32 Pages Posted: 24 Mar 2013

Date Written: March 22, 2013

Abstract

This paper introduces an original multivariate model developed to value English Premier League (EPL) clubs. Prior to developing the model, established valuation methods were assessed for their accuracy in estimating an EPL club’s worth. Of these models, three were general company valuation techniques: market capitalisation, discounted cash flow and bankruptcy values; and three were contemporary football industry valuation models: revenue multiples, Forbes ‘Most Valuable Soccer Teams’ and broker values. For comparison purposes the models were calculated for a sample period of nine seasons between the 2003/04 and 2011/12 seasons. Estimated valuations were also compared to actual club sale transaction prices during the same period. Comparative results show the multivariate model introduced in the paper is the only universally applicable and reliable methodology to value EPL clubs of the methods evaluated.