The Everton Board Thread 2014/15

[marty mcfly]

So, lets run with £400 million for a moment, ignoring the cost of a new stadium.

If you had £400 million burning a hole in your back pocket, what sort of annualised return would you be hoping to get ? High single digits probably, so you're either hoping to grow the business and sell it at a profit later, or you want to take some money out of the club, probably as a dividend ?

On a turnover of ~100 million you're not going to be able to turn a decent enough profit to pay yourself much of a divi so you'd be relying on being able to find someone else to take it over at some time in the future to get a decent return. That's one hell of a risky investment for a fairly low return

To the right buyer, Everton's probably worth about 80 to 10 million, maybe 120 million tops. Anything above that doesn't make any financial sense and would only be attractive to someone buying for emotional reasons.

How can the whole club be worth 80m to 120m.

The 1st team squad is worth more than that. We where talking about Barkley being worth 50m, Lukaku 40m, Stones 30m, Coleman 20m, McCarthy 20m etc

It's not up to us to put a valuation on the club however if someone wants to get a bargain what makes you think they then would want to pump the money into growing the club.

It's more than likely that the TV money from Asian and the US as premier league football grows in those countries Everton's revenue will grow accordingly. Look how much it has grown in the last decade and there's no reason to think that won't continue.

As for what you might might receive as an annualised return. Football is a growth market and as a result that's less a concern since anyone buying and then investing in the club wouldn't be looking at that but rather the potential to increase the value of the club over a decade or more and then selling it on or doing an IPO.

The reality is the club is worth what 1) The board will sell at and 2) The buyer will buy at.

 

[sageyefc]

How can the whole club be worth 80m to 120m.

The 1st team squad is worth more than that. We where talking about Barkley being worth 50m, Lukaku 40m, Stones 30m, Coleman 20m, McCarthy 20m etc

It's not up to us to put a valuation on the club however if someone wants to get a bargain what makes you think they then would want to pump the money into growing the club.

It's more than likely that the TV money from Asian and the US as premier league football grows in those countries Everton's revenue will grow accordingly. Look how much it has grown in the last decade and there's no reason to think that won't continue.

As for what you might might receive as an annualised return. Football is a growth market and as a result that's less a concern since anyone buying and then investing in the club wouldn't be looking at that but rather the potential to increase the value of the club over a decade or more and then selling it on or doing an IPO.

The reality is the club is worth what 1) The board will sell at and 2) The buyer will buy at.

Who values the players? or do they go off what they were bought for?

 

[marty mcfly]

Who values the players? or do they go off what they were bought for?

Who knows but probably similar to when valuing the club itself. The buyers and the sellers. Everyone else's opinion doesn't really matter.

 

[Who's_up_for_cumpkins?]

dunno whether it's genuine (surely not). But spotted it doing the rounds on twitter today

 

[Deleted member 24970]

This may sound a little silly but here goes, when a team wants to build a new ground, does the FA actually help in any way ? Reason i ask is that usually the media cover the board and council + sponsorship deals of it, but does the FA have any input to a reasonable degree ?

Question was raised because i cant believe how a club like West Ham can be so lucky to get a olympic stadium for virtually free. Should we be asking questions of the FA or am i just sounding like im jealous ? I hate the fact everything is favoured in London whilst the north fight our own battles so to speak. Maybe im just desperate to see us get a new stadium i guess.

 

[Moomin]

This may sound a little silly but here goes, when a team wants to build a new ground, does the FA actually help in any way ? Reason i ask is that usually the media cover the board and council + sponsorship deals of it, but does the FA have any input to a reasonable degree ?

Question was raised because i cant believe how a club like West Ham can be so lucky to get a olympic stadium for virtually free. Should we be asking questions of the FA or am i just sounding like im jealous ? I hate the fact everything is favoured in London whilst the north fight our own battles so to speak. Maybe im just desperate to see us get a new stadium i guess.

Luck of the draw, Man City got the Commonwealth stadium.

 

[Deleted member 24970]

Luck of the draw, Man City got the Commonwealth stadium.

One of the biggest flukes in world football that City got the stadium - look what has happened since whilst also Changing the top four for a long time too i think. Before we get anything to progress in terms of luck or help, the council will have bent over backwards for LFC, kenwrights great great grandson or favourite actor will be owner, west ham will have attracted new owners twice and we will have a 65 year old wayne rooney playing up front kissing the badge lol

 

[The Esk]

How can the whole club be worth 80m to 120m.

