Valencia CF Business plan and financial valuation

Abstract

The purpose of this work is to understand how changes in the strategic decisions in a football team administration can influence in the achievement of competitive and financial objectives. The selected team to conduct this work will be Valencia Club de Fútbol, a historical top tier team in Spain, which is currently underperforming in the Spanish League due to a naïve, inefficient management of the strategy and the resources of the team. Of course, profitability, as in any other industry, is crucial to maintain a sustainable business. However, in order to achieve financial stability, the results that the team may achieve during the season will be decisive in the final economic result of the year. Therefore, this paper will be focused on the core activity management and how the strategic plans can be settled in order to obtain the maximum outcome from the team (football results), and consequently from the firm (economic and financial growth). Finally, I will perform a financial valuation of the firm in order to know the maximum price to be paid by a hypothetical potential investor willing to undertake this business plan. The difference between this price and the current value of the Equity will set the range of future negotiations and will determine the attractiveness (over or under valuated) of the firm. To be able to put into context all the information regarding Valencia Club de Fútbol, during the course of this paper I will develop several analyses about the football industry. The situation of the whole industry, the Spanish league and some teams in particular will be subject of a more in depth analysis.