How Much For Hibs In 2010?

[Speedway]

I was reading through all the news about the East and thinking about how ER will look when it's finished and contrasted that with the events of July 1990.

When Waugh sold to Duff & Gray (funded by Rowland) he sold us to a guy who wanted a return on his investment sharpish.

Rowland's investment Vehicle 'Inoco plc' was the organisation, lest we forget that agreed to sell it's 29.5% stake to Wallet Merger for 40p per share.

This valued Hibs as a whole (in 1990) as being worth £6.121m which was interesting since Murray had bough Rangers for only £8m a couple of years prior.

Looking at what has happened since then, and the condition of Hibs balance sheet in the Farmer/Petrie era; what do you think Hibs would cost someone now, including a valuation on goodwill and branding?

[TRC]

I think it would be interesting to see why don't we ask rodders sure he'll give a completely straight answer:wink:

But i woukld say bout £15m once the new stand is built and current squad.

[jdships]

I was reading through all the news about the East and thinking about how ER will look when it's finished and contrasted that with the events of July 1990.

When Waugh sold to Duff & Gray (funded by Rowland) he sold us to a guy who wanted a return on his investment sharpish.

Rowland's investment Vehicle 'Inoco plc' was the organisation, lest we forget that agreed to sell it's 29.5% stake to Wallet Merger for 40p per share.

This valued Hibs as a whole (in 1990) as being worth £6.121m which was interesting since Murray had bough Rangers for only £8m a couple of years prior.

Looking at what has happened since then, and the condition of Hibs balance sheet in the Farmer/Petrie era; what do you think Hibs would cost someone now, including a valuation on goodwill and branding?

The comparison with Murray/Rangers is a valid one :agree:
There were two main stumbling blocks to the "takeover ."
1. WM would not accept that valuation . He wanted it set at £4.8m.
The "money men" involved would not put up a "false" valuation and he threw the toys out the pram big time!!
They maintained their position although wether it was put in writing I know not ! I only heard it verbally
2. WM wouldn't meet Duff & Gray's demands ( this completely apart from Rowland who as you say wanted out with his money) which were based on a valuation of 6.12m.

You pose a good question and I will be interested to see what replies come form the "finance experts :thumbsup:

[Vini1875]

The stadium was valued at £15M and the training centre at £5M according to the last accounts. The squad is worth a few million. Branding and good will I have no idea how you quantify that. STF has had his money back and the club has not much debt although still running at a slight loss.

I don't think it all adds up to £25M. It would be more like a buyer being able to prove they had enough money to carry us forward in a substantial way. I doubt STF would simply say give me £25M and its yours. Having said that I am sure he will have a figure that he would take, given the right assurances.

He no longer has to fork out any money and while we are doing well it is kudos to him. Why would he want to sell, it's not like he needs the money?

[ScottB]

The stadium was valued at £15M and the training centre at £5M according to the last accounts. The squad is worth a few million. Branding and good will I have no idea how you quantify that. STF has had his money back and the club has not much debt although still running at a slight loss.

I don't think it all adds up to £25M. It would be more like a buyer being able to prove they had enough money to carry us forward in a substantial way. I doubt STF would simply say give me £25M and its yours. Having said that I am sure he will have a figure that he would take, given the right assurances.

He no longer has to fork out any money and while we are doing well it is kudos to him. Why would he want to sell, it's not like he needs the money?

Pretty much yeah. I thought the idea was Hibs were working towards the situation that they'd be run by some sort of Trust etc once Sir Tom eventually passes on. He's always stated he wouldn't sell the club to anyone who didn't meet his standards, so that seems likely to me anyway.

[jdships]

Pretty much yeah. I thought the idea was Hibs were working towards the situation that they'd be run by some sort of Trust etc once Sir Tom eventually passes on. He's always stated he wouldn't sell the club to anyone who didn't meet his standards, so that seems likely to me anyway.

Agree with what you say :agree:
STF has said more than once in company that his wish would be for some type of Trust to run HFC in the future.

:flag:

[Caversham Green]

At the risk of sounding facetious, the club is worth what someone is willing to pay for it or what the owners are willing to accept for it. Back in the day Hibs was a plc, which meant that the shares could be publicly traded, which gave them some degree of market value. Now, as a private company, there's no market in the shares, so there's no way of establishing a value for individual shares, so we can only value the business as a whole.

