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© CONSOR 2013
Valuation of IP for Acquisitions and Brand Value Enhancement
CONSOR Intellectual Asset ManagementBusiness Valuation Resources
September 25, 2013
Weston AnsonChairman
Jeff AndersonDirector, Valuation and Analytics
© CONSOR 20132
Contents• Part I: IP Valuation Overview
• Overview of Intangible Assets and Intellectual Properties
• Bundling/Asset Triage
• Valuation Issues for Different IP Bundles
• Valuation Methodologies
• Part II: IP Monetization Strategies
• Part III: Case Studies
• M&A Case Study
• National Lampoon Case Study
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Part I: What is IP?
3
Intellectual Property vs. Intangible Assets
Bundles of IP and IA Assets
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Property Types
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IA vs. IP: Commercialized Separate from Other Assets
Internet AssetsInternet Assets
Data BasesData Bases
Intellectual Properties
Intangible Assets
Customer & Vendor
Relationships
Customer & Vendor
RelationshipsPatentsPatents
CopyrightsCopyrights
TrademarksTrademarks
Trade SecretsTrade
SecretsProprietary
SystemsProprietary
Systems
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Asset Identification Trademark/Brand Bundle
5
Bundles of Intellectual Properties (IP),each contain Intangible Assets (IA)
Trademark/Brand Bundle• Primary Trademark
• Corporate Name and Logo
• Sub-Brand Names
• Copyrights
• Packaging Design
• Marketing Umbrella Campaign
• Corporate Colors
• Secondary Trademarks
• Trade dress
• Worldwide trademark registrations
• Patterns
• Designs
• Characters
• Vendor Relationships
• Vendor Contracts
• Website
• Advertising Concepts
• Graphics
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Asset Identification: Key IP Bundles
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Bundles of Intellectual Properties (IP),each contain Intangible Assets (IA)
Patents/Technology Bundle People-Related Assets
Software/IT Bundle Online Bundle
• Key Patents
• Trade Secrets
• Technical Know How
• Process Technology
• Proprietary Test Results
• Product Specifications
• Specialty Business Skills Systems
• Work for Hire Contracts
• Non-compete Clauses
• Customer Relations
• Mailing Lists
• Open Purchase Orders
• Retrieval Systems
• Platform Software
• Data Warehouses
• Software Licenses
• Source Code
• Copyrights
• Databases
• Data Mining Devices
• Domain Names
• Website Design
• E-Commerce Website
• Social Media Sites
• 1 (800) Number
• Topline Domains
© CONSOR 2013
Key Concept: Asset Triage
• Triage is the prioritization of asset bundles
• Group A: Significant value, readily monetized• Trademarks, Patents, Software, Copyrights
• Group B: Have value, but difficult to monetize• Online, Databases, Customer Relations, Characters, Colors
• Group C: Assets with potential value• Packaging, Product Shapes, Proprietary Systems
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Trademark Valuation Issues
• Classes of registration• Geographic coverage• Competing registrations• Comparison to similar trademark assets• Identification of specific income or royalty streams• Establishing accurate remaining useful life• Difficulty of accurately assessing strength of
trademark • VALMATRIX® Analysis can be applied
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VALMATRIX® Trademark Strength Analysis
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The Next Step
Once assets have been identified and bundled, the next step is valuation.
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Standard Valuation Methodologies
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Economic principal of substitution
Measures expense required to replace
Neglects future benefit
Present value of future economic benefit
Requires projections and a risk assessment
Requires allocation of benefit specific to the
asset
Value based on price of similar assets
Requires suitable comparable assets
Des
crip
tion
Replication / replacement feasible
Benchmarking
DCF
Relief from Royalty
Price Premium
Comparable transactions
Benchmarking
App
licat
ion
Valuation as Art and Science
Cost Income Market
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Hybrid Valuation Methodology
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Combination of Market and Income Approaches
Present value of future economic benefit
Requires projections and a risk assessment
Based on licensing transactions of similar assetsD
escr
iptio
n
DCF
Comparable licensing and other CF transactions
App
licat
ion
Relief from Royalty/Income Premiums
Often one of the most common and widely accepted methods of IP valuation
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Alternative Valuation Techniques and Methodologies
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• Competitive Advantage Techniques: based on the supposition that a company has an advantage over its competitors, because of proprietary technology, patents, trademarks or other intangible assets. That competitive advantage can sometimes be measured or quantified based on market share, growth, competitive pricing, etc.
