Presidente[/MENTION] could, if he is able/allowed, to post the actual calcs for each club. It would certainly be interesting to pick through how the differences come about.

 

[Bozza]

I'm suprised Watford has a higher value than the Albion.
Pray tell

Wonder if it would be useful is [MENTION=31]El Presidente[/MENTION] could, if he is able/allowed, to post the actual calcs for each club. It would certainly be interesting to pick through how the differences come about.

 

[Weststander]

Everton lost over £100 million in 2018/19, which explains their relatively low position in the table.

View attachment 122926

Moshiri may be wealthy, but boy Everton have been badly run. £485m spent in transfer fees alone in his tenure (seen mentioned on the website grandoldteam), which puts them in the same ball park as Liverpool and Chelsea. Yet a million miles away from a trophy or CL place.

 

[El Presidente]

Moshiri may be wealthy, but boy Everton have been badly run. £485m spent in transfer fees alone in his tenure (seen mentioned on the website grandoldteam), which puts them in the same ball park as Liverpool and Chelsea. Yet a million miles away from a trophy or CL place.

Just as well Everton are funded by someone wealthier than Moshiri

 

[AmexRuislip]

Wonder if it would be useful is [MENTION=31]El Presidente[/MENTION] could, if he is able/allowed, to post the actual calcs for each club. It would certainly be interesting to pick through how the differences come about.

Would be useful, as the Albion are owned by TB as a single entity, whereas Watford are owned by the Pozzo family circus together with Udinese and Granada.

 

[El Presidente]

Wonder if it would be useful is [MENTION=31]El Presidente[/MENTION] could, if he is able/allowed, to post the actual calcs for each club. It would certainly be interesting to pick through how the differences come about.

This is the formula used, it's broadly based on the PhD paper of Doctor Tom Markham, who is the guy in charge as SI Games, creators of the marvelous waste of time that is Football Manager.

It's not perfect, but was 99.9% accurate in the Arsenal buyout by Kroenke when to acquired Usmanov's shares a couple of years ago. In an ideal world I'd use it alongside DCF and EBIT(DA) multiples too, but don't have enough time unfortunately to do it for all clubs.

 

[Weststander]

Just as well Everton are funded by someone wealthier than Moshiri

Everton fans do get the old Kleenex out at the mere mention of Usmanov.

I'd be interested to read your last assessment of Everton and FFP, if there is such a report.

 

[Westdene Seagull]

You mean does the Amex land have an intrinsic value that in the future it could be sold and turned into a commercial business park with some mediocre retail outlets on it?

Isn't the land at Falmer still owned mostly by the council and rented to the club at £1 for 99 years ?

 

[Weststander]

Isn't the land at Falmer still owned mostly by the council and rented to the club at £1 for 99 years ?

Yes, 125 year lease from 2009, a £5.3m premium was paid to BHCC.

There might a small bit bought freehold off of Brighton Uni?

 

[Bozza]

This is the formula used, it's broadly based on the PhD paper of Doctor Tom Markham, who is the guy in charge as SI Games, creators of the marvelous waste of time that is Football Manager.

It's not perfect, but was 99.9% accurate in the Arsenal buyout by Kroenke when to acquired Usmanov's shares a couple of years ago. In an ideal world I'd use it alongside DCF and EBIT(DA) multiples too, but don't have enough time unfortunately to do it for all clubs.

View attachment 122928

Yeah, sorry - I know the formula from when this has been discussed before. I meant the specific calcs, ie real numbers instead of letters, club by club. It would enable the "why is club X worth more than Y?" to be self-answered.

 

[El Presidente]

Yeah, sorry - I know the formula from when this has been discussed before. I meant the specific calcs, ie real numbers instead of letters, club by club. It would enable the "why is club X worth more than Y?" to be self-answered.

Will see what I can do, will take a bit of time as the table is collated from individual worksheets on clubs. If I get a chance might upload my full spreadsheet onto Google Docs so people can pick up individual numbers and point out that my Excel skills are frankly shit.