Bedfordspurs
Arthur Rowe
You need to read the earlier posts
It was on reference to post declining signing Tielemans
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Daniel Levy - Chairman
- Thread starter Howard Webb
- Start date
It was on reference to post declining signing Tielemans
Bedfordspurs
Arthur Rowe
Your assuming we up the wage bill in your logic
I’m not
As it’s not income we have currently and we don’t work to a %, we work to a weekly pay number.
We earn more money doesn’t mean we’re gonna up everyone’s wages
And our players get paid more if they achieve more
Finney Is Back
Luka Modric
*Sigh*.... No, of course it doesn’t mean that we suddenly give everyone a 10% pay rise. Instead of that what happens is that we buy (e.g.) Semedo instead of Doherty and Skriniar instead of Rodon (just 2 random examples), the additional revenue creates the space on the wage bill. Unless Daniel Levy is blatantly telling lies on camera, the money coming in will all be reinvested in the football club. The £45m will be used to strengthen the club, not make profit (and then lose money in taxes on that profit).
SpurMeUp
Jimmy Cantrell
Those two examples illustrate why it will have an impact on the club. Those two players might have equated to us finishing top 4 and getting CL. So it is potentially highly significant?
Sitting on my porcelain throne using glory-glory.co.uk mobile app
Actually our run between Harry and Poch is the best run in the history of the club in terms of league finishes
Add in the 21 Cup QF, SF or Finals in the ENIC timeframe and the story looks very different.
The issue has been crossing the final hurdle, which repeatedly I've said cannot be all ENIC (yes, they can own some, but it's a it more than that when you look at the above).
Your tv rights comments contradicts itself, every streaming platform is fighting for more exclusive content, so here's the list
- New stadium matchday revenue (you forgot we haven't had a full season of full capacity yet)
- Naming rights deal
- NFL events (I very much doubt we changed the entire design of the stadium for a rental deal)
- TV rights increase
- Non football events
There is zero fudging way that adds up to £30 odd million a year (as opposed to WHL numbers)
But even if it did, you are still missing the point, that's potentially a certain amount of money other clubs don't have access to, so it either (if in Europe) supplements our football income or on a bad (non CL) year minimizes the impact.
brick on Levy all you want, but the stadium is huge buffer for the club once we get into full operation mode.
Finney Is Back
Luka Modric
Significant to the performance of the club on the pitch.... yes. Significant to the value of the club... not really (though if we can ensure we keep our UEFA coefficient high over the next few years and become a CL ever present then perhaps....)
Finney Is Back
Luka Modric
You need to read my post. I never said it adds up to £30m.
New stadium revenue.... already factored into our asset value.
Naming rights deal.... £15m per season (assuming Levy gets off his high horse).... isn’t going to significantly alter our asset value (and is probably already factored in).
NFL events. Equals about £5 to £10m a season.... already factored into our asset value.
Non football events.... Maybe £20 to £30m a season.... already factored into our asset value.
TV rights increases.... As I said before, only if the anticipated streaming boom happens (this one is the biggie that I think all club owners are waiting for to pump the value of their asset).
It is only the last one (and also potential for monetisation from social media) that will substantially increase the value of THFC from where it is now.... Or of course lots of success that brings in new fans and increases the sponsorship revenue (Chelsea’s approach if you like).
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I think the NFL one is where we will have to agree to disagree, there is something more there.
From the changing rooms, to the pitch to the media facilities, a lot in this stadium was done specifically to accommodate NFL, I really don't see that output for the numbers you are estimating.
Bedfordspurs
Arthur Rowe
I cant see how events like the NFL or concerts can be factored in a valuation when there has been no benefit of note added to the balance sheet to show it in ££ terms
I agree it will do over time though but it needs to be seen to be valued
Finney Is Back
Luka Modric
We get a (not particularly large) flat rental fee per game plus the catering and merchandising profits (which are reasonable). I suspect the profit is towards the lower end of my £5m to £10m estimate.
Finney Is Back
Luka Modric
Very easily.... THFC are licensed to host up to 16 non THFC football events per year with 6 of those allowed to be music concerts. The fact that the club has already done various deals for rugby, NFL, concerts and boxing means that we have a very good idea of the income that will be brought in by this revenue stream.
As soon as we were granted a license for 16 non football events, ENIC would’ve calculated the likely income and applied it to what they feel is the value of their asset.