• Premium Pricing Technique: Value is established by looking at the price premium paid for a product bearing the trademark relative to equivalent products without the trademark. The net present value of the projected price premium is an indication of the value of the asset.
• Options Models: allow for the evaluation of multiple possible outcomes with the assessment of risk driven by probability rather than historical financial returns. Common options models include: Black-Scholes, Monte Carlo, and Binomial Options Pricing.
• Return on Assets Employed: a method used by economists and accountants to back into the value of intangible assets. Similar to an accounting calculation for a purchase price allocation, the value of intangible assets are determined by calculating the market value of all tangible assets than allocating excess value to intangible assets.
• Profit Split Method: attributes a share or portion of a company’s profitability to an intangible asset. Using this method requires the ability to isolate or expressly separate the intangible asset from other business assets and to allocate some potion of gross revenues, operating income, or net income the specific intangible asset.
The Art and Science of Valuation
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Alternative Valuation Techniques and Methodologies
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• ValCALC® Method: a variation of the return on assets employed approach. ValCALC establishes the rate of return that each intangible asset should be earning based on calculations of adequate return for all tangible assets within a company.
• VALMATRIX® Analysis: employs a matrix of 20 predictors of value for a trademark or a patent. These predictors are then used to score the assets against those of a set of peers. The numerical score generated is then used to establish a percentile ranking relative to other brands.
• Brand Value Equation Method (BVEQTM): proprietary technique developed by CONSOR to recognize
that a brand is composed of multiple intangible assets and intellectual property elements. A core value for the trademark is calculated and then values for the additional individual intangible assets are calculated. The sum is the total brand value.
• Cost Savings Method: The amount of money that a company will save using specific intangibles instead of other alternatives. For example, Company A may have a superior blending process that enables it to reduce the number of people and the amount of raw materials need to modify product lines. The present value of cost savings would represent value.
• Liquidation Value: the price an asset would be expected to receive in a distressed or time critical situation. The value will be affected by other assets available in the marketplace. In its simplest form, liquidation value is the current value below which we can, with some certainty, guarantee the price will not fall.
The Art and Science of Valuation
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Valuation as Art and Science
The “Art” of Valuation: Context and assumptions relied upon are key when performing a valuation of IP assets. Even scientific valuation techniques can lead to incorrect results if applied improperly.
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Cost Approach Income Approach
Market Approach Relief From Royalty Approach
Valuation Methodologies
Selecting the Appropriate Valuation Methodology (the “Science”): When valuing intellectual properties, it is essential to consider each of the different valuation methodologies, in light of the information available and the specific circumstances, in order to determine the best method for ascertaining value.
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The Valuation Answer
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Reconcile results from multiple approachesReconcile the calculations to the context
There Are No Valuation Answers: Only Good Choices
Context + Time = Value
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Q & A
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Part II: IP Monetization Strategies
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• Intellectual Property Sale• Sale and Lease Back• Brand Joint Venture• IP Securitization• Licensing
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Intellectual Property Aquisitions• Iconix Brand Group
• Iconix ranks as the No. 2 global licensor (second to Disney Consumer Products) and reported $12 billion in retail sales in 2011, primarily driven by direct-to-retail programs and international expansion
• Owns a diversified portfolio of brands, including:
• Along with Charles M. Schulz Creative Associates, acquired all assets related to the Peanuts comic strip from United Media for $175 million
Candie’s Joe Boxer Mossimo
London Fog OP Danskin
Marc Ecko Ed Hardy Bongo
Rampage Material Girl The Sharper Image
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Sale/Leaseback of Intangible Assets• O’Charley’s
• O’Charley’s operates 342 restaurants under three brands: • O’Charley’s• Ninety Nine Restaurant• Stoney River Legendary Steaks
• Sale-leaseback of 50 restaurants for 20 years to strengthen financial position
• TA Triumph-Adler• Document business leader in Germany• Sold their UTAX (copiers) brand and leased it back
• Travelodge• Sold hotel properties in the U.K.• Entered new contract to license back the trademarks• Used extra funds to expand the business
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Brand Joint Ventures• Food/Beverage
• Weight Watchers: joint trade communication campaign in U.K. grocery stores• Coca-Cola partnership with the Olympics• Green Giant and Betty Crocker promotions with Box Tops for Education
• Sports• ESPN/X Games brands special promotions with Walmart, Target and at
JCPenney• Art/Entertainment
• The Thomas Kinkade Company: longstanding relationships with Disney, Warner Bros.
