Creative Industries Business Valuation

We consider the creative industries as including musicians, bands, artists, theatres, dance studios and the wide range of other businesses that support this sector.  This can include sound and lighting support, transport, artist management and many other traditional businesses.

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The creative and arts industries are not known for buying and selling businesses, as often the commercial arrangements are associated directly with the artists and is somewhat difficult to transition from one owner to the next.

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However even artists have a value that can be attached to the cash flows the artist, band or commercial arrangement generates.  It is just that these cash flows come with a high level of risk.

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The valuations are often required to support entity restructuring, entrance and exit of partners and investors, resolving commercial disputes and in some cases supporting transactions.

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Some of the issues that need to be considered in a business valuation in this sector include:

• Ongoing commission arrangements and degree of following that supports the commission.

• Legal agreements and ​arrangements.

• Royalty agreements and payments

• Recording patterns and cycles

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A creative industries business valuation will focus on the risk of the commercial arrangements and cash flows in order to arrive at an appropriate value.

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In many cases, the business valuation method used will follow net tangible assets where there is evidence that a commercial return is not generated.  The business valuation methods will also be aligned with the latest best practice IP valuation methods.

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