We asked AI to value Sheffield Wednesday - It's less than the £100m Chansiri wants for a takeover | OneFootball

The Sheffield Wednesday owner Dejphon Chansiri is refusing to sell the club for less than £100m, so FLW asked ChatGPT for its valuation of the club.

Sheffield Wednesday owner Dejphon Chansiri is reported to be refusing to sell the club for less than £100 million, so FLW have asked AI to see what it thinks the club is really worth.

With less than two weeks to go before the start of the new Championship season, Sheffield Wednesday remain in crisis.

The club is under a three-window transfer embargo as a result of issues relating to the late payment of wages and HMRC debts, as well as money owed to clubs for previous transfers, while two players have already left the club over the late payment of wages.

As if that wasn't enough, there have been ongoing questions over whether Danny Rohl would be returning for the new season amid interest from other clubs, while Hillsborough could start the season with its North Stand closed after a safety certificate was refused after extensive corrosion was found in its roof.

Takeover talk has been swirling around the club all summer, and it's known that offers to buy the club have already been refused by Chansiri. So, with The Sun having reported that the owner is refusing to sell the club for less than £100 million, Football League World have asked ChatGPT what it considers the true value of the club to be.

AI values Sheffield Wednesday at £40m-£50m

ChatGPT's valuation of Sheffield Wednesday indicates that Dejphon Chansiri will end up disappointed if he expects to receive nine-digit sum for the club.

AI values the club at less than half of Chansiri's valuation, calculating that the club is worth no more than between £40 million and £50 million on the open market.

The basis for this valuation is the commonly-held assumption that clubs tend to sell for somewhere between 1.5 and twice their annual revenue. Wednesday's annual turnover for the 2023-24 season was £26.3 million, leading to this ballpark figure.

This figure is exactly the same as the one that football finance guru Kieran Maguire gave the Sheffield Star when they spoke to him about Wednesday's woes at the start of June, and it's a long way from Chansiri's valuation of the club.

Establishing the value of a football club is far from a precise science

The biggest single reason why these calculations can only be given in the broadest possible terms is that there is no fixed guide to the value of a football club. Ultimately, what a football club is worth is how much an owner is prepared to sell it for and what a buyer is prepared to pay for it.

And with Sheffield Wednesday, things start to get very complicated, very quickly. Consider, for example, Hillsborough itself. This is one of England's grandest old homes, but there are two immediate complexities with regard to it that have to be taken into account.

Firstly, it's in a terrible state of disrepair, to the extent that a safety certificate for its North Stand has been refused ahead of the new season. And secondly, it isn't owned by the club; rather, it's owned by a third-party company owned by Chansiri, to whom Wednesday pay £2.5 million a year in rent. What anyone would be prepared to pay for the club would be heavily influenced by what happens to ownership of the stadium itself, and that is far from clear.

Furthermore, there is the small matter of the fact that Wednesday have been losing money for years, and currently have considerable debts that need to be cleared as a matter of urgency. Any new owners would not be buying what could reasonably be described as a "healthy" business, in any conventional sense.

Speaking to the Sheffield Star at the start of June, Kieran Maguire said that, "Since Dejphon Chansiri acquired Sheffield Wednesday Football Club in 2015, the club has lost somewhere in the region of £150 to £160 million", and Chansiri's inflated valuation of the club is almost certainly at least in part driven by a desire to recoup some of the money that he's put into it.

If anything, it looks as though Chansiri is falling victim to a variation of the 'sunk cost fallacy', in which one can start to behave irrationally, because walking away can make it feel as though you've wasted resources. Speaking to The Athletic in June, Adam Shaw, whose consortium had two bids for the club knocked back by Chansiri earlier this year, confirmed that those bids were £48 million and £55 million, both figures that fall within the parameters of the sort of valuation that we would expect to see for the club.

Given that Chansiri described the first of these bids as "derisory", it could be a long time before someone makes an offer for Sheffield Wednesday that the owner does find acceptable.