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Thread: Value of an RL club?

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    Got A Season Ticket BigTuna's Avatar
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    Default Value of an RL club?

    Friends and I were talking after the game on Saturday and we got on to the subject of attracting new investments into the game and to the value of an SL team, for any potential new investor or owner to see any ROI's, given the same 3 or 4 teams only seem to have a realistic chance of getting to or winning the GF each year.

    If EM decided to put Saints in the shop window, how much do you genuinely think the club would be worth?

    How much do you think a mid table team like Cas or HKR for example, would be worth in the current market / current state of the game to make them investment worthy and to make them challenge the top teams more?
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    Quote Originally Posted by JBT View Post
    Friends and I were talking after the game on Saturday and we got on to the subject of attracting new investments into the game and to the value of an SL team, for any potential new investor or owner to see any ROI's, given the same 3 or 4 teams only seem to have a realistic chance of getting to or winning the GF each year.

    If EM decided to put Saints in the shop window, how much do you genuinely think the club would be worth?

    How much do you think a mid table team like Cas or HKR for example, would be worth in the current market / current state of the game to make them investment worthy and to make them challenge the top teams more?
    It's difficult to put a value on a Rugby League club. Normally when businesses are valued for purchase, a multiple of gross profit it used to value the trading base of the organisation. They then value the assets held by the business (Property, infrastructure, vehicles) and agree a price for those.

    So a club like Huddersfield who likely make no profit and have very few if any assets of their own would be very difficult to actually value. There might be some value in the future earnings from the TV deal etc, but it'd basically be worth whatever it took to persuade the current owner to part with it.

    Saints might be a lot more valueable due to the stadium and training facilities (I'm unsure if we own them).

    If I had to guess, a value for clubs like Salford, Huddersfield etc with no assets and no other revenue streams and no profit, might be around £0.5m to £2m depending on the willingness of the current owners to part with it. A club like Saints you might be talking £15-£20m taking into account the stadium and other assets and the potential revenue streams. Leicester Tigers have recently put themselves up for sale to new owners and have valued themselves at £60m. I'd imagine they have a bigger stadium, higher attendances, higher prices, higher TV deal and higher sponsorship etc.

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    In The South Stand KentishBarry's Avatar
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    I suppose you could get some idea from Companies House, but I think it's different for RL (and other similar sports clubs).
    I get the feeling that most club 'owners' aren't doing it for the money. It's more to do with a love for their home team.
    You could also extend the definition of 'value' beyond pure finance. Saints are probably the best thing in St Helens. Difficult to put a 'value' on that!

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    Quote Originally Posted by Saddened! View Post
    It's difficult to put a value on a Rugby League club. Normally when businesses are valued for purchase, a multiple of gross profit it used to value the trading base of the organisation. They then value the assets held by the business (Property, infrastructure, vehicles) and agree a price for those.

    So a club like Huddersfield who likely make no profit and have very few if any assets of their own would be very difficult to actually value. There might be some value in the future earnings from the TV deal etc, but it'd basically be worth whatever it took to persuade the current owner to part with it.

    Saints might be a lot more valueable due to the stadium and training facilities (I'm unsure if we own them).

    If I had to guess, a value for clubs like Salford, Huddersfield etc with no assets and no other revenue streams and no profit, might be around £0.5m to £2m depending on the willingness of the current owners to part with it. A club like Saints you might be talking £15-£20m taking into account the stadium and other assets and the potential revenue streams. Leicester Tigers have recently put themselves up for sale to new owners and have valued themselves at £60m. I'd imagine they have a bigger stadium, higher attendances, higher prices, higher TV deal and higher sponsorship etc.
    I don’t think there is any way that Saints is currently worth anything like £20m. Equally I would be absolutely amazed if Leicester are worth £60m given that they were making operating losses of £1m plus even before covid - you’d be banking on massive commercial/central revenue growth to underpin a value like that.

    The reality is that, as with most sports clubs, you would be buying the opportunity to spend a fortune
    and the people selling the clubs are often doing so because they’ve decided they want someone else’s pocket to foot the bills.

    The asset values are pretty meaningless other than the ability to raise finance against them - all a stadium really is is another cost associated with running a rugby club.


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    Quote Originally Posted by FearTheVee View Post
    I don’t think there is any way that Saints is currently worth anything like £20m. Equally I would be absolutely amazed if Leicester are worth £60m given that they were making operating losses of £1m plus even before covid - you’d be banking on massive commercial/central revenue growth to underpin a value like that.

    The reality is that, as with most sports clubs, you would be buying the opportunity to spend a fortune
    and the people selling the clubs are often doing so because they’ve decided they want someone else’s pocket to foot the bills.

    The asset values are pretty meaningless other than the ability to raise finance against them - all a stadium really is is another cost associated with running a rugby club.


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    The asset values would be relevant to the seller though, they'd want a good price for what they're selling unless they have other motives to exit, or wanted to get out quickly. I'd estimate somewhere around £8m to resolve the club and it's assets and the rest is the value of the brand, the future revenues and the commercial potential of the setup and a little profit for the current owners. Of course, the chance of finding a buyer for that is remote, but might be possible if the current owners of a club announced they were going at a certain point and invested time into getting it sold.

    The reality is that the sport should maybe be encouraging this kind of thing. There are tons of overseas people looking to invest in sport who perhaps don't have the facilities to buy a football team of a good standard. You could maybe buy the entirety of British RL for around half what you'd pay for a mid table Premier League side? I was listening to the radio and apparantly there is a suggestion that Union will be franchising soon and that a £35m buy-in will be required to join. That will raise around £560,000,000 for top tier Union in this country. With the PL, the ridiculous investment in cricket and Union doing that, we're suddenly going to become an incredible bargain. We could market SL clubs to billionaires like they do with dolphin/tiger sponsorships at Zoos, buy your son his own professional sports club for Christmas/Eid/Passover.

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    Learning All The Songs Kakariki's Avatar
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    Quote Originally Posted by FearTheVee View Post

    The reality is that, as with most sports clubs, you would be buying the opportunity to spend a fortune and the people selling the clubs are often doing so because they’ve decided they want someone else’s pocket to foot the bills.


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    You're absolutely right, especially when it comes to rugby league.

    Most are owned by a "local lad done well" type, a la Eamon McManus. The club would not be bought as a viable investment from anyone, rather someone like Michael Coleman taking over the reins and not worrying too much about returns.

    It's essentially a rich local businessman's hobby or putting something back into his town.

    The worry is when and if there's no such individual willing to carry it on....

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    Quote Originally Posted by Saddened! View Post
    The asset values would be relevant to the seller though, they'd want a good price for what they're selling
    The seller can see them as relevant allthey want but the reality is that they are not really.

    By way of example, someone asks me to buy Saints. I think - that might cost me £500k-£700k a year but I'm willing to do it because I love the club.

    They then say - yes but for the right to pay £500k to £700k a year I want you to give me £10m for the stadium too because I helped build it. And by the way, you can't do anything other than rugby there and a few other small revenue generating activities which are already being done in landing on the £500k-£700k operating losses every year (or let's say breakeven at best).

    I would be inclined to say I'll buy the shares for £1 thanks - you can walk away knowing you've done a great job and any other funding is now my problem. I'm not paying you £10m for the chance to spend millions on an essentially altruistic exercise.

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    Seem to recall Lenagan paying 5-7 million to Whelan for Wigan. Would guess Leeds are the most valuable due to the size and location of the Headingly complex. After them Saints, Wire and Wigan (I believe we still have the old Orrell training ground on the books as an asset). Other than Leeds cant see any worth much more than 10 million.

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