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The last 2 years have been astonishing. Great football, goals galore, we all know the story. We're on the up - it is brilliant!
And yet, it is an absolute mystery to me how we are suddenly worth £250m. It seems totally crackers.
We make a massive loss, year after year Our wages alone are very close to 100% of turnover And we're a relatively small operation. £22m turnover last year, maybe about £30m this?
Asset wise, our playing squad is worth what? Perhaps £50m, and that's giving generous valuations to Davis, Chaplin, Burns, Woolf, Hirst etc. And if we sold them we need to replace them, obviously We don't own our ground Lots of investment is still required, including a new stand
If and when we go up, we'll have to spend to compete The bizarre financial rules of The Premiership mean we can't spend, spend, spend as they will then dock points. So it will be hard to compete
I'm delighted people want to invest, it is fantastic, and I totally get the excitement of what is potentially ahead. But I sure don't get the valuation!
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£250m + valuation. A mystery to me on 11:30 - Mar 24 with 4276 views
the valuation may not be based on an actual value but what people perceive we are worth.
3 years ago the perception of our value was £40mill which is what was paid. 3 years later are a league higher, have 10k more people in the stadium each game, have sold deck loads of merchandise, have a team with an increasing value and look like we could be about to step up a league again.
people now perceive we are worth £240k or thereabouts
Well supported English Professional football club with good heritage and huge catchment. On that measure alone we are probably are probably the 12th - 15th 'biggest' football club in England.
There aren't too many of those and they are not making any more of them.
[Post edited 24 Mar 11:32]
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£250m + valuation. A mystery to me on 11:36 - Mar 24 with 4203 views
At the risk of being overly simplistic it’s a bit like property in that it’s worth what someone is prepared to pay for it.
The new investors have presumably done their due diligence and are happy with the valuation, which is what counts I guess. The club is certainly worth a lot more than when Evans was allowing it to rot but I must admit the increase in perceived value is remarkable over such a short period even allowing for the turnaround in our fortunes on the pitch.
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£250m + valuation. A mystery to me on 12:14 - Mar 24 with 4003 views
It’s gone a bit nuts. In the mid-2010s average PL clubs were selling for about £30-£100M (Everton £85M in 2016, Wolves £45M in 2016, Leicester £39M in 2010, Newcastle £ 134M back in 2007. Roll forward to now and Newcastle is £300M and Everton £550M.
Mind you WBA were recently valued at £68M when they had a majority takeover, so I’d have expected us to be similar. £250M is some sales pitch wizardry from the owners/Ashton. I just hope it doesn’t lead to unrealistic expectations for their return on investment which leads to asset stripping. Ultimately though, we’re worth what people are prepared to pay, even if it seems like a massive over-evaluation (is there some tactical goings on here to get around FFP?).
Yep, it’s absolutely ludicrous by normal standards and just about any other industry. But it’s football, where common sense and ‘normal standards’ don’t appear to apply.
The comments about revenue growing opportunities are valid to a degree, but in achieving those, so too does the cost base increase. At least it has to if you want a chance of the revenues recurring medium to long term. Not to mention the fact that valuing a business on a multiple of revenue is of limited appeal. Typically, and more so at the moment, profitability is a more important lens. As it stands we’re losing something in the region of £15m a year give or take. There’s potentially a pathway to profitability IF we get to the premier league, but a huge chunk of the additional revenues that will come would be eaten up by increased operating costs. It’s rare to find a similarly sized club as ours that’s operating sustainably and profitably in the premier league. It’s not impossible, but certainly the exception rather than the norm. Most will post bigger losses than us.
Those that do typically achieve it not through PL money per se but through player trading. Ashton has spoken quite candidly about that, and it’s something I would only see is leaning harder into. Investing fees on young (ideally under circa 24) players with a high ceiling. Davis, Al-Hamadi, Clarke potentially, Hirst etc. it’s very rare for us to meaningfully spend fees on players who don’t meet that criteria and I would anticipate that to continue. At some stage when the money is right we will also sell, and Davis might be the first proof of that concept.
