The answer is no. Although revenue multiples is recommended by academics and professionals in the sporting domain, the truth is that the methodology is far too simplistic. The results show that it tends to work adequately to provide a quick estimate for EPL clubs with lower revenues but provides large undervaluation for the more established clubs with higher revenues. The method also fails to take into account what assets a club has under its control, its debt position, is it controlling costs and its profitability.
It is therefore evident that Revenue Multiples can be universally applied to value clubs in the EPL but its results are not consistently reliable. The bankruptcy and broker values were not estimated as the financial distress of a club or sentiment of the owners cannot be realistically simulated and differs on a case by case basis. Forbes have been publishing the 25 highest valued clubs in world football on an annual basis since This means that the Forbes method was not universally applied to EPL valuations for the purpose of this research.
This probably explains why it has been the industry benchmark by default. It became obvious over the course of this research that none of the aforementioned valuation methods were universally applicable and capable of providing a reliable value for every EPL club. Consequently, it was decided to develop an alternative valuation technique capable of achieving these underlying objectives — the MMM.
After scrutinising all the established valuation models and the niche requirements of the football industry, the components of this model were finalised. The model is explained in detail within Section 5 of the paper available here. Although there are only Forbes values available for seven of the fifteen transactions that took place during the sample period, it is evident that their results are even less reliable than those previously highlighted relating to North American sports franchises.
The table above shows that Forbes estimates were between Looking specifically at Manchester City which changed hands in and , Forbes valued the club This leaves the MMM as the last methodology to be considered. The model uses audited accounting data and industry KPIs to provide a bespoke valuation method designed for the football industry.
Leeds United entered a period of financial distress between and The table above reveals that on average valuations using the multivariate model were only 2. The valuations of Manchester United in and Sunderland in were exactly correct to the nearest million pounds. Yoann Barbet Y. Jordy de Wijs J. Jimmy Dunne J. Sam McCallum S. Lee Wallace L. Moses Odubajo M. Osman Kakay O.
Luke Amos Luke Amos. Dominic Ball D. Charlie Owens C. Stefan Johansen S. Sam Field Sam Field. Andre Dozzell A. Ilias Chair I. George Thomas G. Chris Willock C. Albert Adomah A. Andre Gray A. Lyndon Dykes L. Charlie Austin C. Andre Gray Centre-Forward. Sam McCallum Left-Back. Charlie Austin Centre-Forward. Stefan Johansen Central Midfield.
Andre Dozzell Central Midfield. All arrivals. Macauley Bonne Centre-Forward. Tom Carroll Central Midfield. Todd Kane Right-Back. Joe Lumley Goalkeeper. All departures. Ilias Chair Attacking Midfield. Lyndon Dykes Centre-Forward. Chris Willock Left Winger. Rob Dickie Centre-Back. All goalscorers. You look at it this year and Bournemouth, Fulham, West Brom have parachute payments — those clubs are going to dominate the Championship because they've got the cash.
But Hoos says the club won't pay any price to get back there. That's the one thing we absolutely won't do because that's just mortgaging the future. This is a BETA experience.
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