hypothetical ROH net worth

[Brada]

Let's say I won the 400 million dollar powerball.........and let's say I wanted to buy ROH, with the intent of running it exactly under the same format it is now..

Let's say that Sinclair was willing to sell....what would you guess the asking price be? What do you think it would cost per year to run the same number of shows, in the current venues, negotiating with the same talent, etc.....

[cgstong]

So there are several factors to consider for this:

• Library
  TV Deals
  Talent
  Brand

The ROH library is always going to be its biggest asset. With the amount of names in there that are currently in the WWE, I would say it's definitely worth a bit. I couldn't say exactly how much but given that the average amount the WWE pays for footage is semi sizable. I can't recall off the top of my head what it is they pay, once I remember I'll calculate it.

The TV deals are currently thru their corporate owners along with I believe an Italian deal, but I think that also fell through recently. So the TV time really isn't theirs persay, but I'm sure it would fit into the model.

Talent is what it is. ROH has some of the best indie talent out there, but that doesn't always mean they are irreplaceable from an investor's POV. The brand is also well established but that only means so much. They have a rounded figure of about 1M viewers every week not including online but even that would be minute.

Overall I'd say personally having followed ROH since they began, I'd think it would be roughly $5M but even that I feel is kinda high. This is an completely uneducated guess as I have no actual figures to base that on until I calculate the footage rate.

[Brada]

So I wonder, would a deal like that include all equipment, ring, staging, lighting, etc??

[Brada]

I would also be interested in knowing if the operating costs would be similar to purchase price....so meaning in this hypothetical fantasy land....total cost for you to step right in and be the owner and person calling the shots, leaving all office staff, road help, etc....all staying the same as is..

I bet there are so many more headaches that I wouldn't even think of....booking buildings, permits, things like that.

It is definitely a business that fascinates me from an operational standpoint as well.

[cgstong]

Booking buildings, permits, and those are tasks but are not necessarily included in the price as you're theoretically hiring the person who would take care of all of that.

The equipment would def be in the cost of everything which would also mean calculating depreciation so it wouldn't be that much.

[Brada]

maybe the operating cost wouldn't be near as much as I think it would. Regardless, you win a powerball, you are definitely in the income ratio to buy ROH, should it be for sale...lol.

[cgstong]

Operating/overhead costs are basically the staff for a wrestling promotion. They usually would rent teams to help them with equipment or have a dedicated ring crew and truck (something I think ROH has but not the norm for indie wrestling).

[Brada]

I'm thinking far less than $5 million, but I'm with you cgstong, I have nothing to go on with that guess, just a hunch. The library is by far of the most value.

[cgstong]

I'm only going with $5M just because SBG would probably want some profit and the footage has to be at least worth $2M if TNA's footage which was estimated by Meltzer and Alvarez to be worth to WWE almost $1M (I think 700K but I'll round up for the sake of ease). Especially since it has more footage of their current talent. Obviously over time this diminishes.

The rest of the $3M comes from possibly selling of TV deals (if SBG still wants them which I assume they would) and outside deals they have going on. Also include around $1M of that going to payroll. If not more based on some figures for some of the wrestlers.

[Brada]

oh gotcha. Ok. I was putting that payroll $$ in my thoughts of operating costs....Tomato, to-mato....

[Memphis Mark]

Sinclair would want to be paid for loss of future ROH earnings. There is no reason for them to unload ROH at fire sale prices. I would think that the price would be north of $ 5 million.

[Mr. Mojo Risin]

This question is perfect for Memphis Mark to answer.

[Brada]

Sinclair would want to be paid for loss of future ROH earnings. There is no reason for them to unload ROH at fire sale prices. I would think that the price would be north of $ 5 million.

Oh no doubt Memphis Mark....for sure.

My hypothetical was more geared towards me winning the lottery and ROH magically coming up for sale, me buying it, then having thousands wanting to kill me because im the idiot that ran the business in the ground.

Then again, if I won the powerball, I guess I could "Dixie" the hell out of it, and still last quite a while...

[Vanilla Gorilla]

do it, dude. Buy it

[Vanilla Gorilla]

I mean, obviously, win the powerball first - but then, totally do it.

[cgstong]

Sinclair would want to be paid for loss of future ROH earnings. There is no reason for them to unload ROH at fire sale prices. I would think that the price would be north of $ 5 million.

I can't speak to how much they've lost given that Cary would be the guy who lost the most. Each show for ROH probably doesn't cost that much to produce given they aren't using any satellite time for TV which is generally one of the major costs.

[Brada]

I mean, obviously, win the powerball first - but then, totally do it.

If it was 5 mil, and I had just won 400....so taking home 200, after taxes having 110......hell yeah, I would drop 5 on ROH in a heartbeat, and be happy if I broke even...

[WHG]

Valuation of wrestling companies is interesting. A typical business would be valued at a multiplier of profit: EBITDA (Earnings Before Interest, Taxes, and Depreciation). On that basis, ROH would be worth very little as I'm sure that without any lucrative TV deals the promotion probably just barely breaks even.

The other thing that would depress ROH's sale price is the lack of competition for it. The WWE is the only likely buyer (not considering a wealthy Powerball winner) and they notoriously try to lowball based almost solely on # of library hours.

What Sinclair and now Anthem with TNA are showing is that there is a niche buyer for wrestling companies: networks that want to own their own content creation and are looking for an inexpensive way to produce a good amount of content. The market is still limited here because the ad rate return on that content is going to be low.

My guess is that in any realistic market, ROH would be valued at well under $5M, keeping in mind that Sinclair likely paid nowhere near that much for it.

[cgstong]

Valuation of wrestling companies is interesting. A typical business would be valued at a multiplier of profit: EBITDA (Earnings Before Interest, Taxes, and Depreciation). On that basis, ROH would be worth very little as I'm sure that without any lucrative TV deals the promotion probably just barely breaks even.

The other thing that would depress ROH's sale price is the lack of competition for it. The WWE is the only likely buyer (not considering a wealthy Powerball winner) and they notoriously try to lowball based almost solely on # of library hours.

What Sinclair and now Anthem with TNA are showing is that there is a niche buyer for wrestling companies: networks that want to own their own content creation and are looking for an inexpensive way to produce a good amount of content. The market is still limited here because the ad rate return on that content is going to be low.

My guess is that in any realistic market, ROH would be valued at well under $5M, keeping in mind that Sinclair likely paid nowhere near that much for it.

Agreed with everything said here. Though there are definitely negotiations that take into other affects such as brand and certain outside deals. Given SBG would want to be reimbursed for what they put in (though I doubt that's very much) I would still say $5M isn't too off the mark. I would say for example $3M is too little based on previous reported profits and that ROH reached the black way before TNA when their DVD sales were actually doing well. I understand that isn't the case now.

[Brada]

I was arguing with a co-worker this morning about buying WWE in comparison to buying UFC, should they both be for sale hypothetically.

He is not a wrestling fan at all. It was apparent when he told me he thought UFC would be worth much more than WWE.

I quickly had to show him he was wrong, being the global platform that WWE is on with the Network, extensive library collection, etc.....that it wouldn't even be close.

That makes me wonder, should Vince ever want to sell, what would the asking price for WWE be?