Værdiansættelse af fodboldkontrakter

Magnus Langløkke Konradsen & Mathias Mørch Hansen

Student thesis: Diploma thesis


In the recent decade, the European economy has been subject to an annual core inflation of 0.86%, on average. One significant driver for the inflation is the Football business. The compounded annual growth rate in the average transfer fee over the timespan constitutes to 8.68%, which exceeds the general core inflation rate, hence the money supply in the Football economy has increased significantly. The steep development has increased the awareness and the need for information from the primary stakeholders, as the need for further clarification of the value creation is evident, hence the complementary need for raising capital. The acquired contractual player rights are capitalized in the annual reports, at cost price under the current legislation, IFRS, in accordance with IAS 38. The principles for recognition and measurement do not align with the focus and information needed from the primary stakeholders, as the accounting principles reflect historic transactions and do not incorporate an assessment of future positive cashflows, mainly regarding the potential transfer fee for the coherent player’s license/contractual right. To accommodate with the primary stakeholder’s need for information a study has been performed, based around a multiple approach on historical trades in the transfer economy, to derive which metrics drive value and how these can be measured reliably to reflect a fair value measurement in an orderly transaction under the current market conditions, equaling a market value estimate. The study has been based on the relation between accessible and observable statistics, such as goals, assists, performance rating, potential and injuries. The statistics combined relation to historical trades have been valued using a multiple regression model, which has derived a formula that explains 77% of the historical transfer fees. Certain other observable value metrics have been added to the derived valuation formula, such as the effect of expiring contracts, hence the impact from risk aversion on the pricing of assets in general. The IAS 38 does not permit a fair value recognition of contractual rights since the transfer of player licenses does not meet the requirements of the active market definition. It is evident that an imbalance occurs and therefore the need for changes to the current accounting principles is inevitable. Additionally, a cost/benefit-analysis does not reflect high direct losses or implicit losses related to the recognition of the fair value. Furthermore, the market value model has sufficiently maximized easily accessible and observable value metrics to ensure the reliability in the measurement of the fair value. It is therefore recommended that the IASB should initiate a more in-depth study than the current basis for conclusions for IAS 38, which magnifies the fair value measurement of intangible contractual rights in sports, to ensure a true and fair view of the annual report to accommodate with the identified imbalances

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2021
Number of pages105