Football Field

A football field is a chart that shows the valuation ranges of different methods side by side. Each method produces a range, which is displayed as a horizontal bar. This creates a quick overview of the plausible range of company value.

It typically contains trading comparables using multiples of listed peers, precedent transactions, a discounted cash flow analysis with sensitivities on cost of capital and growth, for leveraged buyouts a reverse calculation from a sponsor's target return, and, for listed targets, the share price range and analyst price targets. The presentation is deliberately built on ranges rather than point values, because every method rests on assumptions and a single figure would suggest a precision that does not exist. The overlap of the bars is what matters most: where several independent methods converge on one area, that is a strong argument in negotiation, while widely diverging results point to inconsistent assumptions or a situation that is hard to value.

Comparability of levels deserves attention, because transaction multiples already contain a control premium and trading multiples price minority stakes. Setting the two side by side unadjusted makes the chart misleading. The chart is used in board presentations, in fairness opinions and in preparing negotiations, because it condenses complex analyses into a single picture. Choosing which methods to display is a decision in its own right, because a chart with six bars suggests completeness even though several rest on the same assumptions and therefore provide no independent confirmation. Presenting only genuinely independent methods side by side and naming the underlying range of assumptions for each is therefore advisable. It also helps in negotiation to plot the counterparty's proposed price on the same chart.