• Other Financial Issues

    Valuing Newcastle United Part II

    In the last post we looked at the methods professionals use to value a business. We deliberately didn’t calculate using one method,  known as the discounted cash flow method, because (a) it relies on clubs generating positive cash flows, which they traditionally have struggled at, and (b) designing the model involves a lot of nerding out on a spreadsheet. Some people have rightly pointed out though that with the latest TV deals, clubs are now far more cash rich than they used to be, and so perhaps such a model is worth attempting. Furthermore, being nerds here at the PriceOfFootball, the temptation to produce something that gives a value was…

  • Other Financial Issues

    Newcastle: What’s The Colour of Money?

    Newcastle: What’s the colour of money? Newcastle United are officially up for sale. http://www.espn.co.uk/football/english-premier-league/23/blog/post/3236029/mike-ashley-puts-newcastle-up-for-sale-but-can-club-be-great-again. That’s not significantly different from the position over the last few months, where they were unofficially up for sale. There are many interested parties, but the most important one is Mike Ashley, as the price that he’s prepared to accept that will determine whether recent noises from the club are to be taken seriously. Stories abound of prices being asked of about £350-400 million. Which begs the question, how do you value a football club? We’ve looked at a variety of methods, to try to determine a range of prices that might be acceptable to both…

  • Other Financial Issues

    Football and the party manifestos

    What does the figure one billion, nine hundred and twenty-two million, nine hundred and forty-one thousand pounds mean in terms of football and politics? (and before you ask, is isn’t Diane Abbott’s answer to the question, “If I buy two pints of lager and a packet of crisps, how much change will I get from a twenty-pound note”). This is in fact the money generated by Premier League football clubs in 2015/16 from broadcast income. (see breakdown in Appendix 1). The Labour Party has generated publicity with a proposal in its manifesto that the Premier League should commit 5% of this sum to grassroots football. We have therefore looked at…

  • Other Financial Issues

    Deloitte Football Money League: Manchester United now the biggest earning club.

    The business consultants Deloitte have just produced their annual football money league table, which reveals that Manchester United generated $635 million in 2015/16, the highest in the world. Real Madrid, who topped this table in 2014/15, dropped to third place with $572 million, but they did win the UEFA Champions League. Whilst the monetary success will no doubt delight the Glazer family who own the club, and the shareholders who have bought United on New York’s NASDAQ market, Uniteds fans are likely to be less impressed. The last time Manchester United won the Premier League was in 2012-13, when Sir Alex Ferguson was manager. Since then they have finished 7th,…