Asset Valuation Why It’s Worth It!

What We’re Going to Talk About… How we valued our assets previously The need for a professional valuation Overview of the process Results Benefits we’ve seen

The olden Days Loose partnership levels: $10k, $25k, or $50k Sometimes even less, like $3,500 – $5k À la carte rate card allowed for subjective haggling of assets with potential partners Combination of: 2007 valuation Industry standards Our CEOs personal opinion of what we were worth - A la carte rate card: messy contracts, with no rhyme or reason. - Industry standards didn’t account for USC, very different from, say, Nebraska

So What’s the Problem? Undervaluing our assets Impacting our bottom line Doesn’t account for intangibles Too much wiggle room in partner negotiations Same amount of staff resources, whether $5k-50k. Often lower partners were more needy/high maintenance

The Valuation Process IEG: the gold standard Six month process (typically three - six months) Assess all tangible and intangible assets Analyze everything from your alumni profile and web traffic (normal), to signage inventory and hospitality buys (huh?) Three revised drafts Cost: $28,000 4. APPLY PRICE ADJUSTERS 1. VALUE TANGIBLE BENEFITS 2. RANK INTANGIBLE ASSETS 3. FACTOR REACH, COST BENEFIT RATIO 5. BENCHMARK DATABASE 6. ISSUE IEG VALUATION STATEMENT Tangible assets: web, email, event presence, etc. Intangibles: Prestige of Property Category Exclusivity Level of Audience Interest/Loyalty Ability to Activate (key proprietary programs, promotional timeframe, can’t-buy experiences, etc.) Limited Degree of Sponsor Clutter (limitation of premium rights and benefits, advertising clutter, etc.) Formula: face value of tangible & intangible benefits, divide by cost/benefit ratio, add to subtotal the non-sponsor benefits available, = total fair market value

What Did We Learn? Our fair market value was much higher than we thought We did not factor in the value of intangible assets (43%) Allowing à la carte options shortchanged us New partnership levels: $21k, $51k, $92k Intangible value: USCAA reach and recognition. Very high scoring (9/10) in prestige of property, awareness of property, level of audience loyalty, ability to activate, networking opportunities, established track record

Mo’ Money, Less Problems Long-Term Benefits: Mo’ Money, Less Problems Partnership pricing was no longer subjective – we could justify what we were asking! Removed buyer risk for potential partners Locked in partners for longer contracts at a grandfathered rate Revenue jumped 49.42% in two years

Associate Director, Marketing Christina Gustafson Associate Director, Marketing christina.gustafson@usc.edu (213) 821-6254