“Intangible assets often comprise approximately 90% of total sports franchise value,” said Drew Dorweiler (Dartmouth Partners Limited), a featured speaker at the recent NACVA/IBA conference in San Diego. Each of the five general categories of intangible expenses set forth by SFAS 141 (Appendix A) can apply to sports-related properties, including:
- Customer related intangibles, such as season ticket holders, personal seat licenses, corporate boxes, and customer lists.
- Technology based intangibles, such as internally developed software, scoreboard graphics, fan websites.
- Marketing related intangibles, such as trademarks, trade names, internet domain names, non-compete agreements, and logos.
- Contract based intangibles such as merchandise and logo license agreements, sponsorship agreements and arena/stadium rights.
- Artistic-related intangibles such as photographs and audio/video libraries.
Valuation of sports franchises comes up more often than one might expect, given the surprising number of minority owners in professional and semi-professional franchises.
To get in the game—or refine your team’s current skills, tune into the BVR webinar “Valuing Sports Franchises” led by Dorweiler on September 15, 2011.
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