Hagerty to acquire 100 % of Broad Arrow Group

What isn't Hagerty buying these days?

 

Hagerty is metastasizing. I don’t see that as an especially good thing for enthusiasts.

 

A significant portion of Hagerty is owned by State Farm.

 

Even worse.

 

Have heard Pebble Beach Concours may be next.

 

Don’t know about that. But I wouldn’t be surprised to see them buy SCM magazine. Keith Martin has mostly recovered from his stroke, but…


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The little bird that told me isn't always right but he is often enough. I know from other sources something is going on.

Long as I keep getting invites to their big party I'm good.

 

Chatting with Bill Warner recently he hinted his next gig might be something with Pebble.

 

At dinner KM asked me what I thought about Cavallino magazine. I told him I didn’t have an opinion (which was true at the time). When I asked him why he wanted to know, he said he was thinking of buying it.


This was more than 20 years ago.

 

Sources had told me that multiple folks had looked at Cavallino but Barnes wanted an amount that could not be justified.

 

as a business/corporate lawyer in New York City for over forty years, I can affirm that more deals that would have been good for both parties are blown by greed than by all other causes.

 

Them ballet dancers are hard bargainers!


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The magazine was a money losing prop. I wish the new owners well, but my guess is they will not have much patience with the old format.


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I'm surprised that Broad Arrow is worth that much.

 

I guess they’re betting on future revenue streams. That seems like a big bet for a company that has shareholders and the SEC watching. Keep in mind that they didn’t pay cash.

 

I know with all the various agreements and structures, it can be hard to say, but Broad Arrow has approximately $60mm worth of cars going through their Monterrey sale, so they're likely to gross somewhere in the area of $10mm in sales fees. So with that, and the other sales on their schedule, it doesn't seem like a $100mm valuation is out of line.

Am I missing something?

 

I’m sure Hagerty looked at the numbers and made sense of them. I just would not have expected it. That 10mm in sales fees is a gross number. I bet there are real expenses that need to be netted out, not just the rent for the venue, the cost of advertising and the booze that will keep the wheels of commerce turning at auction time but all the commissions that they have to pay to the specialists who sourced the cars being auctioned. That last item has got to be significant. At the end what does Broad Arrow have that brings real value? It’s not a new way of doing business, great brand recognition or some amazing technology. It’s a bunch of people who know the right collectors and can get them to list or bid. These people need to be paid or they jump ship (as they just did)…

 

Ain’t life grand? You do an IPO and people buy your stock because they are betting on the Pass Line. You then run down to Kinkos and print up more funny paper and use it to buy companies, which brings more people to the betting table.

Whut a country!

Don’t misunderstand. I’m not knocking it. I’m jealous!


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Grump. Every party needs a pooper.


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Yes, it’s a relatively low barrier to entry. You’re quite right about expenses. I have the BA catalog and it’s huge. Production costs must be quite high. And I’m pretty sure most of those seven and eight figure cars have negotiated seller’s fees, not the card rate that mere sub-million dollar cars get. So gross revenues could be less than supposed.

I don’t really care what Hagerty paid and I’m sure they have competent consultants who advised them. But I am concerned that, what for many people in this forum has been a lifelong hobby and a passion, is being commoditized and monetized by a relatively small group of companies. I don’t see how that is to the benefit of individual enthusiasts. I can see it pushing many of us to the fringes, almost as spectators, rather than participants, in our favorite passtime.

 

Say goodnight, Gracie.

Our time has come and gone.


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This ^^ isn’t anything new.
I’ve been into this hobby quite passionately/seriously, one could say almost full-time, for 45+ years and commoditization and monetizing has always appeared being large part of it.
Why else would so many be into following perceived market/value trends, auction results, market analysis, blah, blah, blah ?
I believe most of those aren’t really true car enthusiasts, they’re more enamored by & exited about $$$/£££/etc figures and speculation surrounding the cars.