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Skateboarding => USELESS WOODEN TOY BANTER => Topic started by: bradtheraddad on September 23, 2014, 12:50:08 PM
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http://www.jenkemmag.com/home/2014/09/23/the-history-of-world-industries-and-its-29-million-dollar-sale/?fb_action_ids=10152669253143168&fb_action_types=og.likes (http://www.jenkemmag.com/home/2014/09/23/the-history-of-world-industries-and-its-29-million-dollar-sale/?fb_action_ids=10152669253143168&fb_action_types=og.likes)
"I mean we had skaters like Kareem Campbell and Daewon Song on World Industries, the biggest names, but the logo boards were still selling at a much higher rate. They were in such high demand that we were able to raise the prices of the logo boards to the same price as our pro boards and we didn?t have to pay any royalties to the riders too." - on the flame boy/wet willie boards
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This documentary portrays the same story
http://www.youtube.com/watch?v=J-YOSTuhx0E
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Couldn't help but think of Stringer Bell when Drouillard at least appeared to be admitting to fraud during the sale of Big Brother:
Criminal Conspiracy Notes (http://www.youtube.com/watch?v=pBdGOrcUEg8#)
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That was a good read. I wonder how much money McKee made when World was sold, hopefully a couple of million too, since he created Flameboy, Devil Man and all those horrible cartoons. I always hated them, and consider this era the Golden Age of World Industries:
(http://www.skateboardingis.com/wp-content/uploads/2011/05/kareem_wi_bigbrother_no09_1994.jpg)
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'skater-owned'
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CFO sounds kind of sleazy.
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CFO sounds kind of sleazy.
he was the CFO for WORLD INDUSTRIES
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Good for them....I'm sure they looked at Novak, Powell and even Fausto and thought......'nahhhhhh......'
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can anyone find a photo of the "Fucked Up" jeans they sold? I'm really curious
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I know nothing about finance and buisness, but that whole sale of Big Brother thing sounds like it is, or should be, illegal?
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I know nothing about finance and buisness, but that whole sale of Big Brother thing sounds like it is, or should be, illegal?
Yeah, weird to say that kind of stuff publicly. Of course you're allowed to show your company in the best light possible when trying to sell, but trying to deceive the investors by manipulating the numbers to make the company seem more profitable and stable than it actually is, is definitely illegal.
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Observe how excited they were that they could sell non-endorsed decks at the same price as the PRO decks - no royalties to pay, bigger profits. This will sooner or later happen to Nike SB, who will move the successful models into the other lines and stop supporting their vast team. They just need to get a firm foothold in the skate scene and the new generations will continue to buy their product regardless of SB branding.
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CFO sounds kind of sleazy.
Valid.
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I know nothing about finance and buisness, but that whole sale of Big Brother thing sounds like it is, or should be, illegal?
Idk if all those dudes running World were doing tons of coke in those days but everytime theres a retelling of the history the story always changes, from what i remember Larry Flint got Big Brother in more of package deal cuz they wanted that magazine Blunt which was exactly like Big Brother but with snowboarding. World made them buy both magazines to get Blunt, not this whole thing of tricking them into buying it.
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Observe how excited they were that they could sell non-endorsed decks at the same price as the PRO decks - no royalties to pay, bigger profits. This will sooner or later happen to Nike SB, who will move the successful models into the other lines and stop supporting their vast team. They just need to get a firm foothold in the skate scene and the new generations will continue to buy their product regardless of SB branding.
already happened with the Janoski and the extremely simar team model
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And they did that with the koston 1s as well
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I know nothing about finance and buisness, but that whole sale of Big Brother thing sounds like it is, or should be, illegal?
Yeah, weird to say that kind of stuff publicly. Of course you're allowed to show your company in the best light possible when trying to sell, but trying to deceive the investors by manipulating the numbers to make the company seem more profitable and stable than it actually is, is definitely illegal.
DP and Ben - the sale is legal in this context. Company owners are expected and encouraged to show their firm's in the most positive light. Manipulating your earnings, while perhaps suspect, is not illegal if done under appropriate guidelines.
That is why auditors use a set of standards in determining if certain actions are appropriate to prevent owner malfeasance (as much as can be prevented).
For example, inventory management. Inventory is an asset, but it's not a liquid one, as in, it's not always easy to sell immediately for cash should the need arise. One expense that can reduce assets related to inventory are "Bad Debt Expense" meaning inventory you gave on credit is not being repaid. I loan 10 jeans to 10 shops at $1 each, but I know that one shop just isn't going to pay, I can't still fairly claim $100 on credit. I have to expense the $10 loss, so now I only have $90 on credit. Along with this, there is the "Allowance for Doubtful Accounts". This means that management doesn't know, but suspects, that some of the inventory on credit will not be repaid. This is a future estimate of the expense. So going forward, I say, "look I loaned $100, but realistically I may only get $95 back due to uncertainty".