• Art Impressions: pop-culture brand established promotional partnerships with Taco Bell, and MyPlash/Mastercard, and supported by social media campaigns
• Technology • Motorola, Verizon and Lucasfilm introduced the Droid line of Android based
smartphones • High-tech bug zappers and landscape deco co-brands with and uses Black Flag
technology
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IP Securitization• Converting an ongoing royalty income stream into a present lump-sum
payment
• Securitization Concerns: Termination, violation, and re-negotiation of underlying license agreements; patent validity and alternative technology
Entity Value Securitized Property
David Bowie $55 million 287 song royalties
Sears Holdings Corp. $1.8 billion Kenmore, Craftsman and Die Hard Brands
Guess? Inc $75 million Trademark license agreements
Dunkin’ Donuts $1.7 billion Dunkin Donuts/Baskin-Robins brands and franchise fees
BioPharma Royalty Trust $200 million Patent royalties
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• There is no typical royalty rate.
• The most frequent rate is 5%
• 39% of agreements are for less
• 42% of agreements are for more.
Licensing Royalty Rates
Royalty Rate Distribution
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Alternative Brand Royalty Rate Analysis
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Surveys and Comparable Transactions are not The Only Tools Available
Royalty Rate Build-up Method: BVEq
BVEQ= CBV + (IVE1 + IVE2 + …. + IVEN)
CBV Core Brand Value 5.00IVE 1 Sub-brands 0.50IVE 2 Global Brand Marketing 1.00IVE 4 New Product Development 0.75IVE 5 Other Brand Assets 0.50
Total 7.75
Rate (%)Brand Value Components
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Q & A
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Part III: Case Studies
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• M&A Case Study• National Lampoon Case Study
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M&A Case Study
• A private equity firm (“Finance Co.”) is considering the acquisition of technology company (“ABC”)
• To evaluate the investment, and determine a purchase price, Finance Co. needs to analyze the value of ABC’s IP assets
• This analysis of ABC’s IP assets will also be used to secure financing for the acquisition
• Among ABC’s highly sought after assets are 15 patents
Is the value of ABC’s IP limited to their patents?
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© CONSOR 2013
Asset Identification: Key IP Bundles of ABC Company
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Bundles of Intellectual Properties (IP),each contain Intangible Assets (IA)
Patents/Technology Bundle Trademark/Brand Bundle
Software/IT Bundle Online Bundle
• 15 Key Patents
• Trade Secrets
• Technical Know How
• Process Technology
• Proprietary Test Results
• Product Specifications
• Primary Trademark
• Corporate Name and Logo
• Sub-Brand Names
• Copyrights
• Packaging Design
• Marketing Umbrella Campaign
• Platform Software
• Data Warehouses
• Software Licenses
• Source Code
• Copyrights
• Databases
• Data Mining Devices
• Domain Names
• Website Design
• E-Commerce Website
• Social Media Sites
• 1 (800) Number
• Topline Domains
© CONSOR 2013
Selecting the Appropriate Valuation Methodology
When valuing intellectual properties, it is essential to consider each of the different valuation methodologies, in light of the information available and the specific circumstances, in order to determine the best method for ascertaining value.
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Cost Approach Income Approach
Market Approach Relief From Royalty Approach
Valuation Methodologies
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Valuation of Patent/Technology Bundle
• Method: Income approach• Explanation: Since the ABC patents have generated revenue the
income approach is used. If the patents had not yet generated revenue the cost approach would likely be used.
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Annual Free Cash Flow Generated by the Patents/Technology a $1,200,000Discount Rate b 20%Perpetual Growth Rate c 5%Total Value of Patent/Technology Bundle a/(b‐c) $8,000,000
Income Approach Valuation of Patents/Technology Bundle
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Valuation of Trademark/Brand Asset Bundle
• Method: Relief from royalty approach• Explanation: In the relief from royalty approach a hypothetical
situation is created to estimate what a business would pay to license its own intellectual property assets in an arms‐length transaction. The value is then calculated as the present value of the avoided hypothetical royalty charges. In this case approximately 10% of the company’s revenues are sold under a well known brand name.
