The Value Appraisal Of Professional Basketball Club Based On Scenario Analysis Method

The value appraisal of professional basketball clubs is a new topic and new field in the field of asset appraisal in China,especially in the context of the uncertainty of annual earnings of basketball clubs due to the closed games of the COVID-19.Compared with the value appraisal of professional football and professional basketball(such as National Basketball Association)in Western countries,like Europe and America,the theory and method of value appraisal of professional sports clubs in China are still in the exploratory stage.The purpose of this paper is to obtain an enterprise value of professional basketball clubs that can be relatively accepted by all parties in the market through the research on the value appraisal methods of professional basketball clubs,and create favorable conditions of Chinese professional basketball leagues for the listing,financing,transfer,etc.Nanjing Tongxi Basketball Club was selected as the research object.First of all,using Cite Space for literature visualization analysis,this paper combed and analyzed the cash flow value appraisal,sports franchise keyword clustering atlas and keyword clustering table,evaluated and analyzed the relevant domestic and foreign literature of traditional enterprise value appraisal models and scenario analysis theory.Secondly,based on the value appraisal model of Free Cash Flow to Firm,the value of Nanjing Tongxi Basketball Club is evaluated by traditional income method of enterprise value appraisal.Thirdly,in combination with the background of the closed competition of the COVID-19,the scenario analysis method and Monte Carlo simulation were introduced to modify the discounted value of the free cash flow of the Nanjing Tongxi Basketball Club enterprises.From the perspective of the macro industry,the perspective of the middle league,and the perspective of the team,the uncertainties that may have an impact on the value of the club were identified,and three scenarios were set: optimistic,general,and pessimistic scenarios,In this way,Nanjing Tongxi Basketball Club is more in line with the objective and practical enterprise value.Finally,it compares and explains the differences between the traditional income method and the modified and improved appraisal model and their causes.The results show that:(1)The introduction of scenario analysis can bring uncertain factors such as epidemic situation and industrial development into consideration of the club’s future development status,which has certain applicable value in evaluating the enterprise value with greater uncertainty in the future;(2)In the process of scenario construction,the probability of future scenarios can be predicted through historical data and cross factor analysis,which can reduce subjectivity and improve the accuracy of value appraisal results.(3)Through Monte Carlo simulation,the scientificity and accuracy of relevant data are furtherly improved,and the impact of relevant uncertain factors on enterprise value appraisal is reduced.There are three innovations in this paper: first,the innovation of income forecast.With reference to the income classification method in the annual report of Nanjing Tongxi Basketball Club,combined with the value composition method in the Forbes value appraisal results and the actual situation of the appraised object,the income forecast of the appraised object is mainly divided into four parts: market,gymnasium,league sharing,and transfer.The second is the innovation of scenario construction indicators.The sports industry,CBA league and Nanjing Tongxi Basketball Club are determined as corresponding indicators from the macro,meso and micro perspectives,and then the three scenarios and their probabilities are determined and the value is calculated.The third is the innovation of application scenarios.According to the unique characteristics of the basketball industry and the identification of internal and external risks of professional basketball clubs,three future scenarios are constructed and the probability of the three future scenarios is determined.In a word,this research enriches the theory and method of enterprise value appraisal,expands the scope and field of enterprise value appraisal,and the research results have certain theoretical value and application value for the enterprise value appraisal of professional sports clubs.It also provides a new solution for reasonably determining the enterprise value appraisal under the background of multiple uncertain factors.