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This morning’s session in the Sheffield United ownership trial begins at 11 with more evidence from football finance expert Douglas Harmer. Later we will be hearing from two property valuation experts about the value of the assets associated with the club #sufc #twitterblades
And in other news, the weather is as bad down here as people tell me it is up there ☔️
We’ve begun now and Paul Downes QC is questioning Douglas Harmer about his valuation of the club. Picking up where we left off by talking about the ALK bid for the club that was being lined up by McCabe in late 2017 #sufc #twitterblades
Downes is asking Harmer to look at a document detailing the proposed deal. We are not being able to see the full version to protect ALK’s commercial confidentiality. The deal proposed the shares in the club would cost £7m and its property assets £33m #sufc #twitterblades
Downes says Harmer can’t discount the evidence about the previous real or proposed transactions. Harmer says he thinks they are of limited value in determining the value of the club as they relate to a club in very different circumstances #sufc #twitterblades
Downes says Harmer is making an argument. ‘I am interested in your expert opinion not points you can make for your client’. Harmer says he gives little or no weight to the £7m ALK deal. Harmer says it doesn’t represent a sensible valuation for #sufc #twitterblades
Downes: ‘Because it doesn’t fit with your purview you are prepared to disregard it’. Harmer: ‘It doesn’t look like a reasonable price for a club that had a decent chance of promotion to the Premier League’ #sufc #twitterblades
Downes says that the average of all the deals comes out at a figure of around £23m. But given that that includes some deals that are on the high side then Harmer’s valuation represents the top end of the range that the club could expect to be sold for #sufc #twitterblades
Downes asks Harmer to agree with him that the figure arrived at by Good of £30m-£35m for the valuation of the club in early 2018 is too high. Harmer says the two experts have come at the valuation in two different ways #sufc #twitterblades
Downes: ‘Why can’t you just answer the question? This is a product of your witness preparation training. You are trying to figure out where the questions are going and looking for hidden traps’. Harmer says he is not #sufc #twitterblades
Now talking about the factors that influence Harmer’s Premier League valuation of the club. Downes lists half a dozen factors which Harmer agrees with including the club’s financial situation, brand and if it owns its own stadium #sufc #twitterblades
Downes arguing that the valuation arrived at by Harmer of £100-120m is not based on methodology but his gut instincts. Harmer says he completely accepts there is limited science behind his approach and it is more akin to an art #sufc #twitterblades
Downes says Harmer’s valuation has nothing to do with the turnover of the club and all he is doing is trying to ‘peg’ where he thinks #sufc should be. Harmer says the revenue multiplier is a ‘sanity check’ for his methodology #sufc #twitterblades
We’ve had another of the regular breaks for the stenographers but the press and public will also be excluded for 5-10 minutes when the court comes back so Mr Harmer’s confidential evidence can be heard #sufc #twitterblades
The confidential evidence relates to work Mr Harmer has done for other clubs which he says cannot be made public and even referring to them as club x or club y could reveal who they were to someone with knowledge of their finances #sufc #twitterblades
I wasn’t expecting it but it’s actually been quite interesting this morning. McCabe’s lawyer is effectively saying that Prince Abdullah’s expert has plucked a figure out of thin air and that that supports their view that the Prince’s valuation is too high #sufc #twitterblades
We’re back after the break and Downes is asking about the ALK Capital deal now the club is in the Premier League. Downes: ‘As at today the implied value of £37m of that deal is a far better valuation for #sufc than your valuation of £100-120m’ #twitterblades
Downes says the ALK deal contains a basic figure and then possibly additional payments based on performance further down the line. ‘No one is going to pay £100m for a club that might be back in the Championship in a years time’, says Downes #sufc #twitterblades
Harmer accepts these kickers are a feature of many deals but says he doesn’t accept that that means his starting point of £100-120m for the Premier League valuation of the club is wrong #sufc #twitterblades
Downes just finishing up his questioning of Harmer. We’re then going to have a short period of reexamination by Prince Abdullah’s lawyer Andreas Gledhill QC #sufc #twitterblades
Gledhill begins by asking Harmer about evidence he gave to the court yesterday about the importance of turnover in loss making businesses like many football clubs. Harmer says a bigger turnover means clubs can pay players more #sufc #twitterblades
Gledhill now asking him about the six transactions Downes asked Harmer about yesterday. Gledhill asks how relevant the transactions are as four of the six relate to the time that #sufc were a league one club. Harmer says they are clearly of limited relevance #twitterblades
And just like that the evidence in the trial is over. I didn’t realise but the sides have already agreed that the property valuation evidence will not now be heard. Lawyers and judge now discussing the timetable for the test of the proceedings #sufc #twitterblades
*rest
After a brief period of legal discussion we have adjourned until Monday June 25 when two days of oral closing arguments will begin. I’ll post a short review of today later and it’ll be in the paper tomorrow. Thanks for following. Dan. #sufc #twitterblades
Sorry, just realised I’ve got my dates wrong. We will in fact be back on Monday, June 24 for two days of oral closing submissions. See you then. D. #sufc #twitterblades