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Revenue $8,200,000Royalty Rate 7%Hypothetical Royalty Earnings a $574,000Discount Rate b 20%Growth Rate c 5%Total Value of Trademark/Brand Bundle a/(b‐c) $3,826,667
Relief From Royalty Approach Valuation of Trademark/Brand Bundle
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Valuation of Software/IT Bundle
• Method: Cost Approach• Explanation: The cost approach represents the work that would
be necessary to reproduce the software, source code, and other IT assets including all of the modifications, patches, and discarded code as well as corresponding legal fees.
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Employees Hourly Salary Labor Hours TotalSenior Programmers 70 13,500 $945,000Junior Programers 45 17,500 $787,500Engineers 60 2,500 $150,000Legal 200 195 $39,000Total Value of Software/IT Bundle $1,921,500
Cost Approach Valuation of Software/IT Bundle
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Valuation of Online Bundle• Method: Market approach• Explanation: The market approach values Intellectual property by
comparing the subject asset, to publicly available transactions involving similar assets with similar uses. This provides a reasonable indication of value if an active market exists that can provide examples of recent arm’s‐length transactions, with adequate information regarding terms and conditions.
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Number of Identified Comparable Market Transaction 551st Quartile $250,000Median $1,200,000Mean $1,750,0003rd Quartile $3,400,000
Market Approach Valuation of Online Bundle
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Valuation Summary of ABC Company’s IP Bundles
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IP Bundle Valuation Methodology ValuePatents/Technology Bundle Income Approach $8,000,000Trademark/Brand Bundle Relief From Royalty $3,826,667Software/IT Bundle Cost Approach $1,921,500Online Bundle Market Approach $1,200,000Total Value of IP Bundles $14,948,167
Valuation Summary of ABC Company's IP Bundles
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Valuation Conclusion
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Present Value of Expected Future
Benefit
Valu
e of
Bus
ines
s
=
Tangible Assets
Intangible Assets
= =
Tangible Assets
Online Bundle
Trademark/Brand Bundle
Software/IT Bundle
Patents/Technology
The value of technology company ABC is more than just the value of their patents. It is equal to the value of their tangible assets plus the value of their IP Bundles.
Key Conclusion
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Valuation of the National Lampoon™ Brand IP
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• CONSOR Intellectual Asset Management (“CONSOR”) was retained to analyze and value specific intellectual property assets owned by National Lampoon, Inc. (“NLI”)
• The specific intellectual assets being valued are the trademark, National Lampoon™, and affiliated domain names (together, the “Brand IP”)
• Analysis based on the Brand IP’s current use, as owned by NLI• Analysis performed as of May 30th 2012
Assignment Overview
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Background
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Brand IP
• National Lampoon™
• Those registered website domain names that include the term “nationallampoon”
• Does not include the Media Library, or website domains that do not use the term “nationallampoon”
Media Library
• 11 motion pictures produced or acquired by NLI
• The Media Library does not include 31 National Lampoon branded titles, including:
o Animal Houseo The Vacation serieso Van Wilder
Website Network (“NLN”)
• Network of over 200 affiliated websites targeting the college and young adult markets
• Includes over 60 websites acquired or launched by NLI, including:
o NationalLampoon.como DrunkUniversity.como TOGATV.como KnuckleHeadVideo.com
• NLI’s business activities include: Monetization of the National Lampoon trademark; a network of websites (NLN); and, a media library
• NLI pays Harvard Lampoon 2% of revenues for the right to use of the term “Lampoon”
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Valuation Approaches for Brand IP
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Method Description Relevance for Analysis
Cost Approach
Amount a potential buyer would pay to replace or create an asset themself
Not Used in this Analysis:As the Brand IP has been used for many decades, not feasible to recreate the asset in a reasonable timeframe
Income Approach
Present value of future economic benefits received from ownership of an asset
