Richie Posted June 12 Share Posted June 12 9 minutes ago, CoF said: I'm really struggling with this. Collectively, Steelmen - absolutely. Superhero mascot, Steelman - brilliant. I absolutely cannot accept an individual player being a steelman. Sack the board. Similarly when fans of certain English clubs say "I'm a Hammer", "I'm a Seagull", "I'm an Owl" etc. 1 Quote Link to comment Share on other sites More sharing options...
Vietnam91 Posted June 12 Share Posted June 12 (edited) This whole EV thing is something that is only been a thing for me for 24hrs. I've since started to dig into and learn more. I'll try and put in an easy to digest form for as many as possible to understand. I benefit from having a close friend as a top end accountant. Last night we were discussing the offer and in passing and probably because he's hotwired to do so, asked if the debt figure used was gross or net. I got a quick "Accounts for Dummies" lesson and went to work. I went to here: https://www.investopedia.com/terms/e/enterprisevalue.asp And discovered the accepted formula to calculate EV is given as: Quote What Is Enterprise Value? EV measures a company’s total value, often used as a more comprehensive alternative to market capitalisation. EV includes in its calculation not only the market capitalisation of a company but also short-term and long-term debt and any cash or cash equivalents on the company’s balance sheet. Enterprise Value Formula and Calculation EV = MC + Total Debt - C Where: MC = Market Captilisation (the club used Equity) Total Debt = sum of short-term and long-term debt C = Cash and cash equivalents (the liquid assets of a company, but may not include marketable securities) To calculate market capitalization—if not readily available online—you would multiply the number of outstanding shares by the current stock price. Next, total all debt on the company’s balance sheet, including both short-term and long-term debt. Finally, add the market capitalisation to the total debt and subtract any cash and cash equivalents from the result. So off to the balance sheet get the numbers and plug them in: MC (Equity used - from club statement) £3.9m Total Debt = £1,938,472 (short term) + £1,542,666 (long term) = £3,481,148 (a.k.a. gross debt) C = £3,585,784 (current/liquid assets) Gross debt - current/liquid assets = -£104,639 (a.k.a net debt) in our case this is a credit, we were essentially debt free a year ago. EV (1 year ago) = £3.8m (following the generally accepted accounting principals and instructions above). I'm afraid at reading the official response I can't agree with the explanation. How you get an EV is clearly shown and detailed. Everything required can be found in one document. We have indicated that our current EV is £7.7m so I asked myself, why would a higher EV be useful, what are motivations for having it higher and why has it seemingly jumped by so much in a calendar year? Have there been major differences to the debt or reductions in the cash available in only 12 months? I was told today this was primarily down the Covid loan .... I really am at a loss to understand how and why. If you own a company and decide you're done and want out you have a few options. 1./ You can liquidate it, then you pay off your debts and what's left is yours. 2./ You can sell it, a buyer when purchasing a company will look at the debt level because bought, all parts of the company good and bad are purchased. So say it is valued as a £100m company but they have also £50m or more of debt, it may be feasible for transaction for a fee of £50m taking this into account, the seller walking away no encumbered debt. Most Motherwell fans would go with a gut feeling of something in the £8-£12m range as a fair value (dependent, knowledge, emotion, context, comparison and alcohol consumed). The club's published EV based upon Erik's offer of £1.95m over 6 years for 49% is £3.8m. I'm afraid I'd die on that hill at present. I dunno it just feels like we've reversed engineered this and invented debt that doesn't exist to facilitate and account for £2m getting half of the club. A high debt figure allows for a smaller equity figure of the company to be derived. e.g. If we'd gone mental in the transfer market in years gone by and were £7.7m in debt (reminder .... we're actually debt free) in theory to maintain the same club generated EV then Erik would only need to put in £1 for half the club but need to service that debt. Edited June 12 by Vietnam91 3 Quote Link to comment Share on other sites More sharing options...