The "Allowance for Doubtful Accounts" is of course an educated guess, but it reduces assets, and lower assets means lower owner's equity. If there was a long history of ADA being, say, 3% of credit sales, but in the most recent quarter it fell to 2.5%, then perhaps you could argue that there was cause to change the estimate being used to calculate the ADA. The effect of lowering ADA estimate will directly boost net income, as you reduced an expense. It will also raise Cash Flow.
A more pertinent example to the mag business is unearned revenue. When you pay Big Brother for a year's worth of ads, they are not allowed to book that revenue until they've delivered a full year of magazines with your ads. Why? Because revenue is only counted when the dollar amount is known AND delivery / exchange of good is made. After Jan, you still owe them 11 months worth of ads, so you can only book 1/12 of the yearly amount as revenue. This creates a liability -- unearned revenue, in the amount of the other 11 months.
This is pretty hard and fast rule, but you can pull forward the sales by, say, contracting with other vendors on either a commission basis for size and spacing or frequency of the ads, or some other reason that would allow you to potentially show the sales as earned revenue sooner.
The point is these are two of 100 hypothetical ways earnings can be managed. And since the company only sold for 600k (540k really) then something as small as a 50k reduction in expense could be the different between money pit and break even (that is speculation on my part, they don't break out the size of any other numbers).
The way I read it is that they did everything they could to try and cast the company in a more positive light, and auditors provided their assurance that it was acceptable (auditors bear no responsibility, but they do go in and double check the methods).
TLDR: It sounds "odd" but accounting is full and contingent upon educated guesses which at the end of the day opens to door to potential manipulation, but as long as you follow certain guidelines (ie, auditors approve, meets GAAP standards) then it is legal.
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oh, and I'll add -- companies always conduct due diligence, meaning LFP hired their own people to assess whatever it is they are buying (most likely, anyways). if there were material misstatements (actual fraud) then LFP would sue.
Saying, "oh, well they didn't sue, must have been legal" is not the right takeaway, it is possible there was something improper, but you can definitely infer that had you just paid any amount of money for anything under the pretense of fraud, that you would likely sue (and win) to get your money back.
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Observe how excited they were that they could sell non-endorsed decks at the same price as the PRO decks - no royalties to pay, bigger profits. This will sooner or later happen to Nike SB, who will move the successful models into the other lines and stop supporting their vast team. They just need to get a firm foothold in the skate scene and the new generations will continue to buy their product regardless of SB branding.
as if another perfectly good thread need be dragged into that shit. I think the percentage of threads that devolve into that tired debate eclipses SB's market share by this point.
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If the per board royalty was $2.00, was selling nothing but Wet Willy stuff that important to the bottom line? Isn't that around 4-5% more for owners?
After reading that interview a while I started picturing the "Corporate Guy" from Animal Chin. It's clear that World Ind. rode a pretty impressive wave but I didn't get the sense this guy really knows for sure the "whys" as to how it worked then and how it doesn't work now. He really seemed to be talking out of his ass on that front. It could be just a simple matter of number of skaters and number of companies competing for them but until someone shows real data it just seems like guessing.
As for his timing, that was impeccable.
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I know nothing about finance and buisness, but that whole sale of Big Brother thing sounds like it is, or should be, illegal?
Yeah the 600k I'm pretty sure included BLUNT magazine - it was a package deal.. he didn't really explain that too well, but yeah it was for BLUNT and BB..
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He also talks about the credit thing being such a forward thinking plus, when in reality it hurts a lot of skateshops because the reps pressure shops to keep their line of credit maxed out, and if all this doesn't sell super fast shops get burdoned under a bunch of debt, in which companies do like credit card companies and expand your line of credit and the cycle begins. Nike was super good at this cuz when they first got popular for all the SB dunks they forced shops to carry a bunch of bullshit like CHet Childress FC's, so the shops would kill it on the dunks then be stuck with a bunch Nike Angus shoes that no one wants. The credit line is great for World but i bet theres a bunch of shops still sitting under a pile of debt for getting products from companies that have been out of business for years, theres probably also a bunch of shops that are out of business cuz they got stuck with a bunch of Wet Willy, and Blind Reaper boards. After the glory days of World it became a sketchy corporate company just like any other, a lot of that was under Frank Messmans direction who i also suspect had a lot to do with the downfall of Blackbox.
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https://worldindustries.com/team/ -- shout out to @versacekid420 for making the world team (ANTHONY
SHETLER on the far right)
the shop page doesn't have any gear, just a 2 yr old video with 949 views called 'Sean Egan battles at The Edge skate park'
warehouseskateboards has 22 decks options with 16 different graphics -- https://www.warehouseskateboards.com/skateboard-decks#class=1d&pg=1&brand=WOR
ccs, tactics, and sw didn't have any.
last ig post was may 2022 -- https://www.instagram.com/p/Cd00tmPri1x
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This bump confuses me almost as much as the time I inhaled a bump of what I thought was meth that turned out to be K.