Applied in this Analysis:Normalized income related to licensing use and monetization of the Brand IP
Market Approach
Value based on observed transactions involving comparable or similar assets
Not Used in this Analysis:Unable to identify transactions involving acquisition of comparable assets
Relief from Royalty Approach
Present value of expected royalty compensation from observed licensing transactions involving comparable or similar assets
Applied in this Analysis: Analyzed comparable asset licensing royalty rates, applied to NLI’s reported revenues
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Financial Results
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• Most recent financial statement is for FY July 2008: NLI may no longer operate as a going concern
• Other Revenue includes: production, advertising, publishing, distribution and tours
• Net Loss reported for each of the periods reviewed; SG&A expense often exceeded total revenue
• Licensing revenue fluctuated year to year, driven by non‐recurring transactions
• Cost of Licensing Revenue not defined in financial reports, exceeds the 2% royalty owed to Harvard
Our analysis isolated and normalized licensing revenues and expenses related to management and licensing of the Brand IP
NLI Summary Income Statement Common Size, % of Total RevenueFor the fiscal year ended July 31:� 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008
RevenueLicensing Revenue 904,244 940,661 1,981,814 931,738 3,952,847 3,699,444 90% 49% 54% 25% 65% 50%Other Revenue 103,640 980,903 1,691,628 2,755,956 2,146,218 3,738,540 10% 51% 46% 75% 35% 50%
Total Revenue 1,007,884 1,921,564 3,673,442 3,687,694 6,099,065 7,437,984 100% 100% 100% 100% 100% 100%
ExpensesSG&A 4,159,094 4,285,858 5,096,414 5,303,877 5,837,705 5,447,594 413% 223% 139% 144% 96% 73%Cost of Licensing Revenue 285,174 421,801 517,745 231,386 155,842 77,858 28% 22% 14% 6% 3% 1%All Other Expenses 2,486,028 2,338,155 6,719,315 5,011,516 2,609,688 3,599,506 247% 122% 183% 136% 43% 48%
Total Expenses 6,930,296 7,045,814 12,333,474 10,546,779 8,603,235 9,124,958 688% 367% 336% 286% 141% 123%
Provision for Taxes 2,424 2,857 9,138 ‐ ‐ ‐ 0% 0% 0% 0% 0% 0%
Net Income (Loss) (5,924,836) (5,127,107) (8,669,170) (6,859,085) (2,504,170) (1,686,974) ‐588% ‐267% ‐236% ‐186% ‐41% ‐23%
Source: NLI's form 10‐K for 2003‐2008
© CONSOR 2013
Normalized Licensing Revenue
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• NLI’s Licensing Revenue fluctuated year to year
• Based on information available, removed non‐recurring revenues in order to estimate future, normal revenue from use of the Brand IP
Recurring annual Licensing Revenue estimated at $1 million
Normal Licensing Revenue CalculationFiscal Year Ended 7/31 2003 2004 2005 2006 2007 2008
Licensing Revenue as Reported 904,244 940,661 1,981,814 931,738 3,952,847 3,699,444
Adjustments ‐ ‐ (950,000) ‐ (2,902,295) (2,384,172) After Adjustment, Normalized Licensing Revenue 904,244 940,661 1,031,814 931,738 1,050,552 1,315,272
Average 1,029,047 Median 986,238
Adjustments to Licensing Revenue2005
2007
2008
Removed settlements with Universal Studios: $2.24 million for unpaid royalties; and $662,295 related to video royalty revenue (2008 10‐K, page 26)
Removed sale of international distribution licenses in 2008 for $1,492,196, and sale of a library asset to Comedy Central for $891,976 (2008 10‐K, page 26)
Removed $400,000 advance on video royalties from Genius Products and $100,000 from Creative Tours for the video game rights to the NL brand name with no corresponding payment in 2006. Also removed $200,000 licensing fees related to video release of "Dorm Daze", and approximately $250,000 in royalties on older titles. (2006 10‐K, page 19)
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Reasonable Expenses
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• At NLI, SG&A expense exceeded reported revenues for several periods
• Normal earnings from the Brand IP based on industry‐based SG&A expense ratios
Applied an SG&A ratio of 40% of revenue to calculated normal earnings for the Brand IP
Reviewed the SG&A expense ratios for comparable industries to determine level of earnings a going concern would expect to achieve from the Brand IP
Reviewed SG&A ratios for 12 of the largest publicly traded North American companies in the Movie and
Entertainment Industry.
Also reviewed SG&A ratios of 15 of the largest publicly traded North American companies in the Apparel,
Accessories, and Luxury Goods Industry, as a significant portion of these firms’ revenues derive from
the management of brand IP.
