^^^For many in the cheer community, you have had long term business and personal relationships with people at Varsity. I can only speak for the past six or seven years I've been following Varsity and that's strictly from observation and limited reading material since it's privately held. What I do know is Webb loved cheerleading and if he needed something and it didn't exist, it was created to perpetuate that vision, including events, merchandise, government and scoring. <<That's the Varsity the cheer community focuses on. From my perspective in the past 6-7 years I've seen a lot of acquisitions and while people like to discuss "profit" they tend to ignore the "debt" conversation, and that became crystal clear in November 2017 when they received a B2 credit rating from Moody's because their debt ratio was so high. <<That's the Varsity I focus on. There's only one way to pay debt, so when those acquisitions happened the fees began to increase. High valuation, high debt, brings the necessity of equity groups @Scotty B mentioned how the employees pumped an additional billion into Varsity the past four years, but in reality, a large portion of that billion came from debt and its acquisition of BSN Sports in 2015. As a once corporate buyer perspective, I know the highest gross margin piece of the pie is coming from its "in stock", "fast turning" merchandise. It's not coming from the EP side where the operation portion relies on third party businesses and government owned facilities to do business. Adam Blumenfeld from BSN being the CEO, confirmed that.
I worked for equity groups my entire career, not an individual or tight knit group of investors, so the whole "it's business, not personal" is somewhat ingrained in me, for that I apologize. But, coming from a corporate perspective, it's not doom and gloom. Personally, I don't see an equity group with a retail background wanting to govern cheer, create score sheets or deal with judging drama, they want to sell merchandise. <<<The cheer community wanted that. I'm seeing the door slowly open to the IASF. Now, that may not be what people expected and wanted, but their mission says it is to move forward "on a global course". The EP catagory deals with city government, government venues, third party businesses...IMO Hades on earth. My background in operations is next to zero so I'll leave that for someone else, but I do know when dealing with third parties and government your profit erodes quickly. I, personally, believe a lot of those EP acquisitions and mergers happened out of necessity because it is so hard to profit under those circumstances (contrary to what many imply). I know when May Corp had electronics in their dept stores their gross margin for that category was around 8% (pitiful), but Best Buy came along and does it for a PM around 22%. Perspective, fast turning imports in the early 2000's had a PM around 55% at May Corp (ETA). So, they will keep the portion they do best and allow others to take on the portions they can do better.
