General Wrexham... Great Story or Proof Football is Dead?

[MC Yellow]

I've said in a previous reply that I see a big difference in investment in a club, and spending so much that it ruins the competition.

The impact of this will certainly lessen if they move up the pyramid.

Be interesting to see how that plays out.

 

[OxShireWest]

In the case of Man City, UEFA have rules regarding sponsorship to stop this from happening, sponsorship details are investigated and only what is considered a 'fair' price is counted towards the UEFA FFP rules. I believe that the Premier League have brought something similar in also, with absolutely no link I believe this came in just after the Newcastle takeover.

I don't know what the EFL rules are, but I'm sure there is something similar in place. It's not as simple as an owner going to a club and saying 'my company will sponsor the shirts for £x million'

It seems to me that that's exactly what Wrexham have done, though, Ryan Reynold's gin business is one of the main sponsors of the club, and his wife's business sponsors the training kit and women's kits.

 

[SteMerritt]

It seems to me that that's exactly what Wrexham have done, though, Ryan Reynold's gin business is one of the main sponsors of the club, and his wife's business sponsors the training kit and women's kits.

The Conference again will have it's own rules, I don't know what they are. I'm pretty certain you can't just go and put massive money in via sponsorship details that are way above what the sponsorship is actually worth. The EFL will no doubt be looking at this.

 

[RgYellows]

I suspect they will have a much harder time of it now they’re back in the league. Each and every League 2 club are going to want to shove their ‘Hollywood’ razzamatazz up Wrexhams behind. They will also be facing clubs that are all professional, in the NatIonal league there are still 3/4 that are still part time. I don’t think they’ll get it all their own way.

Crawley, Fleetwood and Forest Green have all spent their way through L2. I think it starts to get interesting in L1, especially because the media interest dies when progress stalls.

By the time you get to the Championship, you have to be working a lot smarter or you’ll really start to test the commitment/wallets of your owners.

 

[RgYellows]

In the case of Man City, UEFA have rules regarding sponsorship to stop this from happening, sponsorship details are investigated and only what is considered a 'fair' price is counted towards the UEFA FFP rules. I believe that the Premier League have brought something similar in also, with absolutely no link I believe this came in just after the Newcastle takeover.

I don't know what the EFL rules are, but I'm sure there is something similar in place. It's not as simple as an owner going to a club and saying 'my company will sponsor the shirts for £x million'

But as always, what’s a fair price?

 

[SteMerritt]

But as always, what’s a fair price?

I believe it is assessed by an independent panel. Price of Football went through this a few months back with regard to the Premier League rules, can't remember the details.

 

[Big Ron]

I've said in a previous reply that I see a big difference in investment in a club, and spending so much that it ruins the competition.

Investing in a stadium, training ground, local infrastructure etc is also investment in a community, not just a club. I personally detach that from direct footballing activities.

If our owners suddenly splurged on record transfer spending and a record wage budget (what Wrexham have done in NL), then for me personally it would take a lot away from any 'success' that came from that. Of course I'd still be happy, but it wouldn't feel organic or natural, and I'd be more than willing to accept we only gained that success as a direct result of spending sh*t tonnes of money. I certainly wouldn't be trying to paint it up as a romance story and some 'great revival'.

You can't detach one from the other, they are intrinsically linked. They have invested in the team, infrastructure and community.

Don't be naive, the supporters can't believe their luck. Their might be a few killjoys like you, but they are in the minority. They are reveling in it and so they should. Of course, there will also be a few looking over their shoulders thinking it could all go pear shaped as quickly as it grew. That's natural of football supporters!

 

[RgYellows]

I believe it is assessed by an independent panel. Price of Football went through this a few months back with regard to the Premier League rules, can't remember the details.

If I go to the Price of Football website the top story is them undervaluing Chelsea by more than £2bn so I’ll remain sceptical on how easy it is to value things in football.

 

[SteMerritt]

If I go to the Price of Football website the top story is them undervaluing Chelsea by more than £2bn so I’ll remain skeptical on how easy it is to value things in football.

