Category: Pop Culture

Presidential Predictions 2016: Pick your Poison

Presidential Predictions 2016Presidential Predictions 2016

Given today is “Super Tuesday,” we thought we’d opine on some of the statistics and predictions about various candidates making it to America’s top office.

According to British prognosticators wagering their own money, Hillary Clinton has a 53% chance of winning the general election.

However, Mr. Helmut Norpoth, a professor of political science at Stony Brook University, recently made headlines for his prediction that Donald Trump has a 97% chance of becoming president. Professor Norpoth’s model measures candidates’ performances in primaries and caucuses to gauge party unity and voter excitement and also focuses on certain patterns in electoral cycles. He claims that his model has correctly predicted every election (except one) for the previous 104 years (with obvious back testing).

Conversely, David Rothschild predicts that the Democratic candidate (Hillary Clinton) has a 64% chance of winning. Mr. Rothschild is an economist at Microsoft who makes his predictions by aggregating betting market data and polling. His previous research boasts successful predictions for 21 of the first 26 primary contests in 2012.

Whoever wins, it’s important that you understand the candidates’ key economic policy positions, whether it’s about income or estate taxes, foreign trade, or domestic government investment programs. If a candidate’s policies become law, they can have a significant impact on your personal financial outlook or business.

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Presidential Predictions 2016: Pick Your Poison

Martin Hanan

FOUNDER AND PRESIDENT
Tel: 817-481-4900
mhanan@valuescopeinc.com
Full Bio →

Marty Hanan is the founder and President of ValueScope, Inc., a valuation and financial advisory firm that specializes in valuing assets and businesses and in helping business owners in business transactions and estate planning.  Mr. Hanan is a Chartered Financial Analyst and has a B.S. Electrical Engineering from the University of Illinois and an MBA from Loyola University of Chicago.

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Super Bowl 50 Expected to Break Records and New Ground in Viewership

Our research suggests it will, but not for a few more years.

Streaming Super Bowl 50

Last year’s Super Bowl XLIX (49) between the Patriots and Seahawks posted the largest television audience in U.S. history with 114.4 million viewers, breaking the prior record from Super Bowl XLVIII (48) between the Broncos and Seahawks. Super Bowl 50 (without the roman numerals this year) is widely expected to set a new record, given the strong ratings for the conference championship games and rumors and speculation that it will be the final game of future hall of fame quarterback Peyton Manning. ValueScope estimates the final TV ratings will reach about 119 million, an increase of 4.0% over last year’s record setting mark. Over the last 15 Super Bowls, an annual increase of greater than 4% has only occurred three times (2006, 2008 and 2010).

Streaming Super Bowl 50

Super Bowl Audience

The projected Super Bowl audience is expected to be 2.4x the audience of the AFC/NFC championship games, which averaged 49.7 million people two weeks ago. So what factors draw in an additional 69.3 million people to the NFL for one Sunday? A recent pre-Super Bowl survey by the National Retail Federation (NRF) reported that only 34.7% of Americans that plan to watch the Super Bowl cite the game as their primary reason. 17.7% of potential U.S. viewers cited commercials.

The NRF estimates that nearly 184 million people plan to watch at least part of Super Bowl 50. 43.3 million Americans are planning to host a Super Bowl party for friends and/or family. Another 70 million Americans plan on attending one of those watch parties. The younger demographic cited particular interest in the entertainment unrelated to the game’s players and coaches. Lady Gaga is scheduled to sing the national anthem prior to kickoff and Coldplay, Beyoncé and Bruno Mars will perform at halftime.

Role of Streaming

The role of streaming will also increase for this year’s Super Bowl. The game has been available on PCs and tablets since 2012. However, Super Bowl 50 will mark the first time the game will be shown via streaming devices such as the Xbox One, Apple TV, Roku and Chromecast. Streaming coverage is also expected through Amazon Fire and to Verizon mobile customers.

The NFL and its media partners are trying to evolve with the younger demographic. CBS (this year’s Super Bowl broadcast network) reported triple digit growth in viewers and minutes for the AFC championship game over the prior year. According to Variety magazine, only 18 of 70+ advertisers chose to run commercials on both TV and online. This year, CBS mandated that all sponsors run their commercials on both media formats. A 30 second ad on TV is reportedly running $4.5 million to over $5 million for Super Bowl 50. The price for digital ads was expected to be much cheaper.

Super Bowl 50 Expected To Break Records And New Ground In Viewership

Brent Shockley

SENIOR MANAGER
Tel: 817-481-4904
bshockley@valuescopeinc.com
Full Bio →

 

Star Wars: Will the Return on Investment Awaken for Disney?

Our research suggests it will, but not for a few more years.

 

Disney's Roi Return On Investment Star Wars

Disney’s ROI Return on Investment Star Wars

When Star Wars: The Force Awakens arrives in theaters, the question isn’t whether it will shatter records—it’s by how much. Many sources estimate The Force Awakens will be the highest-grossing film of 2015 both domestically and internationally, with figures in excess of $1.5 billion. An analysis by Morgan Stanley in November estimates it will be among the top three highest-grossing films of all time.  While these are impressive numbers, what do they mean for Disney’s return on a $4 billion investment in Lucasfilm Ltd? Disney’s ROI Return on Investment Star Wars.

