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Old 08-10-2012, 08:18 PM   #431
Ben Norris
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Daniel Wheeler View Post
To the last part...she dislikes GG.

To the first part, Anthos is not omnipotent. Affiliates will go where the money goes with whoever ends up with the power.

How many more CF gyms can be opened anyway? There are a good 75 or so where I just moved from, that has to rival starbucks.

Whats gouging if 200-300 a month is standard? Thats some serious gouging if your gouging CF members.
I dont think he means put up membership prices to 500 a month. I think he means pay kids 5 bucks an hour to run the classes and you make a huge profit margin from doing so.
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Old 08-10-2012, 08:23 PM   #432
Daniel Wheeler
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Nathan Holmes View Post
You are confusing the term "grassroots" with "faddish" or "hipster-like". I think Crossfit is different. The majority of the fitness industry (24 hour fitness) is all about looking good. Other gyms are about lifting as much weight as possible. Very few (or none, in my hometown) advertised true fitness and being better prepared for whatever life might through at you. I think what Daniel is getting at is that Crossfit has that grassroots feeling...like you just discovered something amazing that rocks your world and you want to share it with everyone. There is a sense of excitement when you make measurable progress in so many aspects (the ten fitness domains that Crossfit focuses on....and lets not leave out body composition). In a time when America's obesity's rate is soaring, Crossfit IS counter to our (American) culture of fast foot and slow living. Maybe I'm putting my words into Daniel's mouth, but I'm guessing that's more like what he meant. Someday it might be mainstream in America. And to be honest, I sure hope so! Its becoming more so every day. When it becomes truly mainstream, maybe we'll have a healthier population and a better world. Also, we'll sing kumbaya and put flowers in each others hair.

-Nate

Thats sort of what I was getting at. Crossfit doesn't want to become mainstream though because the current model can't survive if that happens.

Fad is just a term used to describe a movement that didn't find a permanent place for itself.

Last edited by Daniel Wheeler : 08-10-2012 at 08:27 PM.
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Old 08-10-2012, 08:25 PM   #433
Daniel Wheeler
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Ben Norris View Post
I dont think he means put up membership prices to 500 a month. I think he means pay kids 5 bucks an hour to run the classes and you make a huge profit margin from doing so.
Thats what Rob B was getting at, Rob P went the other way for some reason.
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Old 08-10-2012, 08:43 PM   #434
Albert Thomas
 
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Re: Stop Anthos from Taking over CrossFit

I work for a private equity firm and have been crossfitting for just over a year. I am one of the many "Crossfit changed my life" stories out there, even though I'm still very much an average Joe in the Crossfit community. I have also become fascinated with the business of Crossfit (and the affiliates) and have made a study of the incredible success it has had. I attribute this not just to the template itself, but also the way it is delivered. Crossfit doesn't just get you in shape, the community aspect also makes you want to continuously strive for improvement and, more importantly, it makes you want to change the way you live your life.

There is a lot of information being thrown out on this thread that is incredibly inaccurate, both as it relates to the situation and the objectives of a private equity firm (for the record, VCs are very different, and Anthos is not a VC). However, there is also some accurate information being thrown out. I hope my perspective will add value to the discussion. One of the things that is definitely true is that private equity firms exist to make as much money as possible. One of the things that is not true is that they would have to drastically change the Crossfit business model to do so. Either way, it doesn't matter. Lauren Glassman will need to sell her stake as a result of the divorce, so like it or not, a new owner is coming. The focus now should be on finding the right partner, and given that Coach Glassman has already expressed his concern with having Anthos as a partner, they do not appear to be the right choice. A contentious ownership situation can only hurt the business. For the record, I agree that a 50/50 ownership situation is untenable.

My biggest question is, who is advising Crossfit, Inc. from a financial standpoint? I can actually understand why Lauren feels that the counter offer Coach Glassman made is nowhere nearly as attractive. With Anthos' offer, she would get about $17M after taxes (assuming 15% cap gains tax and a $0 basis), and she gets that day 1. I can see why that would be more attractive than waiting for an equivalent amount. My question is, why was that the counter offer? There are a number of different ways they could have structured the counter offer to make it more attractive (and that would give Coach Glassman complete control going forward).

If the partnership between Anthos and Coach Glassman goes sour, which it appears it will, then the value of Crossfit, Inc. would be significantly impaired. That would imply that Lauren walked away with a disproportionate share of the value. As a private equity investor, I'm not sure why Anthos would want to walk into a situation that is contentious from the beginning, but I assume there is something I don't know. Then again, hubris has driven a lot of people much smarter than me to make some pretty dumb decisions.

