Captain Dart
Well-Known Member
Can't speak for its accuracy, but worth a look.
CCFC worth - by lecturer in football finance Liverpool (6 Viewers)
- Thread starter Captain Dart
- Start date
Captain Dart
Well-Known Member
The graphics ...
Nick
Administrator
I'm on my phone so can't really see the images, how much debt is it referring to / taking on at that valuation?
Captain Dart
Well-Known Member
Wasn't that the upfront sum before other performance/transfer related bonuses.
chiefdave
Well-Known Member
All of it, its for buying the club (Otium) so all assets and all liabilities.
Nick
Administrator
Is that taking on the silly debt SISU claim or the actual debt OSB has worked out?
chiefdave
Well-Known Member
The £17m currently on the books. Think the rest is now converted to shares now so thats not still sat in Otium.
chiefdave
Well-Known Member
From how I read it he's saying the club as it is today is worth £1.1m. That's for everything including the £17m debt currently on the books.
So if you purchased the club for £1.1m you'd still have the debt.
The current debt is £17m. The rest got converted to shares after administration at the insistence of the football league. Those shares are essentially worthless.
So if you purchased the club for £1.1m you'd still have the debt.
The current debt is £17m. The rest got converted to shares after administration at the insistence of the football league. Those shares are essentially worthless.
Specs WT-R75
Well-Known Member
I also asked him about any payments from players we have sold, like Wilson and Maddison - he said they are not included, but as we know if we have ~20% sell on clauses then there could be substantial value in those contracts...
D
Deleted member 5849
Guest
...or nothing.
Sell-on clauses are a roll of a dice, really. If we look at how it stands atm, Wilson is seemingly made of glass, and Maddison hasn't progressed as hoped.
So the value of those clauses could be zero.
They're just a punt, a hedge... but you wouldn't rely on them.
chiefdave
Well-Known Member
Which is exactly why SISU are never going to accept an offer that involves future payments based on performance of the club.
D
Deleted member 5849
Guest
That indeed is true.
Not sure you'd be using them to bump up how much the club is worth either, mind you!
Sky Blue Harry H
Well-Known Member
Matchday income increasing next year ? (and the year after - no Ricoh?)
Grendel
Well-Known Member
Maguire is an idiot. He often comes into CWR and has done no research on the club a and often makes ridiculous statements.
He's assumed in this scenario I would think they their is debt associated with the purchase value.
Anyone with one brain cell knows the offer is never going to be accepted.
He's assumed in this scenario I would think they their is debt associated with the purchase value.
Anyone with one brain cell knows the offer is never going to be accepted.
cloughie
Well-Known Member
So you are expecting it to be accepted then
skybluetony176
Well-Known Member
Grendel
Well-Known Member
Surprised you haven't crawled into a hole with dadgad after your behaviour towards CCFC fans today.
the club only has a value if you want to sell it. Not sure Sisu want to sell it. Unless you offer silly money, which the latest chancers will not. So it's another dead end imo. Another thing, I can't see this club ever getting back into the Premiership. Not unless a billionaire takes us on. So submitting a bid including payments when reaching the Premiership is a bit far fetched imo.
John_Silletts_Nose
Well-Known Member
Kieran is not an idiot, far from it, but his analyses on CCFC is based only upon the financial statements and not based on the knowledge of what has gone into those statements based upon history and other factors. If it was Brighton then I know he would have all the work and details carefully prepared.
The best and most accurate financial analyses are provided by OSB. Unfortunately for OSB (and all of us) there are still gaps in our understanding of everything behind the figures on the paper as that level of detail is not provided.
The best and most accurate financial analyses are provided by OSB. Unfortunately for OSB (and all of us) there are still gaps in our understanding of everything behind the figures on the paper as that level of detail is not provided.
win9nut
Well-Known Member
I don't understand why he's done this piece at this point in time.
Is he trying to drive clarity and understanding? Because if he has he's failed miserably I'm afraid. He's gone way over the head of most of his target audience.
Is it to influence negotiations? I hope not because there doesn't need to be any further distractions. Hopefully by now Gary H and Joy S have got around a table and the last thing they need is for someone without all the facts putting their opinion in. The fact he's described as a football finance expert and is a professor could hold additional sway amongst the negotiators (one way or another)...
