What’s George Clooney worth?
October 17, 2023
It is very nearly the second anniversary of our first ever valuation project. Over the past two years we have produced nearly 100 valuation reports.
We’ve valued all sorts of businesses, from single location retailers to advanced generative AI companies. We’ve ensured that clients only incur the correct tax liabilities. We’ve tripled the work we can take on by streamlining our processes, which has meant we have only had to double the size of our team. We remain “valuation geeks”, always on the on the lookout for changing trends and novel approaches to valuations so that they become ever more accurate.
There are always new opportunities emerging from innovation in corporate legal structures that satisfy our inner geekiness.
Have you noticed recently that there have been a number of “airtime for equity” deals in the private company investment market?
These deals are curious from a valuation perspective.
First and foremost is how such a deal is legally structured. There’s a lot of intangible value in airtime deals, but where does that value turn up? Is it in the investment agreement or in a separate contract for the airtime provision?
I have been aware of these types of arrangements for a long time. Channel 4 used them a lot; one former client gave the spare airtime it did not need to interesting start ups it wanted to befriend.
Although this type of transaction is slightly different, we still follow our evidenced based valuation process. We gather the evidence, run the numbers and then produce the supporting arguments.
We do this because it works; our clients understand what we are doing and the approach stands up to challenge.
In an airtime for equity deal we would work especially hard on the intangible value of the airtime. Will it be used for a cartoon or will the SME hire George Clooney to star in the ad? The latter scenario could make the airtime much more valuable than the former. The time of day when the airtime is available would be something to consider and what the viewing figures might be. Could there be a revenue share model hidden in the transaction terms? Needless to say, we would work very closely with the two parties involved in the deal to fully understand all the factors on which to base the valuation.
If you have any valuation needs on your desk at the moment, even if it is not an “airtime for equity” deal, do get in touch. We would love to help your client by providing an easy to understand and, most importantly, accurate report – all delivered efficiently and fast, of course.