So why wouldn't the judge approve a deal that works well for both parties? That's one question. Another question is why has Crossfit, Inc. not sought a deal and/or partnership that would do more to preserve what has made Crossfit so successful? To be clear and to echo a few other sentiments expressed here, Crossfit, Inc. is not perfect and could probably benefit from a few changes to the way it is managed, but the point is there is a middle ground and I'm not seeing it. I hope there is something I am missing.
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Old 08-10-2012, 08:45 PM   #435
Steve Kane
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Russell Greene View Post
Steve,

If you think that Bryan Kelly's plan sounds swell, please go and become his first affiliate. The same goes for you, Patrick. I intend no ill will when I say that.

I've spoken to Greg, at length, many times, about this issue. He has always said that he only wants people on his side who understand and appreciate CrossFit's elegant prescription for fitness and business. If you think Anthos could add some tools or products and make a better fitness company, we will not stop you guys from joining them. We'd love for you to leave.

I can't help but notice, however, the discrepancy in responses. With few exceptions, CrossFit Affiliate owners tend to think that outside intervention in their business is a horrible idea and a violation of CrossFit's covenant with its affiliates.

On the other hand, those who support Anthos' plan, such as Patrick and Steve, for the most part do not own CrossFit affiliates. There must be something about owning your own affiliate that makes you hyper-vigilant to the perils of outside intervention.

Lastly, think to yourselves, how would you have reacted if Greg Glassman had sold out to Anthos and left the affiliates behind? Would you have taken the side of Greg and venture capital against the 4,400 affiliates whose business models and independence were now at risk? Would you not accuse him of betraying all that he'd said and built?
Thanks for the invite - I already did. Maybe I'll paint an Anthos symbol on my homemade plyo box in my garage gym and be Affiliate #1. Wonder what they would offer me fo 50%?? Only problem is I have no paying members other than my boys cranking out a few burpees now and then with dad.

This may not have been clear, but I'm no Anthos shrill and not advocating for their plan. Point I'm trying to make is that all companies reach a point where they have to move out of the garage and into the boardroom. If the judge rules in your favor, and there is still a company left to run, providing some additional resources to help manage the growth seems to be a wise business decision.
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Old 08-10-2012, 10:47 PM   #436
Nathan Holmes
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Daniel Wheeler View Post
Thats sort of what I was getting at. Crossfit doesn't want to become mainstream though because the current model can't survive if that happens.

Fad is just a term used to describe a movement that didn't find a permanent place for itself.
I'm curious; what do you think makes the current model unsustainable? Do you mean that the current level of growth is unsustainable and the market will become saturated with Crossfit boxes? Or do you mean that the corporate structure couldn't support a "mainstream" Crossfit as it does now with programming, education/content, and certifications? Or something else entirely?

-Nate
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Old 08-10-2012, 11:24 PM   #437
Donald Clarkson
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Re: Stop Anthos from Taking over CrossFit

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Steve,

If you think that Bryan Kelly's plan sounds swell, please go and become his first affiliate. The same goes for you, Patrick. I intend no ill will when I say that.

I've spoken to Greg, at length, many times, about this issue. He has always said that he only wants people on his side who understand and appreciate CrossFit's elegant prescription for fitness and business. If you think Anthos could add some tools or products and make a better fitness company, we will not stop you guys from joining them. We'd love for you to leave.

I can't help but notice, however, the discrepancy in responses. With few exceptions, CrossFit Affiliate owners tend to think that outside intervention in their business is a horrible idea and a violation of CrossFit's covenant with its affiliates.

On the other hand, those who support Anthos' plan, such as Patrick and Steve, for the most part do not own CrossFit affiliates. There must be something about owning your own affiliate that makes you hyper-vigilant to the perils of outside intervention.

Lastly, think to yourselves, how would you have reacted if Greg Glassman had sold out to Anthos and left the affiliates behind? Would you have taken the side of Greg and venture capital against the 4,400 affiliates whose business models and independence were now at risk? Would you not accuse him of betraying all that he'd said and built?









Russell is 100% correct - those accusing CFHQ of being deceptive or withholding info and those thinking Anthos might have a process to make the affiliate system better and people who DO NOT OWN AFFILIATES. Sorry guys, you just don't have the same perspective, regardless of what you think.

I remember the post on the main page for the first CF Games. We arrived where we are due to Greg's leadership and an incredible amount of hard work form a very small staff of dedicated people at CFHQ. I expect most of you posting had no idea there were only a handful of people working for CFHQ even in 2009 and the majority worked for free for a long time because they loved CF and believed in their mission.

CrossFit has a certain “command climate” and I don’t want it altered. It’s naïve to think some outside entity with nothing invested in the organization is going to improve what we have or maintain it in any form that remotely resembles its current state.