If anyone thinks I've gone off on one here, forgive me I'm tired and emotional. I want my club back. I don't want anyone getting in the way of that and in my opinion, people doing this just could.
And to top it off, his numbers will be off the mark too. How off the mark, who knows? What are his assumptions, are they the same as Tim Fisher's? Probably not. Why even muddy the waters?
Sorry Kieran
Is he trying to drive clarity and understanding? Because if he has he's failed miserably I'm afraid. He's gone way over the head of most of his target audience.
Is it to influence negotiations? I hope not because there doesn't need to be any further distractions. Hopefully by now Gary H and Joy S have got around a table and the last thing they need is for someone without all the facts putting their opinion in. The fact he's described as a football finance expert and is a professor could hold additional sway amongst the negotiators (one way or another)...
If anyone thinks I've gone off on one here, forgive me I'm tired and emotional. I want my club back. I don't want anyone getting in the way of that and in my opinion, people doing this just could.
And to top it off, his numbers will be off the mark too. How off the mark, who knows? What are his assumptions, are they the same as Tim Fisher's? Probably not. Why even muddy the waters?
Sorry Kieran
clint van damme
Well-Known Member
stopped looking when I saw that.
skybluesam66
Well-Known Member
stupid calculation - a football club is not a corner shop
a new owner will have 10000 customers 25 times a season - together with other revenues, generating maybe even in league 2 £4m of revenues a year
Success will increase those numbers
I would therefore expect the price to be in the region of at least 1 years revenue
if not why wouldnt sisu
Sell ryton
Sell all players with value
pocket season ticket money
and then sell/liquidate
a new owner will have 10000 customers 25 times a season - together with other revenues, generating maybe even in league 2 £4m of revenues a year
Success will increase those numbers
I would therefore expect the price to be in the region of at least 1 years revenue
if not why wouldnt sisu
Sell ryton
Sell all players with value
pocket season ticket money
and then sell/liquidate
robbiekeane
Well-Known Member
It's really much more simple than all of this crap.
The club is worth what SISU are willing to sell it for.
The end.
The club is worth what SISU are willing to sell it for.
The end.
skybluetony176
Well-Known Member
Unless SISU's expectations are so unrealistic that they're completely detached from reality.
See it all the time with classic cars. Quite often you'll see a restoration project that's a complete basket case in the small adds and they're asking more money for it than all the running, driving, ready to go adds for the same make, model and year.
What's that basket case really worth? What the day dreamer with his head stuck in the clouds says or is it what the market place and potential buyers dictate?
robbiekeane
Well-Known Member
There are two perspectives to look at it from - the buyer and the seller. Markets clear where buyer and sellers (demand and supply) meet.
To a buyer, the value of something is effectively the maximum that they will pay for it.
To a seller, the value of something is effectively the minimum that they will sell it for.
In this case, it's a sellers market - we have seemingly willing buyers and a pretty unwilling seller who has all the power, they are under no obligation, pressure, or rush to sell (unlike, say, a dairy farmer which is very much a buyers market alot of the time). The value is what they will sell it for.
oldskyblue58
CCFC Finance Director
ok a couple of caveats first and I will be as brief as I can
put 50 accountants, valuers & professors in a room ask them to value CCFC and you can reasonably expect many even 50 different answers and many more differences in assumptions - none would be incorrect maybe none could provide the reality answer
Not going to critique what the Professor has done as such. He is obviously a clever guy with a football finance reputation - this is his broad opinion of value of Otium now based on broad football finance norms. What I say will not make him or me right or wrong. I will raise points from what I know about CCFC
the biggest caveat is that this valuation is not the situation that Hoffman is trying to acquire so any link to the bid by media or anyone else is tenuous at best and certainly misleading
Let me say from the start I do not believe that Otium Entertainment Group Ltd has any net value at all other than a ransom amount expected by SISU. The true value of Otium if you were buying it is a point at which someone would bid and what SISU would accept that amount. That has no real relationship to assets and liabilities. Personally I would question why anyone would buy that company at all, because the ARVO loans (8.7m plus 4m interest) and the preference shares that reconnect the £28m in SBS&L to the club are a big problem for any disposal
Neither of us have the latest information so it is all guess work really - which the professor acknowledges himself
I think the Professor has a particular model set up on a series of spread sheets and he has entered the 2015 &2016 figures entered assumptions and arrived at the 1.1m valuation. Absolutely nothing wrong in that. There are lots of such products, quite probably he has developed his own, all different in their way and dependent on what it is you enter and assume.