It's not 'them' undervaluing Chelsea, it is a look at the figures and working out what an expected value is based on a number of factors. The final sentence sums it up...

Therefore anyone bidding £2.5bn-£3bn for Chelsea is assuming that the business has been poorly run historically OR there are substantial untapped revenue sources (SuperLeague Mark II or NFT’s?) or cost savings to be achieved in the future…or the prospective owners simply want a trophy asset and are willing to pay a premium to acquire it.

The value of a club is always what somebody is willing to pay for it. The issue of sponsorship is different, it is easy to spot outliers. If whoever comes in to sponsor our shirts next season comes in and offers £10M for the privilege, it is very easy to see that is overpriced by looking at other deals for clubs of a similar stature to us.

 

[RgYellows]

It's not 'them' undervaluing Chelsea, it is a look at the figures and working out what an expected value is based on a number of factors. The final sentence sums it up...



The value of a club is always what somebody is willing to pay for it. The issue of sponsorship is different, it is easy to spot outliers. If whoever comes in to sponsor our shirts next season comes in and offers £10M for the privilege, it is very easy to see that is overpriced by looking at other deals for clubs of a similar stature to us.

Sorry, no.

You saying the £10m shirt sponsorship is overvalued is compared to an (unscientific) “expected value based on a number of factors”. Which makes it the same.

The first valuation he provides is based on the valuation of Man Utd, adjusted for differences in financial metrics. That’s better than comparing a headline sponsorship figure to “clubs of a similar stature to us” (with presumably no adjustment) and it turned out to be nonsense compared to what a buyer paid on an open market.

A club is worth what someone will pay for it. So is a shirt sponsorship. Only Man City can offer a sponsorship of (potential) English treble winners in 2024. Only Wrexham can offer sponsorship of a club owned by Ryan Reynolds. Good lawyers will win these arguments.

 

[bazzer9461]

The Conference again will have it's own rules, I don't know what they are. I'm pretty certain you can't just go and put massive money in via sponsorship details that are way above what the sponsorship is actually worth. The EFL will no doubt be looking at this.

Man City did this when they were bought out 20million per season shirt sponsorship

 

[SteMerritt]

Sorry, no.

You saying the £10m shirt sponsorship is overvalued is compared to an (unscientific) “expected value based on a number of factors”. Which makes it the same.

The first valuation he provides is based on the valuation of Man Utd, adjusted for differences in financial metrics. That’s better than comparing a headline sponsorship figure to “clubs of a similar stature to us” (with presumably no adjustment) and it turned out to be nonsense compared to what a buyer paid on an open market.

A club is worth what someone will pay for it. So is a shirt sponsorship. Only Man City can offer a sponsorship of (potential) English treble winners in 2024. Only Wrexham can offer sponsorship of a club owned by Ryan Reynolds. Good lawyers will win these arguments.

You are misunderstanding. He was looking from a potential return in investment angle, and said in the closing statement what exceptions would be (including vanity purchases). What a club is bought for is not considered by FFP, it's irrelevant. What FFP does with regards to sponsorship I believe is work out what a 'fair' price for sponsorship is, and only that amount is counted towards FFP. You can read about the Premier League rules by going here (The Times)

 

[RgYellows]

You are misunderstanding. He was looking from a potential return in investment angle, and said in the closing statement what exceptions would be (including vanity purchases). What a club is bought for is not considered by FFP, it's irrelevant. What FFP does with regards to sponsorship I believe is work out what a 'fair' price for sponsorship is, and only that amount is counted towards FFP. You can read about the Premier League rules by going here (The Times)

I am not misunderstanding. I did not say club valuations impacted FFP (go back and check). I said that attempts to calculate a “fair value” for purposes other than handing over your cold hard cash are often nonsense. A good lawyer can make a compelling argument for whatever valuation they want. I said that the attempt of your source to calculate a “fair value” in good faith gave an answer that was comical when compared to the actual value which was paid by a third party.

If you think Clearlake Capital invested in Chelsea for vanity then we have very different experience of private equity.

