Muhammad Ali, Forever 21, and Sports Illustrated are among the trademark brands and copyrighted material owned by Authentic Brands Group, which has filed for an initial public offering with the Securities & Exchange Board. Last year, Authentic Businesses made approximately $500 million in licensing fees from more than half a dozen retail and lifestyle brands, as well as the names and similarities of celebrities like Shaquille O’Neal, Julius Erving, Marilyn Monroe, and Elvis Presley.
Authentic Brands did not disclose the value or the amount of money it hopes to acquire in its IPO. Companies will usually file an initial disclosure without those details, then revise the prospectus when they move closer to selling.
ABG’s business strategy is “asset-light,” which means it owns only the brands and intellectual property and collects licencing payments from over 1,000 markets across the globe, including Under Armour for the rights to utilise images of boxing hero Ali in its marketing campaigns. Sports Illustrated was acquired by ABG in 2019 for $110 million mostly for its intellectual property. According to the report, ABG has spent $2.6 billion on brand acquisitions since CEO Jamie Salter launched the firm in 2010.
ABG reported a net income of $211 million on revenue of $489 million in 2020, indicating that the business strategy is extremely profitable. However, it is plagued with debt from its investment plan, with debts totalling $2.29 billion.
According to the filing, the IPO revenues will mostly be used to pay off loans. ABG’s lifestyle brands, including Tapout, Prince, Nine West, and Barneys New York, generate the majority of the company’s income (82 percent in 2020). The remaining 18% comes from the company’s media rights. Many renowned pop culture icons, such as golfer Greg Norman, Mexican singer Thalia Sodi, and jewellery designer Neal Lane, have patents, copyrights, songs, and trademarks.
“Most people look at SI and think about the iconic magazine. What they don’t see is the brand’s huge potential to grow horizontally: digital, sports gaming, event ticketing, and world-class immersive events,” Salter wrote in an introduction to the business included in the filing.
“A lot of sports players have big endorsements, but few players are brands. Shaq is absolutely a brand. When we partnered with Shaquille O’Neal, we worked with Shaq to define his brand values and created a long-term vision for his brand,” he added.
Investment firms BlackRock, General Atlantic, Leonard Green & Partners, Simon Property Group, and Lion Capital each control more than 5% of the company, according to a table in the report. The specific equity holdings have yet to be revealed.