All-Star Varsity Brands For Sale?

[King]

Lmao, Varsity did not do 1 billion in revenues last year...Where do you come up with figures like that?

Answer: Varsity is a Privately Held Corporation therefore the following is provided by a company responsible for "estimating" private corporate values.

Thank you for holding my “feet to the fire” for accurate information it was a great question, seriously this was a good challenge! I knew the number but didn’t have a primary source for confirmation, now you & I both have the data.

http://start.cortera.com/company/research/k3r8lwm4m/varsity-brands-inc/
Cortera Company Profile For:
VARSITY BRANDS INC
6745 LENOX CENTER CT
MEMPHIS, TN 38115-4300 | view map
(901) 387-4370
Buy Detailed Profile $5.00 | view a sample www.leonardgreen.com
COMPANY DETAILS
Location Type: Branch
Industry: Investors, N.E.C.
Ownership: Private
Year Founded: 1989
Sales Range: Over $1,000,000,000
Employees: 1,000 to 2,000
Now that you have seen an independent source of data, any thoughts on the topic of VBI as the 800-pound gorilla in the Cheer World?

Images of Dr. Evil saying 'One BILLION dollars' entered my head.

Net is different than gross. For my day job selling a billion dollars would make Varsity my third smallest customer.

If they netted one billion dollars that would be something different.

 

[Rusty]

Ummm, depends on your outlook on things and projections. I am making up numbers, but, let us say that Varsity makes about 40% of the dollar volume in the cheer industry. If the cheer industry makes $100 Million a year ( I think that is quite low, but round numbers are easier to discuss) then Varsity makes about $40 million a year (gross). If the industry, through relinquishing control by Varsity, is expected to grow to $400 million than Varsity would only have to control 10%+ to make more than this year. But if to get the growth up to $400 million Varsity had to control less than 10%, even if it was amazing for cheer, that would be hard to sell to business men. An extremely rich benefactor who doesn't care about the bottom line would be amazing at this moment.

Here is a quote from an article regarding "market share" owned by VBI.

http://www.sports-destinations.com/ID-114-articledetails.aspx
In 2006 Varsity Brands exceeded sales of $156 million and controlled more than 60 percent of the industry.

 

[ufomom]

Those company profiles sites are hopelessly inaccurate much of the time.

 

[King]

Here is a quote from an article regarding "market share" owned by VBI.

http://www.sports-destinations.com/ID-114-articledetails.aspx
In 2006 Varsity Brands exceeded sales of $156 million and controlled more than 60 percent of the industry.

I would agree that with the sales. And if you include all parts of the industry (allstar, high school, and college) I would also agree with that, but I wouldn't look into the words 'control' too much. Does 'Coke' control the soda industry? If Coke tried to quadruple their prices of Cheer Coke Zero (the greatest drink on Earth) I personally would switch to Pepsi Zero or Max or whatever (I am from Atlanta so that is a big step... but I am not paying 4 times the price for soda). It isn't a monopoly. Do they have vested interests in a lot of places? Well duh. Would it benefit them that STUNT, say, succeeds over NCATA? Yes. But STUNT cannot succeed by only their desires. They have to meet requirements and 'beat' the NCATA. That type of competition keeps everyone in a semi check. The internet and spreading of ideas insures it is very hard for people to have a monopoly nowadays.

Honestly I take the sale as the money returned from this moment on will have to be earned a lot harder. More competition in competitions, uniforms, camps, music, everything. They got in, made a decent profit, got out. Maybe I have just dealt with a lot more investment firms, but this is what they do. They don't invest for the long haul, they invest to increase profitability and make money, and sell off. I don't understand what is sinister about that.

 

[King]

Let's not beat around the bush. You (and pretty much everyone who works at a gym) is concerned that selling off the company would lead to someone else buying it who has LESS than altruistic motivations with their new toy. Their bottom line will be to to destroy cheerleading as long as it makes a profit! The issue is that whether Varsity, Jamfest, this guy named John, my cleaning lady Raquel (she comes once a month but MAN is it helpful), or my dog Jack try to run cheerleading specifically their own way that is not beneficial to all of us at some point all the customers will move on. It isn't a monopoly, there are options. And if there isn't a competitive option today for what they do, there will be when their are disgruntled customers. I still get about 5 requests a month to do websites because people have been unhappy with the options out there provided, and I have to turn them down because I don't have time. If I wanted to I could turn myself into a full time Cheerleading Website person. But I don't, so there is an opportunity for someone else. That is the nature of business. And in todays instant communication age if your company isn't on the up and up and someone of equal value is, your customer will leave you and go to them.

 

[RockstarCheer]

Images of Dr. Evil saying 'One BILLION dollars' entered my head.

Net is different than gross. For my day job selling a billion dollars would make Varsity my third smallest customer.

If they netted one billion dollars that would be something different.

