Rory Worth $422MM

[boogielicious]

From:

http://www.geoffshackelford.com/homepage/2015/11/30/rory-mcilroy-inc-valued-at-422-million-by-rory-mcilroy-inc.html

If I had that kind of money, I would quit my job and play golf all the time! Rory should too. 

Quote

Rory McIlroy Inc Valued At $422 Million By Rory McIlroy Inc

The Irish Examiner's Gordon Deegan says Rory McIlroy Management Services has valued their man Rory McIlroy Inc, four-time major winner best known of late for his football exploits, at $422 million. 

Deegan notes:

The new McIlroy company, headed bymanaging director Donal Casey, manages all the royalty payments from the golf star’s various endorsements for Nike sportswear, Omega watches, Bose, Upper Deck and computer games.

The value of the McIlroy brand — that persuaded the likes of Nike to enter a reported $250m 10 year deal with the 26-year-old — is underlined by the Dublin firm placing a $422.13m (€399.55m) book value on the firm’s intangible assets connected to the golfer’s brand

 

 

[inthehole]

Don't care what anyone says, when you're sitting on that big a pile of dough ... it's gotta be tougher to get up at 5 Am and go to the range on your off days (like all the hungry guys do who are trying to make it).

Its exactly the same as with race car drivers ... once they make it big (Jeff Gordon is a perfect example) ... he won everything in sight in his mid-20's and once he got rich, married a supermodel (albeit the 2nd time was better than the first for him), had kids, ... he lost the edge and wouldn't push it as hard as the guys that were hungry to make it.  

[Slice of Life]

6 minutes ago, inthehole said:

Don't care what anyone says, when you're sitting on that big a pile of dough ... it's gotta be tougher to get up at 5 Am and go to the range on your off days (like all the hungry guys who are trying to make it).

Its exactly the same as with race car drivers ... once they make it big (Jeff Gordon is a perfect example) ... he won everything in sight in his mid-20's and once he got rich, married a supermodel (albeit the 2nd time was better than the first for him), had kids, ... he lost the edge and wouldn't push it as hard as the guys that were hungry to make it.  

I guess it depends on the person. 

 

To get to that level, you have to love the game, and HATE losing. The competitive drive alone would be enough for me to wake up at 5 and hit the range. I probably hate losing more than I love winning or money lol

[saevel25]

11 minutes ago, inthehole said:

Don't care what anyone says, when you're sitting on that big a pile of dough ... it's gotta be tougher to get up at 5 Am and go to the range on your off days (like all the hungry guys who are trying to make it)

If you are the type of person who is in it for the money. If that was the case with all athletes than Michael Jordan would have not been as devoted to being the best because he was the icon of the NBA and had that Nike Shoe deal. 
 

12 minutes ago, inthehole said:

he won everything in sight in his mid-20's and once he got rich, married a supermodel (albeit the 2nd time was better than the first for him), had kids, ... he lost the edge and wouldn't push it as hard as the guys that were hungry to make it.  

I think having kids puts a few things in perspective. Families have a tendency to slow down athletes. It's hard to put the effort into being that great and trying to make time for the family. 

[Jeremie Boop]

13 minutes ago, inthehole said:

Don't care what anyone says, when you're sitting on that big a pile of dough ... it's gotta be tougher to get up at 5 Am and go to the range on your off days (like all the hungry guys who are trying to make it).

Its exactly the same as with race car drivers ... once they make it big (Jeff Gordon is a perfect example) ... he won everything in sight in his mid-20's and once he got rich, married a supermodel (albeit the 2nd time was better than the first for him), had kids, ... he lost the edge and wouldn't push it as hard as the guys that were hungry to make it.  

I think the race car driver example is a bit different. I think Gordon didn't lose the will to win as much as he was less likely to take the risks and be as aggressive on the track risking injury/death once he had a family. 

 

6 minutes ago, Slice of Life said:

I guess it depends on the person. 

 

To get to that level, you have to love the game, and HATE losing. The competitive drive alone would be enough for me to wake up at 5 and hit the range. I probably hate losing more than I love winning or money lol

I think this is a very valid point, people who want to be the best don't stop wanting to be the best because they are rich. 

[David in FL]

"The value of the McIlroy brand — that persuaded the likes of Nike to enter a reported $250m 10 year deal with the 26-year-old — is underlined by the Dublin firm placing a $422.13m (€399.55m) book value on the firm’s intangible assets connected to the golfer’s brand"

Note that his brand is currently valued at that.  It doesn't mean that he actually has that much money, nor that that value could drop enormously should something (think Anthony Kim) happen....