 

[SteMerritt]

I am not misunderstanding. I did not say club valuations impacted FFP (go back and check). I said that attempts to calculate a “fair value” for purposes other than handing over your cold hard cash are nonsense. They come down to who pays more for lawyers. I said that the attempt of your source to calculate a “fair value” gave an answer that was comical when compared to the actual value which was paid by a third party.

If you think Clearlake Capital invested in Chelsea for vanity then we have very different experience of private equity.

You were talking about value of clubs being overvalued or undervalued based on what was paid for them, in a discussion about sponsorship warping FFP, so I just clarified that point. Did you look at the link to the reported change in Premier League rules, which stated exactly what they do for perceived overly inflated sums for sponsorship? I'll quote it below...

This means that all new sponsorship deals will have to be submitted to the Premier League to be approved. An independent company will decide whether the proposed deal is of fair market value. The assessor will have access to a database of all other top-flight clubs’ deals so that it will be obvious if it is artificially high.

These rules were voted through around the time of the Newcastle take-over, when there were those from other clubs who were worried about sponsorship being used as a way to get large sums of money into clubs. That's all I said. I have no opinion on the value of Chelsea (or Man Utd), I don't care if they are over or under priced to be honest.

 

[RgYellows]

You were talking about value of clubs being overvalued or undervalued based on what was paid for them, in a discussion about sponsorship warping FFP, so I just clarified that point. Did you look at the link to the reported change in Premier League rules, which stated exactly what they do for perceived overly inflated sums for sponsorship? I'll quote it below...



These rules were voted through around the time of the Newcastle take-over, when there were those from other clubs who were worried about sponsorship being used as a way to get large sums of money into clubs. That's all I said. I have no opinion on the value of Chelsea (or Man Utd), I don't care if they are over or under priced to be honest.

The valuation of Chelsea was referenced as an example of how hard it is to value things in football. That’s it.

Thanks for the extract. A non-valuations expert says “it will be obvious” if it’s artificially high. I’m convinced! Thank the Lord you made sure I saw that powerful argument.

So let’s say that they’re valuing the Man City shirt sponsorship next season. How much data do they have on the value of primary sponsorship of English treble winners in 2023/24? Or will they be making the same sort of adjustments that led some bloke to conclude that £2.5bn was a bit toppy for something that was evidently worth £4.25bn two months later?

Weirdly this has not convinced me of the rigour of the current system. I’m going to get on with my day now. Always enjoy debating, Ste!

 

[SteMerritt]

The valuation of Chelsea was referenced as an example of how hard it is to value things in football. That’s it.

Thanks for the extract. A non-valuations expert says “it will be obvious” if it’s artificially high. I’m convinced! Thank the Lord you made sure I saw that powerful argument.

So let’s say that they’re valuing the Man City shirt sponsorship next season. How much data do they have on the value of primary sponsorship of English treble winners in 2023/24? Or will they be making the same sort of adjustments that led some bloke to conclude that £2.5bn was a bit toppy for something that was evidently worth £4.25bn two months later?

Weirdly this has not convinced me of the rigour of the current system. I’m going to get on with my day now. Always enjoy debating, Ste!

I'm not making an argument, I'm putting out links for information that I heard, and this is relevant to the discussion. I mentioned I heard discussion of it on POF podcast, and provided a link saying the same thing from a newspaper. Until it's tested, then it's guesswork as to how, or indeed if, it will work. You'd need to question the 'independent company' on that, and also on what information they are basing it on.

Not really sure why you are getting all annoyed really

 

[SirAndyOfCrosby]

You two are going to end up f**king.

 

[RgYellows]

You two are going to end up f**king.

He only responds to public messages on the main forum

 

[OUFCGav]

Wrexham's new shirt sponsorship deal is with United Airlines. No figures announced. They also signed a bunch more sponsorship deals. I don't think income will be an issue.

 

[Marked Ox]

Wrexham's new shirt sponsorship deal is with United Airlines. No figures announced. They also signed a bunch more sponsorship deals. I don't think income will be an issue.

Yep, don't think it'll be an issue. The benefit of publicity from the Hollywood links and Disney.

Edited: Change Netflix to Disney.