Wolves are for sale and Darlo wants some smooth thighs

[Paddingtonwolf]

I see it more like a commodities market.

Imagine a football club is like a precious metal, and the top rated metals have a much higher value per ounce, but the valuations are re-assessed each May. If I own one of the top rated metals (let's call it Villarite) I want a value to reflect that status. However a buyer looking at the market and seeing a reasonable chance that the re-assessment upcoming will mean a drop in value isn't going to want to pay the top rated value.

And on top of this, there is conveniently a league table for football clubs to allow you to clearly track the likelihood of a May re-assessment.

 

[Johnny75]

I see it more like a commodities market.

Imagine a football club is like a precious metal, and the top rated metals have a much higher value per ounce, but the valuations are re-assessed each May. If I own one of the top rated metals (let's call it Villarite) I want a value to reflect that status. However a buyer looking at the market and seeing a reasonable chance that the re-assessment upcoming will mean a drop in value isn't going to want to pay the top rated value.

And on top of this, there is conveniently a league table for football clubs to allow you to clearly track the likelihood of a May re-assessment.

That makes far more sense. I guess when that sort of reasoning, and I'm guessing this is what dictates the multiplier, is behind the initial valuation then the assets of the business play out as any other.

 

[Penk Wolf]

I think most clubs will be valued based on their assets and then a huge goodwill payment for being a Premier League team.

 

[Deutsch Wolf]

I think what we can say, as it's been over three months since we were put up for sale and we have no concrete news of anything whatsoever, is that Morgan isn't interested in just taking the first offer, be it £30m back or just whatever he can grab. There is a reasonable amount of due diligence on our part so for now at least it seems likely that we aren't going to be thrown into turmoil by being handed on to some absolute chancer.

Not much has changed for me since September, although the club is in a healthy off field position in many respects, we aren't prime selling material at the moment which is a problem. At one end of the scale we don't have Premier League status whereas numerous clubs that are at least nominally up for sale do, and at the other end of the scale we (presumably) aren't available to pick up for relative pennies, which numerous other clubs in this league are (although you would have problems to sort out upon arrival). So I still don't expect anything to change in the short term, if people want to believe hogwash stories about Chinese billionaires then that's up to them. I also have some magic beans for sale which they might like to have a look at.

 

[Paddingtonwolf]

When Morgan paid £30,000,010* we were a second tier club on the edge of the promotion race. We owned our ground, and had a long lease on the land on which it stood. We had a decent training ground complex, but not the absolute best.

Now Morgan wants to sell, we are a second tier club on the edge of the promotion race. We still own our ground, which has a new stand that doesn't significantly alter the valuation of that particular asset, and have improved the training ground complex and academy facilities.

There really isn't that much change in the assets to suggest a great change in the overall valuation, bar a bit for inflation and changes in the valuation of the squad maybe. I really doubt the low likelihood chance of being part of next year's TV deal is actually going to raise the valuation of the club in the eyes of any potential buyer. If we were 15 points clear at the top maybe, but then I doubt Morgan would be selling.




*which he did, no matter what the nay-sayers say.

 

[thehistorymakers]

Strangely enough we have the same potential and therefore value as any other club that has gates that average 18K on normal days, up to 28K on promotion chasing, inside the top six type days and up to 33K on celebration days. Potentially we are no different to debt ridden Bolton. Thankfully Moxey hasn't been allowed to spend money we haven't got. I guess the value is what gets agreed between the two parties but I suspect he'll want his £30M back.

We haven't averaged 18,000 for over 20 years. The first 2 years in the PL, we averaged over or near our then capacity of just over 28000. The 3rd season there was ground development, which knocked it down to just under 25000. This on a back drop of losing most weeks and fighting off relegation. For the big matches we would have easily got over 35000 or more.
Over the last 20 years we have always averaged over 20000, including many years of over 23 and 24000 in the championship. We averaged over 21000, the year we went down to div 1. We averaged nearly 21000 in div 1.
Since reliable records began , postwar in 1949, I think we have only averaged about 6 times a lower league average attendance than Albion. That is even when they been in higher leagues.

 

[nimrod]

I don't think it's particularly logical to apply a PE multiple to a football club. If you did you'd really have to be applying differential PE multiples to different income streams. So you could apply a much lower one (or ignore altogether) revenues from sales of players. Otherwise you end up with a club that's sold it's best players being valued at a much higher value than one that's kept theirs simply because it's transferred that value to P&L. A club that regularly develops and sells players at a profit could argue that it has regularised transfer income but how many can really say that, and applying a PE value to it is effectively treating it like a perpetuity.

Even an asset basis (as per Penk above) would need to be looked at with caution depending on the circumstances of the club. A club may have hard assets of value but also be locked into substantial contracts that effectively means it is bankrupt, so it's value could be much less than its hard asset value.

 

[Paddingtonwolf]

Okay. But how does that change the valuation of a club particularly?

Assuming, for the purposes of this, both Albion and ourselves have a ticket price of £25. (Bear with me)

Our ticket income would be 25 x 22,000 x 23 (£12.65m)
Theirs would be say 25 x 20,000 x 19 (£9.5m)

However, their TV Income is £80m say, and ours is £5m.