Bedfordspurs
Arthur Rowe
Yes we will have
I mean an independent view of the clubs value
When people asses value (as you do for a living I think) you need actuals and forecasts
But the football rich from Deloitte list doesn’t factor in income that hasn’t materialised and that’s used weirdly as a bench make on clubs value
SpurMeUp
Jimmy Cantrell
Why the fixations on valuations? Valuations are arbitrary anyway. Whether a stock is in fashion or backed on Reddit is just as important as an accountants calculations. Or whether a private individual like the Spotify billionaire is willing to exercise his dream.
Hopefully enic are less fixated on such academic exercises and are focused on running the day to day of the club.
Sitting on my porcelain throne using glory-glory.co.uk mobile app
Hopefully enic are less fixated on such academic exercises and are focused on running the day to day of the club.
Sitting on my porcelain throne using glory-glory.co.uk mobile app
Finney Is Back
Luka Modric
If I’m buying an asset.... yes... I will have to consider both actual and forecast revenue and take a punt on how accurate I think the forecasts are.... if I own an asset though then my valuation will factor in (what I believe to be accurate) forecasts.
Finney Is Back
Luka Modric
It was just a discussion, not a fixation. I think it started with a fanciful idea that ENIC might dilute their stake and make equity available for a liquidity injection onto our balance sheet. The question then came about as to how the club might be valued if that scenario was to materialise. There are those on here who feel that there is a lot of upside on the asset value that will come from naming rights and extra events and others who feel that these would already be factored into the asset value and it is only an event like broadcasting revenues significantly jumping due to the streaming market that would significantly increase the asset value.
SpurMeUp
Jimmy Cantrell
Name a figure. Obviously depends on what valuation you put on the club as to whether the future benefits of the stadium (and streaming) are factored in.
Sitting on my porcelain throne using glory-glory.co.uk mobile app
Bedfordspurs
Arthur Rowe
Exactly
The club will value it at one level
A buyer possibly another
An independent again different
Bloodyhell - that's a hard one....
I would say something like £1.5 billion factors in the anticipated 'known' revenues (stadium, extra events, NFL, potential for a realistic naming rights deal, current broadcasting revenue and recent trends along with our £1.4b+ of gross debt) with there being a fair amount of padding there for the potential of increased revenue from streaming/social media monetisation.
Quite telling that Daniel Ek's bid for Arsenal was £1.8 billion (similar sized stadium, similar revenues, larger current fan base, a (seemingly) more prestigious asset, and vastly lower gross debt than THFC). Though it is also telling that Kroenke rejected this offer out of hand. I think at present PL club owners think the streaming/social media revenue will be huge in (say) a decade's time. In the interim I think sales of football clubs are only likely to occur if owners get into money trouble. Though once the promised land of streaming/social media revenue arrives I still don't really see how owners can make a profit out of running a club (other than through selling up and realising the asset price increase) as clubs would still need to be operating near the top of the pile to gain/maintain fan interest and that will see the clubs competing with each other by spending more and more money on transfer fees and wages.
Of course the key to any good investment is knowing when to get in and when to get out. ENIC certainly got in at a good time. I'm sure they will get out at a good time as well, they are run by very clever men. My thoughts are that somewhere around the 5th year of large growth in streaming revenues might be the sweet spot here. The potential of this growing forever will still be priced into the asset values and the transfer fees and wages may not have initially kept pace with that steep growth. As the revenue growth starts to slow and the fees and wages catch up then we may start to see the trend slowing and the same level of upside is unlikely to be priced in. That's just my opinion though, it could be that this revenue stream is still growing at a massive rate a decade or more after it initially booms or that something completely new comes along that we haven't even considered yet that blows existing revenue streams out of the water. There is also the fact that the World's population is growing at a fast rate and the World is becoming a smaller place so that clubs can attract far flung fans on a much wider scale (as things like streaming and social media will hugely enable, especially with the ability to get online improving in every single far-flung corner of the World).
I actually tried to put a consortium together to buy Leeds many years ago. I thought that football as an entertainment business was still vastly undervalued and the upside for a reasonably big one club city was large. I hadn't factored in the potential for streaming and the World becoming smaller back then and couldn't raise enough capital from private investors to make a go of it. I think if I had considered that and made it part of the pitch then I may well be sitting here today running Leeds, almost as rich as Daniel Levy.... Oh for a time machine!... Though I'd probably have a bunch of Leeds fans griping about how much I had got wrong at the club just as happens on here with Levy.