Jim McLean's Ghost Posted June 12 Share Posted June 12 2 minutes ago, Vietnam91 said: The club's published EV based upon Erik's offer of £1.95m over 6 years for 49% is £3.8m. I'm afraid I'd die on that hill at present. I dunno it just feels like we've reversed engineered this figure to account for £2m gets. you half of the club. Over 6 years with and considering inflation the actual value the board agreed to is even lower. Giving Barmack control immediately essentially the same as giving Barmack 6 year interest free loan of £1.65m. UK govt business loans at 6%. By my reckoning that is saving Barmack ~£375,000 by allowing him to pay in installments. His final payment is covered by the club provided him a very friendly financing package. This is versus the club being paid immediately and accruing interest in our account. 1 Quote Link to comment Share on other sites More sharing options...
camer0n_mcd Posted June 12 Share Posted June 12 Spanish journalist with 31,900 followers saying that Barcelona are after Lennon Miller.. 3 Quote Link to comment Share on other sites More sharing options...
Vietnam91 Posted June 12 Share Posted June 12 (edited) 7 minutes ago, Jim McLean's Ghost said: Over 6 years with and considering inflation the actual value the board agreed to is even lower. Giving Barmack control immediately essentially the same as giving Barmack 6 year interest free loan of £1.65m. UK govt business loans at 6%. By my reckoning that is saving Barmack ~£375,000 by allowing him to pay in installments. His final payment is covered by the club provided him a very friendly financing package. This is versus the club being paid immediately and accruing interest in our account. Great point and well noticed! I said all along £2m paid on day 1, we can at least do something with that. What you've highlighted just makes whole thing stick even deeper in the craw. Edited June 12 by Vietnam91 0 Quote Link to comment Share on other sites More sharing options...
RandomGuy. Posted June 12 Share Posted June 12 Just now, camer0n_mcd said: Spanish journalist with 31,900 followers saying that Barcelona are after Lennon Miller.. Just make sure they pay up front. 1 Quote Link to comment Share on other sites More sharing options...
Handsome_Devil Posted June 12 Share Posted June 12 That's never going to happen but McMahon on the balcony pleading poverty while fucking Barcelona are faxing us offers would sum us up atm. 1 Quote Link to comment Share on other sites More sharing options...
RandomGuy. Posted June 12 Share Posted June 12 2 hours ago, boozyBJ said: He can play on either wing Genuinely. 1 Quote Link to comment Share on other sites More sharing options...
Ron Aldo Posted June 12 Share Posted June 12 30 minutes ago, camer0n_mcd said: Spanish journalist with 31,900 followers saying that Barcelona are after Lennon Miller.. I presume we'll be loaning him to Barca with a view to selling him in the future for, say, £5 million? 4 Quote Link to comment Share on other sites More sharing options...
camer0n_mcd Posted June 12 Share Posted June 12 (edited) Edited June 12 by camer0n_mcd 0 Quote Link to comment Share on other sites More sharing options...
Vietnam91 Posted June 12 Share Posted June 12 @RandomGuy. Not a dig due to who you support but what was Theo's chart like last summer opposed to this summer. It seems we need a similar wholesome story. 0 Quote Link to comment Share on other sites More sharing options...
RandomGuy. Posted June 12 Share Posted June 12 8 minutes ago, Vietnam91 said: @RandomGuy. Not a dig due to who you support but what was Theo's chart like last summer opposed to this summer. It seems we need a similar wholesome story. This is what the 316th, and final, version of the RG pizza chart shows up. Was clinical with his chances, and more involved in the build up, and didn't need to waste time chasing full backs back to his own defence. 2 Quote Link to comment Share on other sites More sharing options...