The club is currently worth £49 million - I checked the share price this morning

The 1st team squad is worth more than that. We where talking about Barkley being worth 50m, Lukaku 40m, Stones 30m, Coleman 20m, McCarthy 20m etc

The value of the squad is largely irrelevant to the valuation of the Company as (i) they're heavily depreciating assets (in accounting terms) and (ii) if you sell them then they need replacing to maintain revenues. The chances are that replacement costs are greater than selling. Besides no manager or Board is ever going to sell all of their best players.

It's not up to us to put a valuation on the club however if someone wants to get a bargain what makes you think they then would want to pump the money into growing the club.

It's more than likely that the TV money from Asian and the US as premier league football grows in those countries Everton's revenue will grow accordingly. Look how much it has grown in the last decade and there's no reason to think that won't continue.

As for what you might might receive as an annualised return. Football is a growth market and as a result that's less a concern since anyone buying and then investing in the club wouldn't be looking at that but rather the potential to increase the value of the club over a decade or more and then selling it on or doing an IPO.

The assumptions are (i) that the fight for broadcasting market share will continue and that broadcasters will keep on increasing the amounts that they pay for rights and (ii) that Everton or any other team will continue in the Premiership - neither of which are an absolute given.

The reality is the club is worth what 1) The board will sell at and 2) The buyer will buy at.

The only bit of your post I agree with and based on the fact that the club has not been sold or even got close to being sold suggests there is a huge gap between the two figures.

 

[marty mcfly]

The club is currently worth £49 million - I checked the share price this morning



The value of the squad is largely irrelevant to the valuation of the Company as (i) they're heavily depreciating assets (in accounting terms) and (ii) if you sell them then they need replacing to maintain revenues. The chances are that replacement costs are greater than selling. Besides no manager or Board is ever going to sell all of their best players.



The assumptions are (i) that the fight for broadcasting market share will continue and that broadcasters will keep on increasing the amounts that they pay for rights and (ii) that Everton or any other team will continue in the Premiership - neither of which are an absolute given.



The only bit of your post I agree with and based on the fact that the club has not been sold or even got close to being sold suggests there is a huge gap between the two figures.

The club is not worth £49m. That's what the club would be worth if you use the price of the shares on the market and extrapolate that out to 100%.

However Bill is not going to sell his shares for that price so therefore the club is not worth that. The reason the shares are only valued at that on the market is because the market doesn't believe Bill is going to sell anytime soon which makes them about as useful as a piece of paper that says I own a bit of Everton FC. If they did however think there was a chance then the price would rocket.

At present the players are assets that could literally be sold tomorrow if the board decide to. What would stop an investor coming in paying 49m and then selling every player over 10m? Absolutely nothing. We might get relegated but that investor will have still made a lot of money even if they pay off the debt.

My assumption is that the premier league continues to grow in Asia and the US. Markets FAR FAR larger than the UK or even Europe. My assumptions including that we stay in the premier league are also based on the current trends. Your assumptions apparently aren't.

 

[The Esk]

The club is not worth £49m. That's what the club would be worth if you use the price of the shares on the market and extrapolate that out to 100%.

However Bill is not going to sell his shares for that price so therefore the club is not worth that. The reason the shares are only valued at that on the market is because the market doesn't believe Bill is going to sell anytime soon which makes them about as useful as a piece of paper that says I own a bit of Everton FC. If they did however think there was a chance then the price would rocket.

At present the players are assets that could literally be sold tomorrow if the board decide to. What would stop an investor coming in paying 49m and then selling every player over 10m? Absolutely nothing. We might get relegated but that investor will have still made a lot of money even if they pay off the debt.

My assumption is that the premier league continues to grow in Asia and the US. Markets FAR FAR larger than the UK or even Europe. My assumptions including that we stay in the premier league are also based on the current trends. Your assumptions apparently aren't.

I know your forum name means "to have been set against" or opposite but that does not mean you must counter every point with an argument.

The market value of the Everton Football Club is currently £49m, that is what the market thinks the club is worth. Now, let's consider what happens in a takeover. There's hardly ever a takeover at a premium greater than 100%, in fact average takeover premiums tend more towards 50%. But even at 100% that puts a value of £100m on the club - a long way from your earlier claim of US$2-400m (£130-260m).