Mate, you often make good points but careful with the bias (your dislike for current administration), for above
- There is ZERO chance anyone considers the Scum stadium a more prestigious asset vs. Tottenham Hotspur stadium, if you think I'm being biased go do a search on youtube/media on top stadiums in Europe .. one is always there, the other barely makes the list.
- You rate Spurs at £1.5B (see point above) but acknowledge the rejection of £1.8B for scum? asset value having nothing to do with debt here
- I've never understood the thinking behind ENIC is planning an exit strategy? 20 years later? when the asset is finally worth something? they could have made 10X return a decade ago.
If you want to look at Sport potential you need to look at the US market, smaller, less viewership numbers yet their top 3 sports make stupid amounts of revenue, build a similar model plus the global attraction of football you will realize we haven't reached anywhere near peak.
Finney Is Back
Luka Modric
Sorry, I don't think I am displaying any bias at all.... There is nothing in my post that points at a dislike of the current administration, if that is what you see then I think you are trying to find that. I was simply trying to make a completely dispassionate valuation of THFC.
I think if you were to ask 100 people (with no affinity to Spurs or Arsenal) which of the two sporting institutions was the more prestigious to own then more than 50 of those people would say Arsenal. I don't like that being the case and get no joy out of it, I just think that reflects reality.
Yes, I value Spurs at £1.5 billion and Arsenal at more than £1.8 billion. Arsenal do not have £1.4 billion of gross debt on their books. Arsenal also have a considerably larger number of supporters than we do (and thus more potential to realise increased commercial revenue). If you believe that having a level of gross debt that is more than 3 times larger than turnover has no bearing on the asset value of a company then please can you explain how that is as it is the inverse of everything that I have experienced throughout my business life. Additionally if the vast increase in the valuation of football clubs is likely to be driven by broadcast revenues (as I think you believe will be the case) then the stadium that a club operates in becomes less and less of a factor. It would actually likely be a far better investment for me to buy (e.g) Saudi Sportswashing Machine or Leeds or Aston Villa for a fraction of the purchase price of Spurs or Arsenal and then I could sink the rest of the money into players, vastly increasing the likelihood of on pitch success that in turn would drive more interest and fans and then improve commercial revenues and the number of streaming viewers.
Any investment company will sell when they believe the value of their asset is no longer growing at a higher rate than they could achieve by putting their money into another asset. This is no slight on ENIC, I have owned a majority stake in many assets over the years and disposed of them when I felt the value was no longer there, that is just business. You do not (well I certainly do not) choose to sell and asset after it has made you a specific amount of money, instead you sell an asset when you believe the money that you will realise by selling that asset can be put to better use in another investment. Surely you understand that? If I were lucky (or I guess I should say had the foresight) to own an established premier league team right now then I wouldn't sell it unless I felt the bid I received factored in more than I perceive the future value of streaming/social media income increases to be (or more prudently if I felt I could take that money put it into a different industry (or even a different business in the same industry) and it would make me a bigger return) Those numbers can only be forecast right now. I'm factoring in the fact that our fanbase will mean we would be about 6th in line in England for this revenue. At my £1.5billion valuation this means that ENIC have a paper profit of about £1.3billion from their investment in Spurs (based on £45m purchase price and them owning 90% of the club. That is a return of 29 times on their original investment, with growth like that you're not going to sell are you?.... well at least not until you think the growth is done/slowing/lower than something else that you think is a sure thing.
US sports make a huge amount of revenue because they do not have anywhere near the same number of professional clubs as there are in football. Every single person in the US (and beyond) has a single NFL team that they follow, whereas there are literally thousands of professional football teams dotted around the planet. The US leagues are close to having a monopoly on American football, Basketball and Baseball. Football instead has many different countries selling their product and even different divisions in the same country selling their product and then the regional associations such as UEFA also selling their product. This puts football in a weaker position than the US franchised sports.
It's easy to pick apart somebody else's valuation of an asset mate. Much harder to provide your own valuation to be picked apart. People's ideas also tend to change when real money is suddenly involved. I've put together umpteen proposals to buy businesses and been told that I have seriously undervalued the asset, only for those same people who have told me that I have undervalued the asset to find various reasons not to put up funding for the deal when it became time to p!ss or get of the potty.
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