There are a number of assumptions and comments he has made that I may differ with
- match income increases at a steady 3% (inflation?) but what about the starting point. He has taken educated guesses at income & expenditure based on 2015 & 2016 figures. Does that factor in a trip to Wembley, relegation to L2, static season ticket prices, smaller crowds, lower ST sales. If it hasn't then the forward cash flows for 2018, 2019 etc must include error and if there is then because the valuation is based on the cashflows then that too must include errors. It also suggests (because it is hard to predict) that there is a status quo and no boost from any success
- other incomes tied closely to the success of the club and size of crowds. So are affected by the factors above also. Again assumed 3% growth - in L2?
- Wages are assumed at 60% of turnover (that's nothing to do with SCMP) Trouble with that is if Turnover is lower the 60% means less paid in wages. However some of those costs are to a degree fixed and that would force the percentage up as turnover decreases. Do not see how he can exclude Academy costs its part of the business model
- other costs. You have to consider from 2018 increase in rent, the fact that agreement for shop & ticketmaster run out, whether the Academy is Cat 2 Cat 3 or exists at all etc .
- You can not take away the value of the debt call it worthless on one hand and include interest. The figures maintain both the preference shares and ARVO loans. The loan outstanding to ARVO is capital 8.5m plus 4m interest at 31/05/16 it will have grown. Not to mention the interest has to include the effects of withholding tax so the 12% needs a 20% uplift. The ARVO loans have a value to ARVO because they achieve a 12% return. The preference shares are a problem because if accumulated profits achieved then they are entitled to draw down those profits. These figures assume interest is actually paid I think. Paying the accrued interest out, paying the withholding tax affects the cash flows, the surplus and increases the overdraft plus of course changes the valuation
- the real problem highlighted by his analysis is, that even with what I would say are optimistic figures in some ways, that we continue to make annual million pound losses. How is that viable or sustainable?
- overdraft of £3m in 2021 is forecast. What bank is going to provide that with no security on offer ? All the assets are charged to ARVO and their £8m net capital loan and that according to the forecasts is still included
- intangible assets - player registrations in effect how can you have a negative figure for these? see 2019 to 2021. If you are selling/buying any company the starting point is looking at the assets and including the true value. How is amortisation so high when there is no real acquisitions?
- fixed assets what would the club need to buy each year?
- the whole point of the shop deal is not to have the risk of carrying inventory that's why the figure is £0 in 2016 accounts. So would there be any inventory stock?
- the other creditors include the £4m interest accrued and withholding tax and unless paid or forgiven remain.
- there are other points this is not an exhaustive list
its a matter of opinion, mine differs. Bottom line, I believe, is still you would not buy Otium Entertainment Group ltd T/a CCFC so a valuation of OEG now serves no real purpose. The value of what Hoffman is trying to acquire is more basic (selected assets acquired less selected liabilities taken on). You would do similar exercises to the Professors to establish probable future cash flows but your valuation to acquire would not I think be on this basis. The problem for Hoffman is matching that to SISU expectations. The problem for SISU is minimising the financial hit, it will be horse trading not valuations if a deal can be done at all
No doubt the media will hold up this work as evidence supporting Hoffmans bid in some way but it really doesnt
put 50 accountants, valuers & professors in a room ask them to value CCFC and you can reasonably expect many even 50 different answers and many more differences in assumptions - none would be incorrect maybe none could provide the reality answer
Not going to critique what the Professor has done as such. He is obviously a clever guy with a football finance reputation - this is his broad opinion of value of Otium now based on broad football finance norms. What I say will not make him or me right or wrong. I will raise points from what I know about CCFC
the biggest caveat is that this valuation is not the situation that Hoffman is trying to acquire so any link to the bid by media or anyone else is tenuous at best and certainly misleading
Let me say from the start I do not believe that Otium Entertainment Group Ltd has any net value at all other than a ransom amount expected by SISU. The true value of Otium if you were buying it is a point at which someone would bid and what SISU would accept that amount. That has no real relationship to assets and liabilities. Personally I would question why anyone would buy that company at all, because the ARVO loans (8.7m plus 4m interest) and the preference shares that reconnect the £28m in SBS&L to the club are a big problem for any disposal
Neither of us have the latest information so it is all guess work really - which the professor acknowledges himself
I think the Professor has a particular model set up on a series of spread sheets and he has entered the 2015 &2016 figures entered assumptions and arrived at the 1.1m valuation. Absolutely nothing wrong in that. There are lots of such products, quite probably he has developed his own, all different in their way and dependent on what it is you enter and assume.
