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CIMA Break Out Pigs Flu Update Valuing Superstars: Dr Noel Tagoe Talking with Superstars: Steve Berry.

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Presentation on theme: "CIMA Break Out Pigs Flu Update Valuing Superstars: Dr Noel Tagoe Talking with Superstars: Steve Berry."— Presentation transcript:

1 CIMA Break Out Pigs Flu Update Valuing Superstars: Dr Noel Tagoe Talking with Superstars: Steve Berry

2 © Private Eye

3 Valuing superstars (What Price Ronaldo & Rooney?) Dr Noel Tagoe

4 Employee Value: Dilbert’s Way

5 Financial Reporting Governed by FRS 10 & IAS 38 To show as asset or not? –Show as asset if transfer fee paid At what value? –Transfer fee To amortize or not? –Amortize over period of contract

6 Manchester United 2005 “The costs associated with the acquisition of players’ registration are capitalised as intangible fixed assets.” Notes to the Accounts, MUFC 2005

7 Implications: Man U 2005 Bought Players Ronaldo Rooney Ferdinand Saha Heinze etc Total Value = £75m Home Grown Players Scholes Giggs O’Shea G. Neville Brown etc Total Value = £0

8 Implications: Barcelona Bought Players Ronaldinho Henry Zambrotta Deco Eto’o Etc Total Value = €119m Home Grown Players Messi Xavi Iniesta Puyol Valdes Etc Total Value = €0

9 Manchester United 2005 “These costs are fully amortized over the period covered by the player’s initial contract. Where a playing contract is extended, the unamortized balance at the date of the amendment is spread over the remaining revised contract life” Notes to the Accounts, MUFC 2005

10 Implications: C. Ronaldo Man U Balance Sheet June 2009: –Between £0 million and £1.7million Sold to Real Madrid in July 2009 –£80 million Financial reporting missing a trick or two? Any lessons for valuation? –Based on player contribution to earnings

11 Man U Turnover Turnover Origin 200720082009 Match Day44%40%39% Media29%35%36% Commercial27%25% 100% Players contribution to these should reflect in their valuation

12 A Valuation Model Player Attributes Revenue Sources Performance Popularity Fan Base Media Match Day Commercial

13 Free Transfers? No Free Lunch “Buying team” pays implicit transfer fee –Salary premiums –Over contract period –DCF? Implicit transfer fee paid to owner of player registration –Player –Not originating team

14 Free Transfer: Michael Ballack YearsTotalNormalPremium 16,7603,1203,640 26,7603,1203,640 36,7603,1203,640 46,7603,1203,640 Total27,04012,48014,560 Implicit Transfer Fee

15 Summary Statutory accounts reporting of player value inadequate Management Accounting supported by good financial management can help Human capital valuable whether captured in statutory accounts or not “Value” and manage them with care

16 Steve Berry FCMA Talking with Superstars Rooney and Ronaldo – the elevator pitch

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19 Quick to act Directing Competitive Decisive Seeks change Unafraid of risk In stress and conflict situations: Tendency to become angry, short-tempered and intolerant of others mistakes May also take over and do it their way Gets louder and goes up on the ‘temperature’ scale on conflict

20 Tenacious Practical Careful Impartial Firm Methodical In stress and conflict situations: May become stubborn, overly critical – Unwilling to shift position on an argument, position or situation Will stick with something no matter what sometimes as a matter of principle

21 Considerate Modest Trusting Helpful Responsible Seeks improvement In stress and conflict situations: May sulk, become moody and over-emotional – Eventually give in as an attempt to remove or avoid the conflict, regardless of the failure to complete the task at hand Could head away from conflict – May seek refuge in a safe environment

22 Flexible Sociable Empathetic Adaptable Resourceful Humorous In stress and conflict situations: May become playful and use humour to dismiss serious events jokingly Will avoid conflict and danger using charm, wit or by ensuring the source of the conflict is avoided – e.g. physically removing themselves from conflict

23 Competence © Stephen Berry & Neos Learning Ltd Focused Competitive Rapidity Results Taking control Taking risks Activity

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25 CIMA Break Out Thank You


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