Sitting Down with Our Industry Experts: Sydney Richards

At VMG Health, we’re dedicated to sharing our knowledge. Our experts present at in-person conferences and virtual webinars to bring you the latest compliance, strategy, and transaction insight. Sit down with our in-house experts in this blog series, where we unpack the five key takeaways from our latest speaking engagements.

1. Can you provide a high-level overview of what you spoke about at AHLA’s webinar, “University Brand Value and Health Care Transactions”?

My portion of the presentation was about the valuation of academic healthcare brands. I talked through different valuation methodologies, which are the income cost and market approach, by discussing the specifics related to brand valuation. Additionally, I spoke about the key things to consider in a brand valuation or in a transaction involving a brand, like how to structure the payment—whether it’s through a variable or fixed license rate—and some of the pros and cons to different affiliation structures.

2. What do you think the audience was the most surprised to learn from your presentation?

In academic brand valuations, the owners of the academic brands tend to think their brand is extremely valuable. However, from an actual fair market value transaction perspective, the value of that brand is based on the licensee’s return, even if the brand is powerful and may drive allocations higher. If the licensee can’t make a monetary return on it, there won’t be a huge value that they have to pay. Otherwise, they’d be negative.

3. How do you think your presentation helped healthcare leaders better prepare for challenges? 

Leaders can look for opportunities with this knowledge. Brands are not a common part of a joint venture arrangement. Adding a health system’s brand to a joint venture may result in an additional return or credit for something that the system is contributing to the joint venture. Historically, leaders may not have valued brands, but they can.

4. What resources would you suggest for those interested in learning more? 

The blog, Healthcare Brand Valuation: Purpose, Strategy, and FMV Implications, is a great supplemental resource for those looking to learn more about incorporating brand in healthcare transactions. Additionally, another article is coming to the VMG Health website soon, and it will focus on brand valuation. Watch our site for that upcoming content.  

5. If someone takes only one message from your presentation, what would you want it to be?  

Brands can and should be considered, and possibly included, in healthcare transactions.

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