It’s not where I would invest £105m if I had it, not if your primary motivation is to get a financial return, but as I said it’s football. The industry is a complete outlier on so many levels.
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£250m + valuation. A mystery to me on 12:56 - Mar 24 with 3723 views
£250m + valuation. A mystery to me on 12:20 - Mar 24 by SitfcB
Revenue going up = valuation goes up
That’s what Mike O’Leary said.
Interesting that Bristol C were easily top of the commercial revenue in the latest accounts released, at about £20M per year. That’s nuts in this league. It’s clear they want to go down the same route here with the redevelopment by SAR and the Portman Road car park. All of these things are going to add up and obviously make us an attractive investment.
£250m + valuation. A mystery to me on 12:50 - Mar 24 by Swansea_Blue
It’s gone a bit nuts. In the mid-2010s average PL clubs were selling for about £30-£100M (Everton £85M in 2016, Wolves £45M in 2016, Leicester £39M in 2010, Newcastle £ 134M back in 2007. Roll forward to now and Newcastle is £300M and Everton £550M.
Mind you WBA were recently valued at £68M when they had a majority takeover, so I’d have expected us to be similar. £250M is some sales pitch wizardry from the owners/Ashton. I just hope it doesn’t lead to unrealistic expectations for their return on investment which leads to asset stripping. Ultimately though, we’re worth what people are prepared to pay, even if it seems like a massive over-evaluation (is there some tactical goings on here to get around FFP?).
[Post edited 24 Mar 12:51]
Doesn't a lot depend on trajectory and debt as well? I don't know about West Brom's debt and structure but were they heading towards a probability of becoming a Premier League club when they were sold? Were they under an ownership that wanted to offload them or one that was already investing and looking to grow them?
There is little to asset strip at Town. Ultimately, if the project goes wrong, the biggest assets are the playing contracts and "selling" the players. That, without the investment to replace them becomes a downward spiral that decreases the value of the asset. Gamechanger had a clear plan of investing to turn Town into a Premier League club and sell at top dollar once there. The big question will be what that selling step leads to. I don't see much potential for making profit in the Premier League other than selling to a rich owner. Do Arsenal and Man Utd break even? How many other clubs do? Do any make a profit at all?
£250m + valuation. A mystery to me on 13:05 - Mar 24 by Nthsuffolkblue
Doesn't a lot depend on trajectory and debt as well? I don't know about West Brom's debt and structure but were they heading towards a probability of becoming a Premier League club when they were sold? Were they under an ownership that wanted to offload them or one that was already investing and looking to grow them?
There is little to asset strip at Town. Ultimately, if the project goes wrong, the biggest assets are the playing contracts and "selling" the players. That, without the investment to replace them becomes a downward spiral that decreases the value of the asset. Gamechanger had a clear plan of investing to turn Town into a Premier League club and sell at top dollar once there. The big question will be what that selling step leads to. I don't see much potential for making profit in the Premier League other than selling to a rich owner. Do Arsenal and Man Utd break even? How many other clubs do? Do any make a profit at all?
Not sure about WBA. In our case ME was looking to offload us, and excepted £40M and wrote the debt of himself didn’t he. In hindsight that looks like a blindingly good piece of business by Gamechanger as well.
£250m + valuation. A mystery to me on 12:20 - Mar 24 by SitfcB
Revenue going up = valuation goes up
That’s what Mike O’Leary said.
It's really easy to have a commercial organisation with lots of revenue. Less easy to actually make a profit.
If ORG had wanted to put in another £105m they could have chosen to. The fact is, they're sellers at that sort of valuation rather than buyers. I don't blame them. I can't see that ITFC is worth more than a quarter of a billion pounds.