Movies and Entertainment Industry
Measure SG&A RatioMedian 19.6%
1st Quartile 17.6%
3rd Quartile 23.6%
Average 22.3%Ratios for 12 publicly traded North American companies with market capitalizations over $1 billion
Measure SG&A RatioMedian 35.9%
1st Quartile 28.4%
3rd Quartile 40.1%
Average 34.3%
Brand Owning Companies in the Apparel, Accessories, and Luxury Goods Industry
Ratios for 15 publicly traded North American companies with market capitalizations of over $1 billion
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Licensing Activity Earnings
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• Applied industry based SG&A Ratio to the calculated Normalized Licensing Revenue: resulting expense is equivalent to personnel costs for a 1‐2 person brand management & licensing department
• Applied the 2% contractual royalty due to Harvard Lampoon on any licensing activity
Normal annual earnings estimated at approximately $375,000
Calculation of earnings from licensing activity represents the earnings that could be achieved if the Brand IP were managed outside the cost structure of NLI
Earnings from Licensing ActivityFiscal Year Ended 7/31 2003 2004 2005 2006 2007 2008
Adjusted Licensing Revenue 904,244 940,661 1,031,814 931,738 1,050,552 1,315,272
Applied SG&A Ratio 40% 40% 40% 40% 40% 40%Licensing Activity Expenses 361,698 376,264 412,726 372,695 420,221 526,109
Harvard Lampoon Royalty 2% 2% 2% 2% 2% 2%Harvard Lampoon Royalty Expense 18,085 18,813 20,636 18,635 21,011 26,305
Pre‐tax Earnings 524,462 545,583 598,452 540,408 609,320 762,858 Estimated Tax Rate 35% 35% 35% 35% 35% 35%
After‐tax Earnings for Brand IP 340,900 354,629 388,994 351,265 396,058 495,858
Average 387,951 Median 371,812
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Discount Rate & Royalty Rate
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For Valuation Analysis:• 30% Discount Rate• 5% Royalty Rate
Discount Rate Benchmarks Royalty Rate BenchmarksBenchmark Discount Rates, As of May 30, 2012Indicator Rate (%) Source1-year Treas 0.20 bvresources.com
20 Year T-bond 2.44 bvresources.com
30 Year T-Bond 2.97 forecast.org
Mortgage 30 Year 3.91 federalreserve.gov
Moody's Aaa 3.76 bvresources.com
Moody's Baa 5.12 bvresources.com
Senior Lenders 6 PCOC, Summer 2011
Asset-backed Lenders 16 PCOC, Summer 2011
Mezzanine Funds 20.5 PCOC, Summer 2011
Private Equity Groups 30 PCOC, Summer 2011
Venture Capital Funds 40 PCOC, Summer 2011
Royalty Rates for Comparable Brand AssetsSource Rate
4.0%
5.0%
8.5%
10.0%
4.0%
8.5%
10.0%
10.0%
Licensing Royalty Rates; 2012 Edition
5.0% ‐ 9.0%
The Licensing Letter, 2011 6% ‐ 20%
NLI's Agreements 2.0%
5.0%
7.0% ‐ 10.0%
Royalty paid to The Harvard Lampoon for use of the term "Lampoon"
Corporate use of a trademark for "Motion Picture Films"
3rd Quarti le Rate
Notes
RoyaltyStat® Compiled Entertainment & Media
Royalty rates for 2751 trademark l icense agreements in the RoyaltyStat database
RoyaltyStat® Compiled Trademarks
Royalty rates for 457 Entertainment & Media l icense agreements in the RoyaltyStat database
Royalty paid by Warner Brothers on gross receipts after production costs, for producing a theatrical production using the term "National Lampoon"
Royalty paid by Warner Brothers on merchandise using the term "National Lampoon"
1st Quarti le rate
Median rate
Average rate
3rd Quarti le Rate
1st Quarti le rate
Median rate
Average rate
Royalty rates for Entertainment/Character‐Based l icensed merchandise. At the higher end of the range are well known properties l icensed by entities such as Disney and Marvel
© CONSOR 2013
Value of the Brand IP
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Calculated value of the Brand IP as used by NLI: $1.1 million
Income Approach
Normal Brand IP Earnings a 375,000
Discount Rate b 30% Slide 11
Growth Rate c 0%
Value of Brand IP a / (b‐c) 1,250,000
Relief from Royalty Approach
Revenue a 6,000,000
Royalty Rate b 5.0%
Normal Brand IP Earnings c 300,000Discount Rate d 30% Slide 11
Growth Rate e 0%
Value of Brand IP c / (d‐e) 1,000,000
As above
Stagnant use of Brand IP, no indication of growth since 2008
Slide 11
Slide 10
All revenues of NLI
a x b
© CONSOR 2013
Conclusion
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• IP Valuation is both Art and Science
• The valuation context key
• Multiple approaches can be used to determine value
• Intellectual properties can hold substantial value
• Various monetization opportunities exist
© CONSOR 201346
CONSOR’s Serviceswww.consor.com
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