 

[jbishop15]

35 minutes ago, inthehole said:

Don't care what anyone says, when you're sitting on that big a pile of dough ... it's gotta be tougher to get up at 5 Am and go to the range on your off days (like all the hungry guys do who are trying to make it).

Maybe, but there's also an argument to be made that it frees you from that pressure, and you can just go play golf. Or, if not free you, at least apply that pressure in such a way that it doesn't destroy you. 

Herbert Warren Wind described Jerry Travers, (a rich amateur who won a lot of big tournaments in the early 1900s) by saying, "Like most rich men's sons who have played a sport well, he could afford to play the game as if his next meal depended on winning." 

[boogielicious]

58 minutes ago, David in FL said:

"The value of the McIlroy brand — that persuaded the likes of Nike to enter a reported $250m 10 year deal with the 26-year-old — is underlined by the Dublin firm placing a $422.13m (€399.55m) book value on the firm’s intangible assets connected to the golfer’s brand"

Note that his brand is currently valued at that.  It doesn't mean that he actually has that much money, nor that that value could drop enormously should something (think Anthony Kim) happen....

 

Good point, but Tiger still makes boatloads of cash even with the struggles he's had with injury. Rory is not at that comfortable level yet, but three of four more years with success will get him there.

[saevel25]

3 minutes ago, boogielicious said:

Good point, but Tiger still makes boatloads of cash even with the struggles he's had with injury. Rory is not at that comfortable level yet, but three of four more years with success will get him there.

Umm, the guy is worth 442 Million. I don't think Rory is splurging it all away. He seems like a sensible guy. 

Heck if he invests it at 5% per year, he makes 22 million a year on interest. Which 3% goes to inflation he has 450K per year of spending. I think he's comfortable :) 

[Shindig]

1 hour ago, David in FL said:

"The value of the McIlroy brand — that persuaded the likes of Nike to enter a reported $250m 10 year deal with the 26-year-old — is underlined by the Dublin firm placing a $422.13m (€399.55m) book value on the firm’s intangible assets connected to the golfer’s brand"

Note that his brand is currently valued at that.  It doesn't mean that he actually has that much money, nor that that value could drop enormously should something (think Anthony Kim) happen....

 

Thank you for noticing that detail and pointing it out.  I was wondering how he'd amassed so much in that time, since Tiger took so much longer -- and I feel had a wider appeal.

[mcanadiens]

If we've got a really smart guy out there, maybe they can explain Irish practices for booking intangible assets and how they managed to come up with this particular number. Presumably we aren't talking about an asset that would be amortized for taxation purposes the way certain things are here in the U.S. 

It just sort of seems weird to me.

[Shindig]

1 hour ago, mcanadiens said:

If we've got a really smart guy out there, maybe they can explain Irish practices for booking intangible assets and how they managed to come up with this particular number. Presumably we aren't talking about an asset that would be amortized for taxation purposes the way certain things are here in the U.S. 

It just sort of seems weird to me.

I think the closest analogy I can give is when you hear that the Canadiens are worth $1B.  It isn't that they have that many assets, or cash flow, but that a combination of branding and expected future earnings (as you describe) fit in.

With Rory, a large part of it has to be the value he brings to a brand -- does Nike (or whoever) get more sales because of Rory's influence?  Some of that is the value of his brand, and of course some of that is money he sees in endorsement dollars. 

I realize comparing an individual to a franchise isn't a perfect fit, but I hope this makes some sense at least.

[mcanadiens]

29 minutes ago, Shindig said:

I think the closest analogy I can give is when you hear that the Canadiens are worth $1B.  It isn't that they have that many assets, or cash flow, but that a combination of branding and expected future earnings (as you describe) fit in.

With Rory, a large part of it has to be the value he brings to a brand -- does Nike (or whoever) get more sales because of Rory's influence?  Some of that is the value of his brand, and of course some of that is money he sees in endorsement dollars. 

I realize comparing an individual to a franchise isn't a perfect fit, but I hope this makes some sense at least.

I understand the concept of Goodwill. My question is how did the intangible get generated

In your example, the Habs have been sold to various owners, most recently to back to Molson. Molson's purchase price probably was for more than could be allocated to specific assets (like cash accounts, receivables, fixed assets). The excess is booked to Goodwill. See, it was the sale's proceeds that gave rise to the asset.

In Rory's case, how did the intangible actually arise?  This, apparently, was a corporation he set up himself to handle his various business activities. If this number is supposed to represent revenue to be generated in the future (supposing all goes well), it seems like improper revenue recognition.

