Rory Worth $422MM

[mcanadiens]

17 minutes ago, No Mulligans said:

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 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 assets.

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

Goodwill debit 322

Equity Accounts old balances debit 100

Contributed Capital credit 422

 

So the references to "balance sheet" in the linked story, doesn't mean they actually put something like this on a financial statement. Correct?

 

[No Mulligans]

6 minutes ago, mcanadiens said:

So the references to "balance sheet" in the linked story, doesn't mean they actually put something like this on a financial statement. Correct?

 

Yes, that is my assumption.  Don't know how that could be booked without a triggering event.  Reading back, I see the intangibles should be $422, I originally misread that as the total value that would include net tangible assets.  So purchase price say, $422 and no tangible net assets (what?!)

Intangibles debit 422

Capital credit 422

[mcanadiens]

4 minutes ago, No Mulligans said:

Yes, that is my assumption.  Don't know how that could be booked without a triggering event.  Reading back, I see the intangibles should be $422, I originally misread that as the total value that would include net tangible assets.  So purchase price say, $422 and no tangible net assets (what?!)

Intangibles debit 422

Capital credit 422

Yeah. I suppose. 

I guess that's one of the risks when sportswriters try to write anything financially related. Mass confusion (or boredom) is sure to ensue.

[GolfLug]

I believe it is Rory Inc. IPO (at some point). I see so real reason for a valuation otherwise.  

[newtogolf]

1 hour ago, GolfLug said:

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.

Right and given much of the valuation comes from goodwill that would be considered worthless to anyone else besides Rory I doubt anyone would pay close to that valuation to acquire the Rory empire.

[Golfingdad]

7 hours 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).

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.  

As others have already mentioned, you have to factor in the type of person that has the drive to even get to that level in the first place.  They aren't like us.

In a similar, but different ;), vein; at my office we build houses for really, really, rich people and occasionally have one of them complaining over a fee we're charging.  My first thought is always something like "you are building a 10 million dollar house - what the heck do you care about $400?!?!"  And then I'm reminded that it's entirely possible, even likely, that that thrifty, penny pinching, attitude is likely part of the reason he's able to build such a nice house.  That's who he is and perhaps that's even how he got rich.

Same with Rory and the rest.  That's who they are.  You don't get to that level by accident and it's doubtful that you get to that level just for the money either.

[GolfLug]

5 hours ago, newtogolf said:

Right and given much of the valuation comes from goodwill that would be considered worthless to anyone else besides Rory I doubt anyone would pay close to that valuation to acquire the Rory empire.

That's an interesting paradox, wouldn't you say? Still think an IPO could be in works. Then it would be worth the valuation.

[pganapathy]

A simple case in point is Tiger.  To date he has rebuilt his swing three or four times.  By the time he got around to even his first rebuild, he was already wealthy enough to not really bother to do it.  He could have continued with his existing swing and played around whatever flaws he saw in it that made he rebuild it.  That would have been less work and possibly more profitable.  There is always a down time when you are rebuilding and during that period not winning.  Of course, if that is entirely in your off-season, it is possible to not affect your tournaments.  However, this is a guy who was worth what, a billion dollars at one point, and is still one of the hardest working athletes of all time.  Granted he seems to be slowing down these days, but that is more to do with his body breaking down than anything else.

So I would always say that money does not affect whether it is easier or harder to wake up at 5 am to practice.  That motivation has to come from within.  The money just makes life easier  (better house, bed, car etc.) and therefore they can practice more.  Have a complete home gym, a personal trainer who comes at the time of your choice, stay in an expensive and pro level golfing estate where you can roll out of bed into the practice area, where money pays for servants to help look after your family and other affairs etc.  You fly first class or in a personal jet to and from tournaments which is quicker and more comfortable than cattle class or driving yourself in a camper for example.

[newtogolf]

8 hours ago, GolfLug said:

That's an interesting paradox, wouldn't you say? Still think an IPO could be in works. Then it would be worth the valuation.

The value comes from Rory being Rory.  There's no value in an IPO (at least in the US), why would anyone invest in Rory as his entire valuation is based on him being a highly successful professional golfer.

I don't see an IPO but I do see an insurance policy like Anthony Kim had to protect Rory should he be injured or unable to perform to the levels he has.

[GolfLug]

2 minutes ago, newtogolf said:

The value comes from Rory being Rory.  There's no value in an IPO (at least in the US), why would anyone invest in Rory as his entire valuation is based on him being a highly successful professional golfer.

I don't see an IPO but I do see an insurance policy like Anthony Kim had to protect Rory should he be injured or unable to perform to the levels he has.

Rory clothing, clubs could be in the works eventually. The name is already out and up there, even if there is no more great golf. Time will tell. May be not immediately but in life 10 years from now.

What would be the purpose of Rory Inc. otherwise? Don't need that for insurance.

But, I guess I would have to agree for the short term insurance is more of a not-so-far-fetched possibility as an IPO.

[newtogolf]

9 minutes ago, GolfLug said:

Rory clothing, clubs could be in the works eventually. The name is already out and up there, even if there is no more great golf. Time will tell. May be not immediately but in life 10 years from now.

What would be the purpose of Rory Inc. otherwise? Don't need that for insurance.

But, I guess I would have to agree for the short term insurance is more of a not-so-far-fetched possibility as an IPO.

Rory clothing and clubs would be part of his contract with Nike, you can buy Nike stock today if you want to invest in Rory.

Biggest reason for Rory Inc. is to isolate and protect his personal assets from his business ventures.

[GolfLug]

10 minutes ago, newtogolf said:

Rory clothing and clubs would be part of his contract with Nike, you can buy Nike stock today if you want to invest in Rory.

Biggest reason for Rory Inc. is to isolate and protect his personal assets from his business ventures.

Sorry, do not want to belabor this too much but I understand why ANYONE incorporates (I have a small business S-corp), but very few declare intangible valuation publicly. No need.. not for insurance.

The question is why put out an article declaring the valuation publicly? Either it's just to brag or that there's a business angle , maybe for crowd funding (if not clubs, clothes.... something else, cologne, Roryland, real estate, whatever,...). That's all I am saying. Just speculation for fun's sake.  

[RussUK]

55 minutes ago, GolfLug said:

Rory clothing, clubs could be in the works eventually. The name is already out and up there, even if there is no more great golf. Time will tell. May be not immediately but in life 10 years from now.

What would be the purpose of Rory Inc. otherwise? Don't need that for insurance.

But, I guess I would have to agree for the short term insurance is more of a not-so-far-fetched possibility as an IPO.

He already has the EA sports deal so his own clothing line is a logical step..... just not too much tartan like Ian Poulters IJP line 

[Marty2019]

On 12/1/2015 at 11:59 AM, saevel25 said:

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 :) 

No, that's not what it's saying.   It's saying that if you had to buy Rory McIlroy, Inc, on the open market, then Rory McIlroy, Inc would ask for 442 million.  What you would be buying would be intangible assets and future earnings.   In no way is his net worth $442 million.  

If you google Rory McIlroy net worth, you get estimates around $65 million, which seems a lot more reasonable based on his age, his previous tour earnings, and endorsement money that he has been paid.