A licensing dispute between Virgin and US inter-city rail company Brightline made headlines on both sides of the Atlantic in March. The spat was sparked when Brightline – which had previously licensed the Virgin brand and operated as Virgin Trains USA on lines in California and Florida – announced that it planned to drop the Virgin name. In suing the US rail company for lost royalties, Virgin founder Richard Branson asked the court to “rule on the value of the Virgin brand”.
Coverage of the dispute shone a spotlight on brand valuation. The ability to measure this was deemed crucial for a host of business reasons: to gain a 360-degree insight into an enterprise’s worth; to measure a company’s health or its product offerings; to calculate licensing royalties; to determine potential reputational hits and damages in dispute scenarios; to underpin M&A decision making. The list goes on.
Formal brand valuations have remained outside mainstream corporate practice for far too long, with companies only really engaging in them for transactional reasons or to support a case. However, the landscape is shifting. There is now a clear competitive advantage for both corporate trademark professionals and their legal advisers to embrace valuation strategies and support those tasked with managing the brand balance sheet.
This report takes a deep dive into brand valuation, the reporting of intangibles and strategic best practice for brand leaders. As well as tracking recent developments in the industry and presenting a guide to the fundamentals of valuation practice, we focus in on key trends, the companies that own the most valuable brands and their financial performance. In addition, we provide a rundown of the most valuable brand acquisitions since 2000.
Elsewhere, we analyse the Brand Finance Global Intangible Finance Tracker index and issue this market leader’s clarion call for change in current reporting practices. We also present insight from INTA on cutting-edge issues in the brand valuation environment and how (and why) to make the transition from being a trademark practitioner specialist to a brand counsel generalist with a nuanced understanding of valuation and evaluation strategies.
Finally, we have cherry-picked a number of pieces from the World Trademark Review (WTR) archive, including exclusive interviews on the topic of brand valuation and financing, insight into best practice in tax reporting and guidance on handling brand acquisitions.
WTR would like to take this opportunity to thank Brand Finance, Charles River Associates, Markables and INTA for sharing their insights and expertise in this report.