Erik Barmack Posted June 12 Share Posted June 12 (edited) 1 hour ago, Vietnam91 said: Great point and well noticed! I said all along £2m paid on day 1, we can at least do something with that. What you've highlighted just makes whole thing stick even deeper in the craw. @Vietnam91, I appreciate you digging into EV. I think it's a useful discussion. A few thoughts to add here: (1) EV is most useful when you're looking at a business that's spitting out cash on a consistent basis. You're basically getting into the guts of that business, understanding what's being built as a long-term asset, and then using that to predict cashflow on an ongoing basis (e.g. you're in the construction business and have margins on new houses being built) OR to predict how you can sell assets that are being built over time (e.g. a set of houses have been built, rented for a bit, and now you're selling the lot). (2) These types of models are not great for sports teams, because they tend to be very bad at spitting out cash, and the assets that are "built" can't be sold or shouldn't be sold (Fir Park is an "asset," but "stripping" that asset would mean you'd have nowhere to play, and in the process you've destroyed history). Conditions may improve for a team (players sales, improved media rights), but in almost all cases that improvement is going back into the Club (as it should). (3) Some of the comps mentioned here ignore ancillary businesses to that club. Tottenham now has a massive business off of NFL games, concerts and hospitality. I think we could all agree that, to the extent that the SPFL grows, those kinds of opportunities favor teams in bigger cities with bigger infrastructure. The rich are getting richer, and most accounting analysis of this kind doesn't do a great job of anticipating where growth will change anticipated valuation on a relative basis over time. (4) The type of opportunity has to meet the right type of buyer in order for valuations to make sense. No, this isn't just business-speak -- certain buyers will ONLY want to buy clubs over which they have full, absolute control. So, even if two teams are valued equally in terms of revenue and opportunities, the one with a hybrid ownership model could have fewer potential buyers, which affects price. (Think of a summer cabin that a family wants to "share" versus one that's owned outright; the sharing may be great, but many fewer buyers will even take a look at it, because they want their own stuff in the house.) (5) What no one seems to disagree with here is that a better offer hasn't emerged. That doesn't mean that this is the right offer for you, but no one to my knowledge is saying that we have somehow offered to pay LESS than a buyer who's qualified and who wants to be part of a hybrid business model. On some level , you'd expect that to happen if valuation was WAY off. (6) I suppose you can believe me or not, but we have looked at other clubs in this market, and similar markets. Given the above, there's nothing that's led me to conclude that we're somehow lowballing MFC. And given the example I gave about the EPL -- that some teams are worth 30x other teams -- it's also, in my mind, not totally off to think that teams within the SPFL could be worth 6x another team (I'm ignoring the OF, as they're kind of off the charts here). (7) Finally, I believe @Vietnam91 asked a few posts ago if I would take a low-ball offer for my production business. And the answer is, it depends if the money is "strategic" and in alignment with my values. When I raised money for my new company, I had offers from studios to pay significantly more for a piece of Wild Sheep, but I ultimately decided to partner with a big Spanish production concern at a cheaper valuation because I liked the people, the investment allowed my group to grow, they didn't want to take-over my business, and I thought that they would help with sales in Europe. Almost all of those things ended up proving out as true, and I haven't regretted the decision. Writing all of this doesn't mean that it's the right decision for MFC, but I raise some of these points as considerations, other points because I think we have been somewhat thoughtful about valuation, and the final point because I pretty firmly believe that valuation as a zero-sum game is pointless if the parties involved don't believe that they will grow something bigger together. Now excuse me while I pull my GW shoe-ducking gif out .... Edited June 12 by Erik Barmack 2 Quote Link to comment Share on other sites More sharing options...
Vietnam91 Posted June 12 Share Posted June 12 Let me get my comical gif/meme/jpeg out too 4 Quote Link to comment Share on other sites More sharing options...
peebles_Dee Posted June 12 Share Posted June 12 Can Mugabi play on the left of a 3 back? 0 Quote Link to comment Share on other sites More sharing options...
Al B Posted June 12 Share Posted June 12 1 minute ago, peebles_Dee said: Can Mugabi play on the left of a 3 back? Jesus Christ no. 0 Quote Link to comment Share on other sites More sharing options...
Wellin Posted June 12 Share Posted June 12 9 minutes ago, Vietnam91 said: Let me get my comical gif/meme/jpeg out too If EB can talk civilly to the fans irrespective of whether folk agree with the offer or not surely we can extend the same courtesy back. 15 Quote Link to comment Share on other sites More sharing options...
Erik Barmack Posted June 12 Share Posted June 12 Just now, Wellin said: If EB can talk civilly to the fans irrespective of whether folk agree with the offer or not surely we can extend the same courtesy back. Fine, but that's a funny fucking gif. 1 Quote Link to comment Share on other sites More sharing options...
camer0n_mcd Posted June 12 Share Posted June 12 3 minutes ago, peebles_Dee said: Can Mugabi play on the left of a 3 back? I've nightmares just thinking about that 2 Quote Link to comment Share on other sites More sharing options...
Wellin Posted June 12 Share Posted June 12 (edited) 1 minute ago, Erik Barmack said: Fine, but that's a funny fucking gif. Well at least you thought it was .. All that matters eh? Edited June 12 by Wellin 0 Quote Link to comment Share on other sites More sharing options...
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