Valuing sports franchises: intangible asset experts will dominate

“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:

1. Customer related intangibles, such as season ticket holders, personal seat licenses, corporate boxes, and customer lists.
2. Technology based intangibles, such as internally developed software, scoreboard graphics, fan websites.
3. Marketing related intangibles, such as trademarks, trade names, internet domain names, non-compete agreements, and logos.
4. Contract based intangibles such as merchandise and logo license agreements, sponsorship agreements and arena/stadium rights.
5. 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.