Why does a talent that seems to have underperformed have higher yield than other talents that seem to have performed better?
The most important thing to understand about yield calculation is that it’s always calculated in relation to the “benchmark” valuation established during the introduction. When we value the talent, we already take into account his/her performance up until now and project the growth over the next 10 years, which then becomes our “benchmark”.
This essentially means that the best indicator of the upcoming yield amount is whether the talent has overperformed or underperformed himself/herself as compared to the introduction “benchmark” valuation.
Therefore, in some cases huge stars can sometimes bring less yield per ROY than less known talents, only because those huge stars have performed worse in relation to their introduction “benchmark” compared to a smaller talent, who might have overperformed his/her own introduction “benchmark”
This essentially means that the best indicator of the upcoming yield amount is whether the talent has overperformed or underperformed himself/herself as compared to the introduction “benchmark” valuation.
Therefore, in some cases huge stars can sometimes bring less yield per ROY than less known talents, only because those huge stars have performed worse in relation to their introduction “benchmark” compared to a smaller talent, who might have overperformed his/her own introduction “benchmark”
Updated on: 23/01/2023
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