Investment in the club is in principle a good thing, but there is a part of me that worries about this. An entity with no emotional attachment to the Club has poured in a nine figure sum. They will want a return on that money. Naturally. Either they think some ultra rich playboy will come along and value Town at a higher level as a toy/status symbol, or they think it can turn a consistent and substantial profit over an extended period. The former scares me, and the latter is a punt. How many teams have made consistent profits year after year, even in the Prem?
If we go up, and stay up for a decade, there is a chance of making some kind of return. And I very much hope this is what happens. If this investment doesn't yield a return for them, I wonder if they will be as considerate with their exit strategy as Evans was.
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£250m + valuation. A mystery to me on 16:27 - Mar 24 with 3065 views
£250m + valuation. A mystery to me on 15:33 - Mar 24 by giant_stow
Nothing to do with me, so apologies, but I wonder what the price would have been for a 100%? Much lower is my guess.
Probably. As Nthsuffolkblue said, it’s going to be a a higher value on the up and especially when it’s a ‘we’ve got this, come and join us’ pitch. I didn’t realise we’d be valued this high any time soon though, especially as we don’t own the ground (although we may as well do; the council won’t pull the plug on it).
The key phrase in this is 'up to £105m'. They haven't put that much in for the 40% yet. They may do over the next few years, as funds are required. But it doesn't arrive all at once.
So the £260m is a notional value at some point. But it's purely hypothetical in the here and now.
£250m + valuation. A mystery to me on 15:54 - Mar 24 by HighgateBlue
It's really easy to have a commercial organisation with lots of revenue. Less easy to actually make a profit.
If ORG had wanted to put in another £105m they could have chosen to. The fact is, they're sellers at that sort of valuation rather than buyers. I don't blame them. I can't see that ITFC is worth more than a quarter of a billion pounds.
Investment in the club is in principle a good thing, but there is a part of me that worries about this. An entity with no emotional attachment to the Club has poured in a nine figure sum. They will want a return on that money. Naturally. Either they think some ultra rich playboy will come along and value Town at a higher level as a toy/status symbol, or they think it can turn a consistent and substantial profit over an extended period. The former scares me, and the latter is a punt. How many teams have made consistent profits year after year, even in the Prem?
If we go up, and stay up for a decade, there is a chance of making some kind of return. And I very much hope this is what happens. If this investment doesn't yield a return for them, I wonder if they will be as considerate with their exit strategy as Evans was.
I have no idea what an exit strategy is if things don't go well.
A fire sale, so sell the players, sell the training ground for housing? They wouldn't get much.
It feels like a one way bet that things go well. And at the moment there is a lot to like! But it could be a bumpy ride.
[Post edited 24 Mar 17:37]
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£250m + valuation. A mystery to me on 18:03 - Mar 24 with 2725 views
The new investors obviously see how far we have come and given the plans for the club what may be achieved. I was concerned initially about the £105 million as I thought that Gamechanger were after a quick buck on their original investment. But it appears not the case as Mark Ashton has said it will help the club go forward for the next five years. Presumably split into the training facilities, new players and the new stand. Should we achieve Premier status there will be several out's and a similar quantity of in's player wise all of course taking into account fair play rules.
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£250m + valuation. A mystery to me on 18:16 - Mar 24 with 2678 views
No different to when we paid £1.5 mill plus add ons for davis.
It wasn't what he was worth specifically but more on his potential.
The club is definitely worth more than what it was a couple seasons ago. But the valuation firstly is based on a sum of upto 102 mill. Upto is the important bit It could be £20 mill now to help with training ground. £75 if we go up etc. And the rest later on etc.
£250m + valuation. A mystery to me on 19:25 - Mar 24 by Pinewoodblue
Is it just a coincidence that £105m is the amount you are permitted to lose over 3 years, £90m of which has to be raised from share issues.
Coincidence, I would assume. We're not in the Premier League yet anyway. The money is there to be be drawn down as required rather than in one lump, so assume will be used differently if we're promoted than if we stay down.
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£250m + valuation. A mystery to me on 19:32 - Mar 24 with 2398 views
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