Stop Anthos from Taking over CrossFit

[Douglas Menikheim]

Originally Posted by Russell Greene

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 - I guess that answers my question, that Crossfit didn't have a right of first refusal, same for Coach G as well?

[Terry Dickman]

deleted comment

[Drew Nadeau]

Originally Posted by Russell Greene

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.

So, if she's rejected a better offer from crossfit inc, im guessing she just wants some sort of revenge against greg? I wonder if she realizes she could be ruining thousand's of affiliates owner's livelyhoods?

[Eric Griffith]

Russell -
Aside from following this thread, how do you propose we educate ourselves on this issue?

[Michael Petersen]

I have seen more than my fair share of estates mangled by divorce...hopefully there isn't some sort of desire by the NMEP to do lasting damage to CrossFit out of spite. Has Anthos has offered a financial package to the NMEP that has the potential to be worth more than CrossFit Inc's offer over a long period of time?

Is there language in the existing affiliate agreements that would give CrossFit Inc the ability to direct business practices as has been mentioned?

[Brendan McNamar]

Originally Posted by Michael Petersen

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.

Every seen a stock exchange in action? It happens every day. Not everyone would have to participate. Many of us would be happy for a chance to buy more then one share if some affiliates choose not to participate.

Originally Posted by Michael Petersen

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?

The lawyers and bankers who would get paid to do it. How do you think employee buy outs happen?

If the world is undervaluing HQ then a company like Anthos has an opportunity and will pursue it. Want Anthos to go away? Fully value HQ.

Does HQ have anyone who understands this stuff on staff? If not I understand it fairly well and my semi retired father understands it very well. Need help putting the deal together give us a call.

[Ewen Roth]

Originally Posted by Russell Greene

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.

"Educate yourself"? I don't own an affiliate but for crying out loud, shouldn't HQ be actively educating affiliate owners as we speak, instead of sending out half-baked messages from random staff members on Facebook or message boards?


There's a basic question that still hasn't been answered. If neither of the Russells can answer it, maybe they should pass the mic to someone who can:

- How can a non-managing equity partner change the way CF Inc. operates?

[Dale F. Saran]

Originally Posted by Ewen Roth

"Educate yourself"? I don't own an affiliate but for crying out loud, shouldn't HQ be actively educating affiliate owners as we speak, instead of sending out half-baked messages from random staff members on Facebook or message boards?


There's a basic question that still hasn't been answered. If neither of the Russells can answer it, maybe they should pass the mic to someone who can:

- How can a non-managing equity partner change the way CF Inc. operates?

Ewen - have you read the affiliate license agreement ever? Imagine if it got changed.

[Michael Petersen]

Originally Posted by Brendan McNamar

Every seen a stock exchange in action? It happens every day. Not everyone would have to participate. Many of us would be happy for a chance to buy more then one share if some affiliates choose not to participate.


The lawyers and bankers who would get paid to do it. How do you think employee buy outs happen?

If the world is undervaluing HQ then a company like Anthos has an opportunity and will pursue it. Want Anthos to go away? Fully value HQ.

Does HQ have anyone who understands this stuff on staff? If not I understand it fairly well and my semi retired father understands it very well. Need help putting the deal together give us a call.

Yep, I'm a stockbroker (in addition to other things). The problem is that I cannot imagine this NMEP having any interest in selling her shares on the micro level. Apparently HQ has offered her more money than Anthos, so there is another twist to the deal. I'm assuming that Anthos is offering a percentage of the ongoing profits. Under this hypothetical scenario, Anthos has convinced the NMEP that their stake is worth more in the future under a different business plan than would be realized under the existing business model. The people at Anthos appear to be pretty smart. I cannot imagine that they have made a pitch without doing their due diligence.

I think it would be a wonderful idea for affiliate owners to purchase a stake in HQ. In order to do that they would have to form an entity. This entity would have to have leadership in place and access to capital to make an offer with. The entity could sell shares to affiliate owners as they saw fit. As the NMEP has apparently been unwilling to sell to HQ, the new entity would have to field an offer that was in excess of whatever Anthos and HQ have offered. This is where the difficulty lies. Who leads? Who funds? Could all of this be created along the timeline that the NMEP has?

In an Employee Buyout scenario, the owner almost always wants to cash out and leave the business intact for the benefit of the employees. Without knowing the NMEP's motivations, it is hard to determine what courses of action are ultimately possible.

[Brendan McNamar]

I like to hear both sides. Let's see if you're willing to leave this up. Will say a lot about HQ's motives......

"To the Affiliates of CrossFit, Inc.,

It was over two and a half years ago that I filed for divorce. When I first filed, I had hoped that, despite the pending divorce, I could continue to work alongside Greg.

Greg and I created CrossFit from its infancy. We are equal co-owners of the stock. We ran the company together. I felt and still feel I have a lot to offer CrossFit, but Greg made it clear that, with the divorce, he no longer wanted my involvement. I approached several alternatives for CrossFit, as it has long been my contention that CrossFit is in need of more professional management, corporate structure and accountability. I have heard from many of you that you feel the same.

About three months ago, I learned that there was interest from an outside party to purchase my 50% interest in CrossFit. While the thought of a clean buy-out, without leveraging the company was very intriguing to me, I wanted to make sure that the new-co-owner would not only pay me a fair price but was the right fit for the company and its affiliates. After meeting with the principals of Anthos Capital, I am confident that Anthos is the right choice for both of those reasons.

Contrary to what I have read on the CrossFit blog, I am not selling control of the company to Anthos. I don’t have control to sell. Anthos will be co-equal owners with Greg, just as I am.

Additionally, Anthos has emphatically told me, after reading the most recent postings on the blog that they will not “force all CrossFit affiliates to morph from professional training facilities into supplement and equipment peddlers.” Nor will affiliates report to “a domineering bureaucracy that seeks to extract maximal profit while micro-managing every significant facet of their business.” If you go to their website, you will see that Anthos clearly states that they take a hands-off approach with companies they invest in. They have also told me their intent is to continue to have Greg run the company.

Greg and I started and then grew CrossFit together, making a lot of sacrifices to get the company to where it is today. I know and recognize that our affiliates worked very hard and made many sacrifices themselves and that their efforts contributed to our growth. It is my hope that everyone understands that I did not come to this decision lightly. I came to this decision after reviewing several options and considering what is in the best interests for all.

Sincerely,

Lauren Jenai Glassman"