[newtogolf]

8 minutes ago, mcanadiens said:

I understand the concept of Goodwill. My question is how did the intangible get generated

In your example, the Habs have been sold to various owners, most recently to back to Molson. Molson's purchase price probably was for more than could be allocated to specific assets (like cash accounts, receivables, fixed assets). The excess is booked to Goodwill. See, it was the sale's proceeds that gave rise to the asset.

In Rory's case, how did the intangible actually arise?  This, apparently, was a corporation he set up himself to handle his various business activities. If this number is supposed to represent revenue to be generated in the future (supposing all goes well), it seems like improper revenue recognition.

The following are some examples of what can be categorized as goodwill.

• Reputation
• Brand or trade name recognition
• Websites, Domain names
• Trade Secrets, recipes
• Customer list, Exclusive supplier list
• Copyrights, Trademarks, Patents
• Licenses, permits, regulatory approvals
• Contracts
• Accreditations
• Developed Processes
• Proprietary Designs, Proprietary Know-How
• Customized or Proprietary Databases
• Published Articles or Industry Press

I'd guess goodwill factors into both Rory Mcilroy Inc (he's likely incorporated himself) and his business ventures. Rory's goodwill is mostly made up of reputation, branding and contracts.  His businesses would also reflect his reputation and brand along with the other items.

If his golf performance declines I'd expect his overall value would also decline given much of his goodwill comes from his golf as he's not yet achieved the celebrity status Tiger Woods has.

[mcanadiens]

16 minutes ago, newtogolf said:

The following are some examples of what can be categorized as goodwill.

• Reputation
• Brand or trade name recognition
• Websites, Domain names
• Trade Secrets, recipes
• Customer list, Exclusive supplier list
• Copyrights, Trademarks, Patents
• Licenses, permits, regulatory approvals
• Contracts
• Accreditations
• Developed Processes
• Proprietary Designs, Proprietary Know-How
• Customized or Proprietary Databases
• Published Articles or Industry Press

I'd guess goodwill factors into both Rory Mcilroy Inc (he's likely incorporated himself) and his business ventures. Rory's goodwill is mostly made up of reputation, branding and contracts.  His businesses would also reflect his reputation and brand along with the other items.

If his golf performance declines I'd expect his overall value would also decline given much of his goodwill comes from his golf as he's not yet achieved the celebrity status Tiger Woods has.

All right. Yes all those things are intangibles. Let me try asking my question this way.

If the debit (increase to intangible assets) is 422 millon, what is the credit? 

[No Mulligans]

43 minutes ago, mcanadiens said:

All right. Yes all those things are intangibles. Let me try asking my question this way.

If the debit (increase to intangible assets) is 422 millon, what is the credit? 

I don't think they were referring to actual intangible assets that were booked, rather, if a valuation was done what would be the value.  I believe the method of valuation in this case would be computed by taking the present value of future estimated cash flows after applying a discount rate; plus the value of tangible net assets.

The intangibles for book purposes would only be triggered if the company was sold and would be a result of the amount the purchase price exceeds the value of the tangible net assets.

The entry, assuming for illustration purposes that the fair value of net tangible assets = book value = 100 million.  Purchase price = 422 million

Intangible accounts (tradename, trademarks, goodwill etc.) debit 322

Equity Accounts old balances debit 100

Contributed Capital credit 422

 

[MrDC]

When you have that much money it's not tougher to get up at 5am on your off day to work at the range, it's easier.

Also I doubt a person that rich gets up at 5am if they don't want to, they get up whenever they like, they have nothing to do but work on their game if they want, there's no afternoon job they have to get to, there's nothing, just golf, and that's one of the reasons why getting up at 5am is easier.

The only thing that makes a very rich person start to lose their edge in their profession is interest and motivation, when you have that much money it becomes very easy to get into other things, like women and rare watches and real estate and fine wine and on and on, it's easy to lose focus.

 

Edited December 1, 2015 by MrDC

[GolfLug]

1 hour ago, mcanadiens said:

I understand the concept of Goodwill. My question is how did the intangible get generated

In your example, the Habs have been sold to various owners, most recently to back to Molson. Molson's purchase price probably was for more than could be allocated to specific assets (like cash accounts, receivables, fixed assets). The excess is booked to Goodwill. See, it was the sale's proceeds that gave rise to the asset.

In Rory's case, how did the intangible actually arise?  This, apparently, was a corporation he set up himself to handle his various business activities. If this number is supposed to represent revenue to be generated in the future (supposing all goes well), it seems like improper revenue recognition.

It's TODAY's valuation. If someone were to hedge the future revenue TODAY, that's what they would pay TODAY. Not much different from buying a stock.