West Brom takeover could only cost £75million if Guochuan Lai sells – Finance Expert
We’re delighted to welcome football finance expert Dr Daniel Plumley as our exclusive West Brom columnist. Each week he’ll be giving his views on the biggest talking points at The Hawthorns...
Dan Plumley insists £75million is a realistic valuation for West Brom if Guochuan Lai was to sell up and green-light a takeover of the club.
The finance expert says that previous valuations of £175million are “very ambitious” given the position of the club both on and off the pitch at The Hawthorns.
It was reported by The Athletic on 6 March that West Brom are open to takeover offers with Lai yet to repay his own £5million loan debt back to the club.
“For me, that is unrealistic,” he exclusively told West Brom News.
“It is tricky to get a read on the true valuation, but I’ve been involved in a fair bit of modelling throughout my time that suggests you can get to a thereabouts figure. It is dependent on league position, West Brom if you look at some of the things we can put in the mix, you have to look at the revenue and assets of the club, the debt position and loans and things like that.
“You then have some little things that are really tricky to measure around, the fanbase, history, size of club and geographical location, that’s the tricky stuff. I think you can get to something more realistic, for me, which is £75million as a valuation and that’s based on them being a Championship club.
“You might stretch that a bit further if you bring in the fanbase and history to push the price up a little bit through those factors, but again, the counter to that is every year they are in the Championship, it’s going to drop a little bit because it’s linked to parachute payments and revenue.
“Next year, you may be looking closer to the £50million valuation, so it fluctuates dependent on league position.
“Bottom line for me, £175million is very, very ambitious given the position of the club, I would take £100million of that, as of today.”
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