There are a number of assumptions and comments he has made that I may differ with
- match income increases at a steady 3% (inflation?) but what about the starting point. He has taken educated guesses at income & expenditure based on 2015 & 2016 figures. Does that factor in a trip to Wembley, relegation to L2, static season ticket prices, smaller crowds, lower ST sales. If it hasn't then the forward cash flows for 2018, 2019 etc must include error and if there is then because the valuation is based on the cashflows then that too must include errors. It also suggests (because it is hard to predict) that there is a status quo and no boost from any success
- other incomes tied closely to the success of the club and size of crowds. So are affected by the factors above also. Again assumed 3% growth - in L2?
- Wages are assumed at 60% of turnover (that's nothing to do with SCMP) Trouble with that is if Turnover is lower the 60% means less paid in wages. However some of those costs are to a degree fixed and that would force the percentage up as turnover decreases. Do not see how he can exclude Academy costs its part of the business model
- other costs. You have to consider from 2018 increase in rent, the fact that agreement for shop & ticketmaster run out, whether the Academy is Cat 2 Cat 3 or exists at all etc .
- You can not take away the value of the debt call it worthless on one hand and include interest. The figures maintain both the preference shares and ARVO loans. The loan outstanding to ARVO is capital 8.5m plus 4m interest at 31/05/16 it will have grown. Not to mention the interest has to include the effects of withholding tax so the 12% needs a 20% uplift. The ARVO loans have a value to ARVO because they achieve a 12% return. The preference shares are a problem because if accumulated profits achieved then they are entitled to draw down those profits. These figures assume interest is actually paid I think. Paying the accrued interest out, paying the withholding tax affects the cash flows, the surplus and increases the overdraft plus of course changes the valuation
- the real problem highlighted by his analysis is, that even with what I would say are optimistic figures in some ways, that we continue to make annual million pound losses. How is that viable or sustainable?
- overdraft of £3m in 2021 is forecast. What bank is going to provide that with no security on offer ? All the assets are charged to ARVO and their £8m net capital loan and that according to the forecasts is still included
- intangible assets - player registrations in effect how can you have a negative figure for these? see 2019 to 2021. If you are selling/buying any company the starting point is looking at the assets and including the true value. How is amortisation so high when there is no real acquisitions?
- fixed assets what would the club need to buy each year?
- the whole point of the shop deal is not to have the risk of carrying inventory that's why the figure is £0 in 2016 accounts. So would there be any inventory stock?
- the other creditors include the £4m interest accrued and withholding tax and unless paid or forgiven remain.
- there are other points this is not an exhaustive list
its a matter of opinion, mine differs. Bottom line, I believe, is still you would not buy Otium Entertainment Group ltd T/a CCFC so a valuation of OEG now serves no real purpose. The value of what Hoffman is trying to acquire is more basic (selected assets acquired less selected liabilities taken on). You would do similar exercises to the Professors to establish probable future cash flows but your valuation to acquire would not I think be on this basis. The problem for Hoffman is matching that to SISU expectations. The problem for SISU is minimising the financial hit, it will be horse trading not valuations if a deal can be done at all
No doubt the media will hold up this work as evidence supporting Hoffmans bid in some way but it really doesnt
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Esoterica
Well-Known Member
I'm always amazed you can provide such detailed insight whilst Scuba Diving!
D
Deleted member 5849
Guest
Is this the finance equivalent of monkeys, typewriters, and Shakespeare?
oldskyblue58
CCFC Finance Director
Captain Dart
Well-Known Member
Is this the finance equivalent of monkeys, typewriters, and Shakespeare?
No, it matters not how many accountants try they just can't authour Shakespeare. They usually find a few unpaid tax bills in MacBeth though.