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-   -   Stop Anthos from Taking over CrossFit (http://board.crossfit.com/showthread.php?t=76936)

Thomas R. Stegelmann 07-29-2012 05:26 AM

Re: Stop Anthos from Taking over CrossFit
 
Let the community buy the shares and turn CrossFit into a charity afterwards.

Eric Griffith 07-29-2012 08:08 AM

Re: Stop Anthos from Taking over CrossFit
 
I would think that there were measures taken to ensure that the "non-managing equity partner" could not use their stake to exercise any control over the direction of the company. This should carry over to whomever owns that stake. If they could not drive the company before they sold it, how would the new owners have any control. Furthermore, the board would have control over the company and most likely have to approve the sale of equity.

Affiliates are the lifeblood of CrossFit but the brand and the Games are the domain of HQ. We could survive without them, affiliate ourselves, and form a new HQ but is nice to have this thriving brand behind us. I am in agreement with the posts before mine. If a stake in HQ is for sale, let's organize and buy it! I have 3500 affiliate email addresses, if it goes south and CF gets trashed, we can just start a CO-OP ourselves where the affiliates are all stakeholders.

Joey Powell 07-29-2012 08:10 AM

Re: Stop Anthos from Taking over CrossFit
 
Ron does work for Lauren.

Eric Griffith 07-29-2012 09:08 AM

Re: Stop Anthos from Taking over CrossFit
 
Why aren't we emailing Lauren Jenai "Glassman" - CrossFit Captain to tell her we won't stand for it?

Russell Berger 07-29-2012 09:21 AM

Re: Stop Anthos from Taking over CrossFit
 
Since we began discussing information related to Anthos, we have been getting swarmed with concerned emails and phone calls. This is no surprise. Everyone has nearly the same question- some version of "what can I do?"

To put it simply, the key is not action, but education. We are dealing with a threat that must first be understood. That's why we want you all spreading the word on this. We want you all taking a hard look at the Affiliate system and asking important questions about why it is so successful, and what we have to lose. Enough of you now know the basic facts of the issue to start forming opinions and coming to conclusions on what an Anthos purchase of CrossFit could mean for you and your Affiliate, and for many of you this is scary.

Trade that fear for resolve. A stampede won't fix this, but education and solidarity will. Nothing of this magnitude happens overnight. We have time to analyze the problem and act on it as a community . Keep your primary focus on doing what you all do best- taking care of clients, but keep your ears to the ground!

Douglas Menikheim 07-29-2012 09:44 AM

Re: Stop Anthos from Taking over CrossFit
 
Dale -

So is this person a majority shareholder? Just based on some brief reading of this thread and the concern over the loss of control at a board and management level it sounds like he/she is a majority shareholder.

There isn't a right of first refusal or similar option to buy for either the Company or Coach G, if, and when, this shareholder presented a bona fide offer to purchase? I would think that this type of situation would have been on everyone's mind when the shares were sold to this person.

Similarly, and this is just out of curiosity, but doesn't the Reebok agreement have a similar option? I would have thought from their perspective that they were entering into a relationship with Crossfit, Inc. in its present state and philosophy which means keeping the ownership and management intact. A situation like this is something I would have been concerned with if I was Reebok and would have attempted to negotiate an option to purchase a controlling stake in the Company if the majority holders wanted out. I can't see Reebok wanting to partner with a Company that they couldn't have a say in with respect to the ownership.

I am sure you guys are using some excellent outside counsel on this, any chance you can share what firm you are using hahaha? Situations like this is why I became a corporate lawyer, wish I working for Crossfit right now haha.

Michael Petersen 07-29-2012 09:45 AM

Re: Stop Anthos from Taking over CrossFit
 
I don't know anything about Anthos, but I have done significant work with hedge funds and private equity groups. Every single one that I worked with was interested in only one thing: ROI (return on investment). The math on CrossFit is pretty simple: multiply the number of affiliates by the annual fee (it's a nice number). Look at the certification schedule (it's booked for months out). Look at the overhead (very little). Add in the free (to CrossFit) advertising from ESPN and Reebok and this is a very nice cash cow.

I don't know Lauren/non-managing equity partner (for the sake of argument, let's assume they are the same individual). If this is an ex-wife looking to liquidate an asset, it should be safe to assume that she wants the highest price possible with the least drama involved. Affiliates aligning together to do this is a sound strategy in theory, but in practice getting thousands of people to act in concert is pretty tough. Obviously any group of affiliates is going to have to outbid Anthos...so who is interested in putting in the work to make this happen?

Douglas Menikheim 07-29-2012 10:01 AM

Re: Stop Anthos from Taking over CrossFit
 
I cannot see affiliates buying the shares as an option. It would probably be a logistical nightmare. I would think that the affiliates would have to form some sort of cooperative entity through which they would purchase the shares. Now would every affiliate have an equal stake in this new entity...governance would be a major pain. On top of it how would new affiliates figure into this, would each one have to buy into this new entity? How would it work if some Affiliates chose not to participate?

Russell Greene 07-29-2012 10:14 AM

Re: Stop Anthos from Taking over CrossFit
 
Quote:

Originally Posted by Michael Petersen (Post 1081844)
I don't know anything about Anthos, but I have done significant work with hedge funds and private equity groups. Every single one that I worked with was interested in only one thing: ROI (return on investment). The math on CrossFit is pretty simple: multiply the number of affiliates by the annual fee (it's a nice number). Look at the certification schedule (it's booked for months out). Look at the overhead (very little). Add in the free (to CrossFit) advertising from ESPN and Reebok and this is a very nice cash cow.

I don't know Lauren/non-managing equity partner (for the sake of argument, let's assume they are the same individual). If this is an ex-wife looking to liquidate an asset, it should be safe to assume that she wants the highest price possible with the least drama involved. Affiliates aligning together to do this is a sound strategy in theory, but in practice getting thousands of people to act in concert is pretty tough. Obviously any group of affiliates is going to have to outbid Anthos...so who is interested in putting in the work to make this happen?

Michael,

Anthos wants to make money from CrossFit's current seminar system, sure, but they told us their plans and they want to dramatically alter CrossFit's business model. They see the fact that CrossFit affiliates don't all push a particular supplement and equipment brand as money left on the table. In other words, they think that CrossFit HQ could be squeezing the affiliates for much more than the rather minimal affiliate fee that it currently is. And, of course, such deviations from CrossFit's tried and true Affiliate system would not be optional.

To address your second point, the aforementioned non-managing equity partner has already rejected a better offer from CrossFit, Inc. to buy out her shares.

Russell Greene 07-29-2012 10:17 AM

Re: Stop Anthos from Taking over CrossFit
 
Also, I'd like to reiterate Berger's point that our goal right now is to raise awareness.

If you're wondering what you can do to help, then educate yourself and as many others as possible about this issue.


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