The extra 2,000 bums on seats don't mean a jot in terms of valuation.

 

[Papper]

We haven't averaged 18,000 for over 20 years. The first 2 years in the PL, we averaged over or near our then capacity of just over 28000. The 3rd season there was ground development, which knocked it down to just under 25000. This on a back drop of losing most weeks and fighting off relegation. For the big matches we would have easily got over 35000 or more.
Over the last 20 years we have always averaged over 20000, including many years of over 23 and 24000 in the championship. We averaged over 21000, the year we went down to div 1. We averaged nearly 21000 in div 1.
Since reliable records began , postwar in 1949, I think we have only averaged about 6 times a lower league average attendance than Albion. That is even when they been in higher leagues.

Yep, I was just throwing in lose figures but you cannot really value on potential. What would Bournemouth have been valued at twenty years ago when they were bottom of League 2.

 

[thehistorymakers]

Yep, I was just throwing in lose figures but you cannot really value on potential. What would Bournemouth have been valued at twenty years ago when they were bottom of League 2.

Ok, no problem.

 

[Deutsch Wolf]

Yep, I was just throwing in lose figures but you cannot really value on potential. What would Bournemouth have been valued at twenty years ago when they were bottom of League 2.

Bournemouth aren't really worth a great amount now. Tiny ground, saturated catchment area, poor training facilities, as soon as they get relegated then they're not even one of the top 15 most valuable second tier clubs - again, unless you fancy taking the parachute money for yourself.

 

[Papper]

Bournemouth aren't really worth a great amount now. Tiny ground, saturated catchment area, poor training facilities, as soon as they get relegated then they're not even one of the top 15 most valuable second tier clubs - again, unless you fancy taking the parachute money for yourself.

If they survive and there is a good chance they will the TV revenues/audience bring more value than bums on seats. There is no reason (if the footballing acumen is there) that the club shouldn't become a steady PL outfit. It's all about the football acumen - which we don't have.

 

[Deutsch Wolf]

They won't, not in the long term, for the same reasons that Wigan didn't.

 

[Paddingtonwolf]

True - but how do you crystallise the value of the TV money without removing it from the club? And if you do that, and other teams don't then your squad is unlikely to be strong enough to stick around as a bigger TV deal simply means spend more to stay still.

 

[nimrod]

Isn't the only investment value you can attribute to a Championship club its ability to become an established Premier league club. I can't imagine there's been much if any return paid out to owners for investments they've made over the years. Even clubs that have flirted with the Premier League for a few seasons have probably ploughed all that income they've received back in trying to stay there or been relegated and have done the same on the division lower.

All an owner at this level can do is set a buy in price he hopes someone will pay to take on the challenge of achieving the established Premier League status.

 

[Derby Wolf]

If they survive and there is a good chance they will the TV revenues/audience bring more value than bums on seats. There is no reason (if the footballing acumen is there) that the club shouldn't become a steady PL outfit. It's all about the football acumen - which we don't have.

As I understand it with Bournemouth they really are limited for expansion and certain revenues will always be small. They could become like Southampton in the 90's whilst at The Dell and tot along but but I don't think there is much scope for them moving to a St. Marys or developing the youth system Southampton have in the last decade, if that TV money becomes the clubs life blood if they were then relegated it could end horribly, far more damaging than other clubs recently relegated.

 

[Paddingtonwolf]

Bournemouth could move out of town and build a 35,000 seater, but they won't suddenly attract a fanbase on Southampton and Portsmouth's doorstep.

 

[loonsewolf]

True - but how do you crystallise the value of the TV money without removing it from the club? And if you do that, and other teams don't then your squad is unlikely to be strong enough to stick around as a bigger TV deal simply means spend more to stay still.

Well investing in the academy and training facilities would be a limited way of turning that TV money into a fixed asset. But how many people buy a football club thinking to make a profit in the first place?

 

[Papper]

Bournemouth could move out of town and build a 35,000 seater, but they won't suddenly attract a fanbase on Southampton and Portsmouth's doorstep.

More important to them is cash flow and an ability to attract players. That first year is vital. It's not a bad area to live and work - far better proposition than Wolves. As long as the football brains are there I think they are sustainable. Mind you, that can be said for any club. I suppose I'm trying to say there is no correlation these days between success and bums on seats. You could have state of the art facilities and still end up playing anti-football.

 

[Derby Wolf]

Bournemouth could move out of town and build a 35,000 seater, but they won't suddenly attract a fanbase on Southampton and Portsmouth's doorstep.

According to football ground guide they looked at that and have now returned to the prospect of expanding Dean Court to just 18k so I would imagine it was unfeasible or just too far out of town.

After looking at the feasibility of constructing a new stadium, the Club are now looking again at expanding Dean Court. The number of seats could be increased to 15,000 by building a larger and more permanent Ted MacDougall Stand at the South end of the ground. In addition the corners of the stadium could also be filled with seating, to further boost the capacity to 18,000. However no timescales have been announced as to when this might take place.