FAO royboy and dsr - valuing BFC

[Goddy]

Just wondered from our resident financial experts, how the valuation of a club like Burnley might have changed over the course of the last year or two (and going into next financial year where the club looks increasingly likely to be staying in the PL).

[gandhisflipflop]

Using my fag packet maths if I was to buy the club I'd expect to acquire it for circa 60 million.

[Goddy]

Using my fag packet maths if I was to buy the club I'd expect to acquire it for circa 60 million.

My fag packet calc is 122000 shares (in issue) x £200 per share = £24.4m.

Seems to me that's a paltry valuation and your £60m would be nearer the mark but I have no understanding/knowledge of what a reasonable valuation might be given the current status of the club as a PL club.

Whatever, it looks like I'll have to have a rummage down the back of the sofa for a few extra quid for when I make a takeover bid

[aggi]

My fag packet says £100 million. We're debt free, we'll make a profit this year and have cash in the bank, if we stay up we'll be turning over £120m or so. If a new owner so desired they could cut costs right down (say a £20m wage bill), sell a load of players and take out upwards of £100m over the next few seasons.

Valuing football clubs is a bit strange. The obvious way is future cashflow but this is obviously very volatile for a club like Burnley who could get relegated and see a huge cut in revenue. Asset value is also a slightly strange one, you're acquiring a football ground (which is good for playing football but not much use for anything else) and players who tend to be on shortish contracts, difficult to value and may not be willing to be sold when you want them to be.

On top of that, there is the premium of owning a football club, a large number of owners have them as vanity projects rather than viable businesses, which skews traditional valuation models a bit.

[jdrobbo]

I offered 52.15 million last week and I was told that Mike Garlick would call me once back from Aldi. Still waiting!

[Sidney1st]

Somewhere between £50 - 70 million.

No debts, new training facilities, hopefully cat 2 academy with new facilities, good manager and decent squad.

[JohnMac]

I offered 52.15 million last week and I was told that Mike Garlick would call me once back from Aldi. Still waiting!

Apparently he was told Strikers were top quality and really cheap at Aldi.
Turned out to be what we call 'Matches' in the UK

[cricketfieldclarets]

Even if Burnley were to go tits up and / or relocate, the land Turf Moor is on can't be worth that much. Thats before the cost to knock it down. Gawthorpe would be worth a bit mind.

You aren't buying the assets as such more the position in which the club is in the league structure and the potential of it.

I am more concerned with how much having a premier league club on the doorstep and installing a new fence has affected the house

[Chester Perry]

Gawthorpe is only worth something if you can build houses on it - such planning has been ruled out in the past - which in turn had a significant effect on Burnley FC being able to secure bank loans. Whether this would be the case under current planning and Government targets is currently untested

[dsr]

As a cash-raising investment, the club isn't worth much (relatively speaking) because an investor would have to believe that the club is somewhere near its peak. The huge asset that contributes most of the club's value is its Premier League place, and that's an asset that can cease to exist in one bad year.

The club's value is in whether or not a very rich man wants to buy a Premier League club. Or for maximum value, two separate very rich men each want to buy one. There's a very limited supply; the value would be how much someone wants to pay.