Value and Due Diligence Considerations for Sports, Music and Filmed Assets (Video)
Despite the current economy, the interest in and demand for acquiring sports teams and music/entertainment assets is showing very few signs of a slowdown. In one of the most popular breakout sessions at MFM's Annual Conference, Brian Marler, Conrad Kolassa and Eva Lee of Houlihan Lokey addressed what seems to be an ongoing chase for companies and wealthy individuals to own a professional sports team or a musical artist's entire catalog. The three talked further with Joe Hanratty in this Office Hours interview.
Marler, a director in Houlihan Lokey's Technology Group, noted that while it may seem sports franchises are changing hands daily, "in the last 10 years, there have been maybe six deals between each of the [major] leagues." But the Washington Commanders just notched a record-setting $6 billion price tag, if the sale to Josh Harris comes through. Even buying a Major League Soccer (MLS) expansion team is steep, with a $500 million price tag attached to the newest MLS team, just awarded to San Diego.
Kolassa, vice president in the Technology Group, discussed the similarities and differences between sports teams and music assets. After the industry was decimated with the rise in online music piracy, he pointed to music streaming as its savior. "Music streaming has become like a utility," he says. "It's worth $10 a month for people to have access to millions and millions of songs on demand." He also addressed moderator Hanratty's question around why artists would sell their entire catalog of music, saying tax law changes and streaming's popularity have caused some of them to decide to monetize their assets now.
Lee, a senior vice president in Houlihan Lokey's Transaction Advisory Services practice, rounded out the discussion with an overview of due diligence and why examining every facet of a business and its leadership is critical to arriving at an accurate valuation.
Watch the entire interview in the video at top.
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