Merchandising

Merchandising has the potential to be even more lucrative than the film itself. When Disney bought Lucasfilm Ltd in 2012, they certainly had an eye toward integrating Star Wars into their already dominant brand merchandising, and that’s exactly what they’ve done. Star Wars-themed attractions are slated for construction in both Disneyland and Disney World. There are stormtrooper necklaces from Kay, a Millennium Falcon bed from Pottery Barn, and even intergalactic Coffee-mate creamers and a Luke Frywalker Mr. Potato Head. In 2014, global retail sales of Star Wars merchandise were $2.4 billion, making it the fifth-most popular licensed brand in the world—but another Morgan Stanley analysis estimates that The Force Awakens could double that figure to $4.9 billion, making it the number one best-selling brand worldwide.

Considerations

Considering these enormous numbers and the fact that The Force Awakens is just the first of five or six  Star Wars films slated to release by the end of 2020, it’s obvious that Disney’s purchase of Lucasfilm was a smart investment—but it may take longer than expected for Disney to break even on the purchase. For one, Disney doesn’t necessarily get royalties from the sale of every single Star Wars toy—more than likely, most of the toy companies pay a one-time licensing fee to Disney for rights to the brand and then keep the revenue for themselves.

Moreover, because of Hollywood’s opaque accounting practices, it’s unclear how much of a cut Disney will receive from the first few weeks of ticket sales. We estimate that, when all is said and done, Disney will retain anywhere from 40% to 60% of the film’s gross ticket sales—but even if The Force Awakens exceeds every expectation and pulls in $1.5 or $2 billion, that won’t be enough to break even on their buyout of Lucasfilm.

The Crowd

However, the great thing about a franchise like Star Wars is its ability to reliably draw a crowd again and again. Disney has a Star Wars film slated to be released every year between now and 2019. Even if next year’s Rogue One spin-off doesn’t quite pull Disney’s revenues over the $4 billion mark, Episode VIII almost certainly will. It may end up taking five years, but by the eighth installment’s release in 2017, Bob Iger and the rest of Disney can confidently say they made a good investment.

Tags: Disney’s ROI Return on Investment Star Wars

Star Wars: Will The Return On Investment Awaken For Disney?

Brent Shockley

SENIOR MANAGER
Tel: 817-481-4904
bshockley@valuescopeinc.com
Full Bio →

 

The Value of Invincibility in the UFC

How much is it worth to get kicked in the face?  If you’re Ronda Rousey, our answer may cheer you up a bit.

How much is it worth to get kicked in the face?

If you’re Ronda Rousey, our answer may cheer you up a bit.

The UFC wunderkind, who went undefeated during the last three years, suffered an unanticipated loss this past weekend during UFC 193, when a blow from kickboxer Holly Holm sent her crashing to the mats. She lost more than just her match and her title—she also lost her veneer of invulnerability, a central component of the Rousey mystique. So we were curious—did Holm’s kick do as much damage to Rousey’s brand value as it did to her upper lip?

Projected Fight Earnings

We looked at Rousey’s current projected fight earnings for 2016 through 2019 and compared it to an alternate scenario, which assumes she had won her match against Holm. We account for the fact that her medical suspension means she’ll only be able to manage 2 matches in 2016 instead of her usual 3 per year, but we also estimate that her viewership will grow at a slightly higher rate now that she’s more of a wildcard, rather than if she had continued her streak.

Our estimate for the end of 2016 shows that Rousey’s earnings would be roughly the same had she won or lost; but with 33% less time in the cage.  Said differently, her earning power for next year went up on a relative basis due to her loss last weekend.  We also estimate that viewership of her matches will go up over the next few years.  By the end of 2019, though, her cut on the bump in viewership will more than make up for the temporary setback of her loss—the increase in her present value between the two scenarios is about $4 million over the next 4 years.

Ronda Rousey Profit

It makes sense to assume that the loss of an athlete’s title would be followed by a loss in an athlete’s value. But that doesn’t take into account that invincibility is boring. People aren’t going to keep tuning in if they know what to expect. The UFC was running out of fighters to throw at Rousey until UFC 193, when they found a genuine rival for her in Holly Holm. Not only does this make the possibility of a rematch much more lucrative, it also means that Rousey is no longer predictable. The stakes are higher for every single match from here on out, because now we know she could lose—and that makes it even more thrilling to watch.

The Value Of Invincibility In The Ufc

Michael Conroy, CFA

DIRECTOR
Tel: 817-481-6348
mconroy@valuescopeinc.com
Full Bio →

Mr. Conroy has more than 20 years of consulting and business valuation experience, concentrating on complex estate and gift valuation matters. He provides business valuation and financial consulting services to companies in a broad range of industries. Working with domestic and international clients, Mr. Conroy has performed thousands of business appraisals involving gift and estate tax, financial reporting, mergers, and acquisitions (valuations for buyers/sellers, fairness, and solvency opinions), litigation support, expert testimony, and other company requirements (including stock options and ESOPs). Mr. Conroy previously worked with the national valuation firm CBIZ Valuation Group, LLC here he was a senior manager. Prior to that, he taught chemistry and physics to high school and college students at Xavier College in Ba, Fiji, for two years as a U.S. Peace Corps volunteer.