The Athletic - Valuation of Everton Football Club

[Blue peter]

So they shouldn't report this because we happened to get a new owner? Has it occured that they have other readers besides Evertonians?

Yes it has but what football supporter would find this report useful or informative? (regardless of who they support).

I don’t find it useful but maybe you’re right and there are some others that do (including Evertonians) but I have no idea why they would. Do you find it useful? If not do you know why others may find it useful?

 

[JobForTheMoyes]

Brighton are valuable as they have some of the best football operations in the entire industry. It’s not just about stadiums.

 

[Blue peter]

Brighton are valuable as they have some of the best football operations in the entire industry. It’s not just about stadiums.

It’s about the 1) the balance sheet = value of assets (stadiums / land / training ground / squad value inc amortisation etc) vs liabilities (debts) and then 2) the P & L (turnover or revenue)….all of these factors combined determine a club’s value.

The latter of course is determined by commercial performance and footballing performance (match day incomes, league positions achieved, cup runs, other appearances)

 

[pfim]

It’s about the 1) the balance sheet = value of assets (stadiums / land / training ground / squad value inc amortisation etc) vs liabilities (debts) and then 2) the P & L (turnover or revenue)….all of these factors combined determine a club’s value.

The latter of course is determined by commercial performance and footballing performance (match day incomes, league positions achieved, cup runs, other appearances)

Book value of assets has nothing to do with the valuation. This is an enterprise valuation so its based on market value of equity + debt (market value of assets) - cash.

There are several ways to estimate the market value of the assets, but most are based on future cash flow projections.

 

[DaChunk]

I'll wait for the Esks valuation thanks.

 

[Blue peter]

Book value of assets has nothing to do with the valuation. This is an enterprise valuation so its based on market value of equity + debt (market value of assets) - cash.

There are several ways to estimate the market value of the assets, but most are based on future cash flow projections.

So like most businesses which are revenue based, you can’t just ignore the value of a stadium owned by the club in its valuation which is why I suggested the combination of both.

If for example, our revenues were only as they are now, circa £190m future cash flow projections say for three years are £570m, are you saying that despite us owning a £750 million pound asset that wouldn’t be taken into account?

I’m by no means an expert but that wouldn’t make sense.

 

[pfim]

So like most businesses which are revenue based, you can’t just ignore the value of a stadium owned by the club in its valuation which is why I suggested the combination of both.

If for example, our revenues were only as they are now, circa £190m future cash flow projections say for three years are £570m, are you saying that despite us owning a £750 million pound asset that wouldn’t be taken into account?

I’m by no means an expert but that wouldn’t make sense.

How is the stadium worth 750 million pounds? What is its value? If we put it on the market today, would we receive that? If we took it apart for scrap and sold it, would we receive that? The answer to both is no.

If it's value was truly 750 million pounds, Moshiri wouldn't have needed to go to fraudsters to finance it.

Yes it sits on the balance sheet as the capitalized cost of building (construction), but that is not its value.

The stadium is worth the cash that it generates. Nothing more or less.

 

[Makis]

Yes it has but what football supporter would find this report useful or informative? (regardless of who they support).

I don’t find it useful but maybe you’re right and there are some others that do (including Evertonians) but I have no idea why they would. Do you find it useful? If not do you know why others may find it useful?

I thought it gave some ball park numbers. You get the same stuff for big European clubs, and American sports clubs you can also find valuations for. For some reason people like to know stuff like this.

You could say the same about player valuations. Why are people interested to know that a certain player is valued at 30 million?

 

[allen]

The stadium is worth the cash that it generates. Nothing more or less.

I’ll be sure to inform my mortgage lender of this, since my house generates zero cash.

 

[Neiler]

Be interesting to see it this time last season and this.

But if a speculative peice really, wouldn’t sweat it.

 

[pfim]

I’ll be sure to inform my mortgage lender of this, since my house generates zero cash.

Your house is not a business asset, I would assume.

 

[Moomin]

Be interesting to see it this time last season and this.

But if a speculative peice really, wouldn’t sweat it.

People can't see past the initial image and want to be angry about it.

If this piece was done again in 2 years time when we have the figures for the new stadium etc our value will be around the billion mark.

 

[chicoazul]

Evertonians overvaluing Everton laid bare.

Everton are small fry wasters.