If you own an affiliate or your own business, you understand and if you do not, then you can’t understand. The affiliate is a reflection of its owner’s personality, just like CFHQ is a reflection of Greg’s personality – command climate. You sink countless hours of sweat equity and capital into it. You worry; you work to constantly improve everything about your affiliate and yourself – equipment, coaches, programming, facility, etc. It’s not perfect but it is yours; the execution of your vision and the result of your hard work. They are your athletes; you know where they work, their kids, what movements they suck at, what previous injuries they have and it’s a community you built.

The thought that some outside entity is going to exert influence on your hard work is intolerable. It would be like someone coming into your house and replacing all your furniture and pictures with items they thought were more aesthetically pleasing. Anthos is detached, disinterested and only concerned about money. It doesn’t care that I am working to improve the fitness of my community, help better prepare local kids for life; both athletic and academic. Anthos won’t make extra money if I am sitting in on city council meetings on obesity in my community. Anthos won’t make extra money when I let visiting CrossFitters train for a week at my box for free.

Sorry, but if don’t own an affiliate, you just don’t get it. Usus doctrinam vincit – “experience wins over theory” was the motto of unit I commanded. Lots of arm chair quarterbacks will proffer advice with zero operational experience. That applies here as well. Affiliate owners are the voice of experience. This is a war on our way of life, our community that WE built and that CFHQ enabled us to build. We are on the front lines and we have everything to lose, if Anthos succeeds.

If you think of it in any other way you are naïve and detached and I refer you back to: Usus doctrinam vincit – “experience wins over theory”. I will fight this until the bitter end and I will follow CFHQ wherever this ends up. I know where my loyalty lies.

Don
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Old 08-11-2012, 12:12 AM   #438
Rob Brown
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Nathan Holmes View Post
Rob,

I think that's a bit over the edge. They aren't trying to buy a majority share of the company. They couldn't do what you described without Greg's concurance. I'm sure he would have left the company (and taken ALL but a few of the 4000+ affiliates with him) long before he would let it be watered down like that.

This is a big deal, but lets not go too far; "Crossfit" is just a name for what we do. "Fran" by any other name would still kick my butt.

-Nate
Agreed I was a little over the top, but it is not hard to imagine.
This will be too, so take it as a grain of salt.

I can picture it this way too... even if everyone moves to Crossfit 2.0 with Coach, it is not a back breaker for the 1.0 version. Really, I suspect they have little interest in the hard-core box crowd. What they really want to buy, is the few million untapped customers and millions already spent in branding. They want to lassoo the shooting star called 'CrossFit' and the masses who just watched the games and only know that CrossFit is better than anything else. They want people susceptible to Zumba, px90, and who use lulu lemon for daywear. They will get all the loose bux from all those people who would normally quit or cherry pick because they were too sore or it was too hard.

Us 2.0 Cf'ers will enjoy all that we do now under Coach. However the cameras and DVD bux will go to 1.0.

All we have to do now is to make sure a 2.0 athlete is the fittest person on earth.
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Old 08-11-2012, 04:20 AM   #439
Nathan Holmes
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Rob Brown View Post
Agreed I was a little over the top, but it is not hard to imagine.
This will be too, so take it as a grain of salt.

I can picture it this way too... even if everyone moves to Crossfit 2.0 with Coach, it is not a back breaker for the 1.0 version. Really, I suspect they have little interest in the hard-core box crowd. What they really want to buy, is the few million untapped customers and millions already spent in branding. They want to lassoo the shooting star called 'CrossFit' and the masses who just watched the games and only know that CrossFit is better than anything else. They want people susceptible to Zumba, px90, and who use lulu lemon for daywear. They will get all the loose bux from all those people who would normally quit or cherry pick because they were too sore or it was too hard.

Us 2.0 Cf'ers will enjoy all that we do now under Coach. However the cameras and DVD bux will go to 1.0.

All we have to do now is to make sure a 2.0 athlete is the fittest person on earth.
I can't disagree with anything you wrote. The only thing I can say is that I don't think it would be very hard for the 2.0 athlete would win the games. I can't imagine very many of the successful games competitors NOT going with Coach.
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Old 08-11-2012, 10:15 AM   #440
Steve Kane
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Donald Clarkson View Post

If you think of it in any other way you are naïve and detached and I refer you back to: Usus doctrinam vincit – “experience wins over theory”. I will fight this until the bitter end and I will follow CFHQ wherever this ends up. I know where my loyalty lies.

Don
Couldn't agree with you more. No one can run your affiliate better than you. But I bet a centralized team could run your back office more efficiently, host/program your website quicker for less money, and negotiate more favorable terms on equipment supplies. Leaving you more time to do the things you want, that you are good at, and that add value. That's all I'm saying. And it's not about the established affiliates, you guys will be fine. Its the 1500 or so that have been added in the last year and the 1500 that will be added this year/next that could benefit. Better affiliates - better Crossfit.
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