Disclousure: there has been much speculation about the sale of the CrossFit® Inc brand .; it was rumored to be worth $ 4 billion, but this is not true. This data was taken from a Yahoo Finance report, which claimed that the brand moves a market of approx $ 4 billion a year, also including all the equipment and clothing companies that work with the brand.
The Yahoo Finance report was based on aForbes investigation, which cites the CrossFit® market as in great ascension, and also claims that of those $ 4 billion, CrossFit® Inc manages to get $ 100 million in annual revenue (according to Mike Ozanian's estimate in 2015.)
We would like to point out that this short article it does not aim to make a profound analysis the social and cultural aspect of the community and of all the overwhelming events that CrossFit® Inc. is going through, but we just want to do a reflection on the value of the CrossFit® brand.
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To understand this well, let's get to know the new CEO
To start you need to understand who is Eric Roza! He is a well-known face in the world of CrossFit® since he is the owner of CrossFit® Sanitas, located in Boulder, Colorado; his box has been voted several times as one of the best in the EUA.
Eric is far from being a common gym owner and has a unique company profile. He was CEO of Datalogix, the largest digital advertising data company.
In the same year, Eric led Datalogix to an estimated $ 125 million in sales (higher than CrossFit® Inc.), after bargaining with 82 of the 100 best American advertisers. This shows how good he is at what he does.
In addition, Roza really shone during negotiations with Oracle, the giant who acquired his company for $ 1,2 billion. He continued in business management until last year as Senior VP and General Manager of Oracle Data Cloud.
He has amassed a number of other companies, as a partner, investor, board member and even as an adjunct professor at the University of Colorado Boulder.
CrossFit® Inc. business
Now let's talk a little about the business of CrossFit® Inc. First of all, we specify that the company is privately owned and does not reveal any financial information, so everything we write is extremely speculative.
There are 3 classic methods of evaluating a sale:
- Market multiples: seek guidance in similar societies; in the case of CrossFit we cannot rely on it since the brand is unique in its kind and business model;
- Asset value: that's probably what Greg was aiming for, but Eric is unlikely to have accepted it. In this model, the equity of the company is evaluated but the brand is an intangible asset and, certainly, an experienced trader like Eric would never accept this solution.
This type of model works even better for companies with a history, as in the case of CrossFit® which is more than 20 years old and has a very clear Track Record. Also, unlike a Start Up that has exponential growth, CrossFit® would have had a huge drop, with the various announcements of box and athletes who have removed the affiliation, the loss of sponsorships and the decrease in consumption of everything that involves the brand.
All cash projections would have been negative. So even if we assume that CrossFit® had revenue similar to that Datalogix had at the time of its sale to Oracle, unlike this, CrossFit®'s multiple revenue would have been close to 1, and therefore, we could speculate a figure between $ 150 and $ 200 million.
If so, we would have a "Man of glass”Still very rich, but much less than he could be and with a terrible spot in his career.
We can only hope and believe that the new management of CrossFit® Inc., Led by Eric Roza, will once again be a source of pride for the entire community, helping to expand not only the business, but the entire lifestyle that surrounds it. all of us.