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EFL commission independent ground valuation?


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12 minutes ago, Animis said:

 

MK - can you just confirm that the accountancy regs essentially leave the valuation up to the client to arrange through a regulated (RICS) company and that signed-off valuation is taken as correct, subject the correct checks on report process rather than the valuation methodology.

 

Yes the auditors cannot do the valuation. They are there to check the figures within the company accounts. 

 

The auditing standard is very robust on the work that should be done

 

- is it done by an appropriately qualified person (so it does not have to be a RICS valuer)

- that the valuation mechanism chosen is correct, that the parameters used 

- that the valuation is independent and free from bias

- is there an alternative approach, different assumptions that could be used

 

What you can't do is just sign it off because it was prepared by a 3rd party 

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7 minutes ago, Ronnie Starling said:

The value of something is what the purchaser is willing to pay and what the seller is willing to accept.

 

Not in this case - far more technical approach 

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They'll look at all three clubs and blame only us. It's nailed on. They phooking hate us. Any possible reason to get at us for the semi disaster they will.
Anything to be seen that they are handing out justice, of any kind.

Reading ?  no chance... Derby... oh no... it's Wayne Rooneys Derby.

US ?  fizz em, they'll say, lets take em to phooking town.

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8 minutes ago, Ronnie Starling said:

The value of something is what the purchaser is willing to pay and what the seller is willing to accept.

 

Ive got a knackered old Transit van im selling and ive offered it to DC for £80k . Just waiting for him to get back to me. 

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In Derby’s case, the owner and chairman Mel Morris used a separate company to purchase the ground for £80 million — with a deal to then lease it back to the club — when it was listed as an asset on the club’s books with a value of only £41 million.

 

This will be the reason they are looking into it. If we have not valued our too high we should be alright.

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From the article in the Star.

Kieran Maguire, a lecturer in football finance at the University of Liverpool, said: "It's a strange one.

"It's poor monitoring by the regulatory bodies, but the clubs have done nothing wrong from the perspective of compliance.  "I think you can say from a sporting fair play perspective, they've shown the FFP rules to be a farce." 

 

 

Like when Leicester went into admin they'll close the loophole and anybody else will get sanctioned. At the time we and the other clubs did it it wasn't legal or illegal it was a loophole. Any good lawyer could get any sanctions against us thrown out
Hopefully, the EFL will.realise that FFP needs scrapping or at the very least the debt amounts need revising upwards.

Edited by darra
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Only ever had a house valued but I do remember that when you are looking at insuring the house they take into account how much it would cost to demolish the house and rebuild it when looking at buildings insurance and it is more than the value paid for the house. Maybe that's how the valuation was made?

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13 minutes ago, mkowl said:

 

Yes the auditors cannot do the valuation. They are there to check the figures within the company accounts. 

 

The auditing standard is very robust on the work that should be done

 

- is it done by an appropriately qualified person (so it does not have to be a RICS valuer)

- that the valuation mechanism chosen is correct, that the parameters used 

- that the valuation is independent and free from bias

- is there an alternative approach, different assumptions that could be used

 

What you can't do is just sign it off because it was prepared by a 3rd party 

 

Thanks - I think you'll find it does have to be a RICS valuer as the valuation will need to be 'red book'.

 

To apply a value, an alternate use wouldn't be used in this case, as it could only be a use, which the assumptions proved could be actually developed. Of the alternative land values, residential has traditionally been the highest, and Hillsborough could feasible be residential subject to planning consent and restrictions (flooding etc.). If you deducted the demolition costs, the club could only feasibly raise up to £5m.

 

To have got to £60m, it would have been based on existing use taking an hypothetic annual rent x an investment yield rate x the years of the lease.

 

Hypothetical rent could be based on examples/comparables like Leeds when the rented their ground which was reported to have been £1.7m/annum, so say £2m/annum adjusted for inflation.

 

The yield is likely to be mid range due to the competing risks of investors' view of the stability of a football club's ability to pay, and whether there is a market. Clearly football grounds are for the sole use of the particular football club so on one hand they ain't going anyway, but the financial sustainability is always in question - see Bury.

 

Clearly this is all academic as DC essentially set two companies up to undertake the transaction. I do wonder whether he has to actual set up a rental stream between the two companies to justify the above - not in a valuation sense, but accountancy.

 

 

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Can someone put me right on this.

 

Whereas the Premier league seem to wrap their clubs in cotton wool & reward & protect them at every opportunity, it seems the EFL try and make it as difficult as possible for the clubs under their banner.

 

They initially stabbed at a random figure for FFP before they were forced to ‘re brand’ it, made life harder for clubs season on season by not index linking the amount & then retrospectively trying to again, screw clubs that have been forced to try & maximise assets because of said arbitrary, non index linked FFP.

 

It smacks of a teacher punishing a kid they are supposed to care for because the kid shows too much ambition & takes on private tuition.

 

They will no doubt try & quote the Bury situation (laughably), as justification, which is down to one mans greed & the EFLs abject failure to comply with ‘due diligence’ checks by their own staff.

 

Not unlike the SYP situation where they c*ck it up & then punish us for their admitted said c**k up.

 

 

 

 

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