That sales range is not for 1 year as you quoted. When you purchase a company you are buying what the company could do in 3-4 years. So that number is based on 3-4 years of sales not one year. If I'm wrong please show me where I'm wrong and where it says 1,000,000,000 of sales a year

 

[King]

That sales range is not for 1 year as you quoted. When you purchase a company you are buying what the company could do in 3-4 years. So that number is based on 3-4 years of sales not one year. If I'm wrong please show me where I'm wrong and where it says 1,000,000,000 of sales a year

I am pretty sure that is gross, not net. If Varsity is worth around 360,000,000 that means they probably net around 90,000,000 to 120,000,000 a year. Not bad at all, but this is all guesstimation. I am failing to see what the big deal about this all is. If there is 100,000 allstar cheerleaders, 400,000 high school, and 10,000 college cheerleaders (550,000) and they spend 1,000 a year on average between all of them on cheer that is 550,000,000. There is a lot of money in cheerleading.

 

[newcheerdad]

Look, all of this is rampant speculation, because as the actual article clearly stated, it is only a RUMOR that Varsity is even being shopped. And if it is, you'd have to think about who would want to buy it? Unless you have a sense as to who would even want Varsity, all of this is pretty much tilting at windmills.

And as Kingston said, if Varsity were to go away, there are companies out there (JamBrands, Cheersport, Spirit Innovations, etc.) that are big enough to potentially fill the void and then some.

 

[ACEDAD]

I am pretty sure that is gross, not net. If Varsity is worth around 360,000,000 that means they probably net around 90,000,000 to 120,000,000 a year. Not bad at all, but this is all guesstimation. I am failing to see what the big deal about this all is. If there is 100,000 allstar cheerleaders, 400,000 high school, and 10,000 college cheerleaders (550,000) and they spend 1,000 a year on average between all of them on cheer that is 550,000,000. There is a lot of money in cheerleading.

The original post link said that Varsity netted $45 million. If that's the net on sales over $1 billion, then its a pretty easy answer as to why they are selling. They aren't getting their money's worth.

 

[newcheerdad]

The original post link said that Varsity netted $45 million. If that's the net on sales over $1 billion, then its a pretty easy answer as to why they are selling. They aren't getting their money's worth.

That's $45 million EBDITA. That doesn't take into account interest payments, taxes, or depreciation/amortization costs on assets. That suggests to me the actual net is even lower than that, and if the company's actually grossing $1 billion per year that's an embarrassing ROI.

 

[King]

The original post link said that Varsity netted $45 million. If that's the net on sales over $1 billion, then its a pretty easy answer as to why they are selling. They aren't getting their money's worth.

That's $45 million EBDITA. That doesn't take into account interest payments, taxes, or depreciation/amortization costs on assets. That suggests to me the actual net is even lower than that, and if the company's actually grossing $1 billion per year that's an embarrassing ROI.

It is just not a high yield business. I wouldn't say its embarrassing. One segment of our customers makes their millions on penny margins. You gotta sell a lot to make those pennies worth something.

 

[newcheerdad]

It is just not a high yield business. I wouldn't say its embarrassing. One segment of our customers makes their millions on penny margins. You gotta sell a lot to make those pennies worth something.

At its core, Varsity puts on events, runs camps and sells clothing. Having worked in two of those three industries, I can say with a fair degree of certainty that those are not traditionally low-margin businesses.

 

[Rusty]

That sales range is not for 1 year as you quoted. When you purchase a company you are buying what the company could do in 3-4 years. So that number is based on 3-4 years of sales not one year. If I'm wrong please show me where I'm wrong and where it says 1,000,000,000 of sales a year

http://start.cortera.com/company/research/k3r8lwm4m/varsity-brands-inc/

Cortera Company Profile For:
VARSITY BRANDS INC
6745 LENOX CENTER CT
MEMPHIS, TN 38115-4300 | view map
(901) 387-4370
Buy Detailed Profile $5.00 | view a sample www.leonardgreen.com
COMPANY DETAILS
Location Type: Branch
Industry: Investors, N.E.C.
Ownership: Private
Year Founded: 1989
Sales Range: Over $1,000,000,000
Employees: 1,000 to 2,000

 

[newcheerdad]

http://start.cortera.com/company/research/k3r8lwm4m/varsity-brands-inc/

Cortera Company Profile For:
VARSITY BRANDS INC
6745 LENOX CENTER CT
MEMPHIS, TN 38115-4300 | view map
(901) 387-4370
Buy Detailed Profile $5.00 | view a sample www.leonardgreen.com
COMPANY DETAILS
Location Type: Branch
Industry: Investors, N.E.C.
Ownership: Private
Year Founded: 1989
Sales Range: Over $1,000,000,000
Employees: 1,000 to 2,000

I'd like to see the D&B or Hoovers report. I trust them a whole heck of a lot more than Cortera.

 

[MissBee]

would rhinestones be legal?

Depends on where you want to put them.....