How do you value a soccer team?

Why this is in the vault

Part IV (finale) of CFO Secrets' four-part Manchester United case study — a guest Q&A with sports-business CFO Jason Hershman working through why standard DCF fails for trophy sports assets and what actually sets the price, as a clean worked example of terminal-value-only valuation reasoning.

The core argument

Hershman starts by showing DCF is close to useless for a club like Manchester United: three years of cumulative unlevered free cash flow across peer clubs nets to roughly zero, so any DCF becomes "an exercise in projecting years of losses, then popping on an EBITDA exit multiple to the terminal value which will make up more than 100% of EV." A reverse-DCF check is more revealing — United's current share price implies either 16% perpetual revenue growth or 20% perpetual FCF margins, against an actual Glazer-era track record of 6% revenue growth and 7% FCF margin; the Glazers' reported £6bn floor implies 21% growth or 33% margins, neither remotely supported by history. Since cash flow can't anchor the number, Hershman argues the club is priced on three unmodelable drivers instead: scarcity (20 Premier League slots, fixed forever, against a growing pool of billionaire buyers — Chelsea's sale drew 12 credible bidders), brand (United's commercial revenue "quadrupled under this ownership while the trophies dried up," i.e., decoupled from on-field results), and legacy (multi-generational fan loyalty that survived a 15th-place finish in 2024/25). Because none of those cash-flow to a multiple cleanly, the sport prices trophy clubs on revenue multiples instead of earnings, with a wide precedent range of 4.8x-8.8x built from Liverpool's 2026 Bezos-consortium stake (7.1x-8.5x), the forced 2022 Chelsea sale (£4.2bn, low comparability given the sanctions-driven 90-day timeline), and Atlético Madrid's 55% Apollo sale (~6x revenue). Against that range, the Glazers' reported £6bn ask prices United at 9.1x revenue — above every precedent transaction in the sport's history. Hershman closes by laying out three realistic exit paths (Ratcliffe buying control — least likely, given INEOS carries £18bn of debt at 6.5x earnings and a negative S&P outlook; a Gulf-capital or sovereign-adjacent buyer clearing the Owners' and Directors' Test — the "romantic" 2022 near-miss with Sheikh Jassim's £5-6bn bid; or continued Glazer control) and a closing return-attribution number: the Glazers have already taken ~$1.9bn off a ~$500m original equity check (3.74x MOIC), which becomes 8.1x invested capital / 13% IRR marking the remaining stake at today's price, or 11.2x / 14.3% IRR at their £6bn ask.

Mapping against Ray Data Co

The direct connection is to the same /verify-strategic-output calibration discipline flagged in the Part III (capex) note, but this piece is a sharper worked example of a specific failure mode: substituting a terminal-value multiple for an unmodelable cash-flow story, then dressing that multiple in precedent comps to make it look more rigorous than it is. Hershman is explicit that DCF here is "a path to end up wrong in great detail" — which is the exact shape of the failure the calibration rubric exists to catch in RDCO's own investing-thesis outputs: when a DCF or bridge chart has no reliable near-term cash flow to discount, the honest move is to say so and switch to a comp-multiple framework with a stated range, not to force a DCF number and present it with false precision. The reverse-DCF technique itself — solving for the growth/margin assumptions a given price implicitly requires, then checking those against actual history — is a reusable pattern worth carrying into paper-trade thesis reviews: it converts "is this price justified" into a checkable comp instead of a vibe.

Related

• [[2026-08-22-secret-cfo-manchester-united-stadium-capex-decision]]
• [[2026-08-08-secret-cfo-manchester-united-balance-sheet-history]]

⚠️ Sponsorship

Sponsored by Summation (AI Analyst product) — its fourth confirmed appearance overall and third within this specific Man Utd series (Part I filed 2026-08-08, Part III filed 2026-08-22, now Part IV), confirming the README's pattern note that Summation has become the de facto standing sponsor for CFO Secrets' longer analytical/business-history series. Every chart (capitalization table, bid ladder, equity ownership pie, peer cash-flow bridge, precedent multiples, valuation football field, return-attribution bridge) is generated inside Summation and carries a "verified" click-through link with UTM tracking, plus an in-body sponsor testimonial from the host ("I'm a bit cynical about claims of AI-powered analysis... it's been so invaluable, I might even offer Addison a job"). Same bias implication as the two prior installments: the sponsor is positioned as the verification layer behind figures (revenue multiples, IRR/MOIC, implied growth rates) that are otherwise unattributed to a primary source, which reads as more rigorously sourced than an unsponsored equivalent piece would credibly claim.