I doubt even the most ardent asset stripper would consider the transfer values of players as a means of creating an investment return - even Mike Ashley has not gone that far.

We'll have to disagree on the future for broadcasting revenues.

Please now run through the basis of your US$2-400m valuation, I've explained already why I think £100m is absolute maximum based on two different valuation models.

 

[atrottel]

The market value of the Everton Football Club is currently £49m, that is what the market thinks the club is worth. Now, let's consider what happens in a takeover. There's hardly ever a takeover at a premium greater than 100%, in fact average takeover premiums tend more towards 50%. But even at 100% that puts a value of £100m on the club - a long way from your earlier claim of US$2-400m (£130-260m).

I doubt even the most ardent asset stripper would consider the transfer values of players as a means of creating an investment return - even Mike Ashley has not gone that far.

We'll have to disagree on the future for broadcasting revenues.

Please now run through the basis of your US$2-400m valuation, I've explained already why I think £100m is absolute maximum based on two different valuation models.

I'm actually partially replying to something you said a few pages back about what price you would put on your house as well...

Yes, I agree that there almost certainly is a gap between the valuation and the price demanded. But that - and let's think about a business rather than the football club we support - is normal for a company that expects to continue to be profitable for the owners of that company in the future.

I've had offers for the things I deal with in the past. Any time someone has been serious, I've knocked them back, despite the fact that some of them have offered 'the going rate' for what I own. In my line of work, the standard offer is 2.5-4x annual net profits. Now I may well consider - and have in the cases mentioned previously - that my profits will rise for longer than 2.5 to 4 years and that my capital will also increase in value. In other words, you would a) have to persuade me to sell (which I might not particularly want to anyway) and b) offer me a sum which I would find interesting enough to persuade me to invest my capital (time and money) elsewhere.

Now for me, that figure is way over 2.5-4x net profits but a potential buyer may well - from their pov - accuse me of 'overvaluing' my asset.

I can certainly imagine that the board (and any connected parties) are quite happy in the current TV revenue climate to sit on their hands and watch their investment multiply without doing anything particularly energetic. Any serious offer to them is probably going to have to take that scenario into consideration as well as a (for me at least) believable scepticism about the general standard of potential future owners.

 

[The Esk]

I'm actually partially replying to something you said a few pages back about what price you would put on your house as well...

Yes, I agree that there almost certainly is a gap between the valuation and the price demanded. But that - and let's think about a business rather than the football club we support - is normal for a company that expects to continue to be profitable for the owners of that company in the future.

I've had offers for the things I deal with in the past. Any time someone has been serious, I've knocked them back, despite the fact that some of them have offered 'the going rate' for what I own. In my line of work, the standard offer is 2.5-4x annual net profits. Now I may well consider - and have in the cases mentioned previously - that my profits will rise for longer than 2.5 to 4 years and that my capital will also increase in value. In other words, you would a) have to persuade me to sell (which I might not particularly want to anyway) and b) offer me a sum which I would find interesting enough to persuade me to invest my capital (time and money) elsewhere.

Now for me, that figure is way over 2.5-4x net profits but a potential buyer may well - from their pov - accuse me of 'overvaluing' my asset.

I can certainly imagine that the board (and any connected parties) are quite happy in the current TV revenue climate to sit on their hands and watch their investment multiply without doing anything particularly energetic. Any serious offer to them is probably going to have to take that scenario into consideration as well as a (for me at least) believable scepticism about the general standard of potential future owners.

An excellent post mate, and I don't disagree with anything you have said.

Despite what many fans think there is absolutely no reason why they should sell now (from a business perspective).

However it is disgenuous to maintain that the club is for sale if it isn't.

 

[atrottel]

However it is disgenuous to maintain that the club is for sale if it isn't.

Everything's for sale - it's just a question of price. But I agree with what you mean - the board are not actively seeking a sale because there (as yet) has been no incentive (for example, a negative outlook or an attractive offer) for them to do so.

 

[Wat Tyler]

View attachment 10102 dunno whether it's genuine (surely not). But spotted it doing the rounds on twitter today

"Not for sale."

 

[kithnou]

"Not for sale."

Hallelujah brother!