Looked on purely as an investment, there's little scope for income yield as the stated policy is to spend £1 less than is earned, and the customer base would rebel if that policy changed - that means no dividends, so you're relying on capital growth. On the CG side, there's not much scope for increasing the customer base (it certainly can't go over 20,000 without further investment) and there's not a great market for SPL clubs no matter how successful.

On asset value, I would argue that the new stand is not going to increase the value of the business. It has increased the earning potential by increasing "production" capacity but the market for that extra capacity has yet to be proven and in the meantime the cost of the stand has come out of liquid assets. As a building ER is not worth a lot even with the new stand because not many people would want to buy a football stadium in Edinburgh whether it holds 17,500 or 20,000. So in resale terms ER remains only worth the land it's built on - ditto East Mains. That leaves us with the players - valuation there is highly subjective, and in any case profits arising will not yield dividends to the investor because of the income policy.

Goodwill and branding are tied up in my comments above and the value there really depends on how much potential there is for expanding from a good national image into an international one and also whether you can tie it in with other business interests (I think this is what is going on in Yamsville, but it doesn't appear to be very successful). Personally, I don't see a great deal of scope there and any that is would have to be created by the new owner.

So, I've used up a lot of words to say very little - a better analyst than I could write a book to say pretty much the same thing. Bet you're sorry you asked.

[jacomo]

Good points though, Caversham. It is highly subjective.

Hibs owns real assets, but Easter Road can't be used for anything other than a football stadium, and while the training centre may be worth £5m, you could never sell it to anyone to get that money back. Who would buy a fully-equipped training centre in East Lothian if Hibs decided to sell?

I would guess though that the "spend £1 less than we earn" formula could be unpicked by a less scrupulous owner, and anyway would be undermined in the case of leveraged buyout.

I would love to see Hibs become a community-owned trust. I am not sure how this would come about, though, unless STF just wrote off the entire investment.

[Caversham Green]

Good points though, Caversham. It is highly subjective.

Hibs owns real assets, but Easter Road can't be used for anything other than a football stadium, and while the training centre may be worth £5m, you could never sell it to anyone to get that money back. Who would buy a fully-equipped training centre in East Lothian if Hibs decided to sell?

I would guess though that the "spend £1 less than we earn" formula could be unpicked by a less scrupulous owner, and anyway would be undermined in the case of leveraged buyout.

I would love to see Hibs become a community-owned trust. I am not sure how this would come about, though, unless STF just wrote off the entire investment.

Stenhousemuir recently becan a Community Interest Company which I think is ideal for football clubs. It's never going to happen, but I'd like to see this being a pre-requisite of joining football leagues and associations.

[Vini1875]

I'm not sure about the trust idea. It's fine if you are Barcelona and have a lot of people willing to put money in or even if you are a very small club which is expected to run on a shoe string. However for Hibs I think it is very useful to have a guy like Tom Farmer behind the scenes, who doesn't meddle in the club too much, but will lend the club a few quid when needed. It's the best of both worlds.

[Liberal Hibby]

I'm not sure about the trust idea. It's fine if you are Barcelona and have a lot of people willing to put money in or even if you are a very small club which is expected to run on a shoe string. However for Hibs I think it is very useful to have a guy like Tom Farmer behind the scenes, who doesn't meddle in the club too much, but will lend the club a few quid when needed. It's the best of both worlds.

Possibly - but rich disinterested owners are very few and far between. And what happens when the next 'football minded' millionaire comes along making claims that they only have the best interest of the football club at heart?

The only group that will always have the long term interests of the club at heart are its fans, which is why they (and possibly the wider community) should be the owners through some sort of trust.

[7Hero]

as previously stated its only valued at what somebody would want to pay for it.

How anybody thinks they can buy a football team and make money is beyond me, got to be zipped up the back to think that. Unless there is some guy out there who a) loves the club and b) has money to burn then the only way is a trust.

I must say after years of slating hibs im finally delighted to see them making real progress and it feels good. Would be crap to lose this by the club being ran badly again.

[TrinityHibs]

as previously stated its only valued at what somebody would want to pay for it.

How anybody thinks they can buy a football team and make money is beyond me, got to be zipped up the back to think that. Unless there is some guy out there who a) loves the club and b) has money to burn then the only way is a trust.

I must say after years of slating hibs im finally delighted to see them making real progress and it feels good. Would be crap to lose this by the club being ran badly again.

I think Fergus McCann did okay out of Celtc. As did they. To be fair he did start from a low point but did pocket some serious cash