Kosta Browne is SOLD!

[Daniel_Posner]

@J. Benjamin

Is this really a “sale” or just a change in investors?

If one owner sells to a new owner, it means it is a sale AND a change in investors.

[ToddFrench]

@Keith Levenberg

This seems to be an interesting demo of the cash value of Wine Spectator scores, since the only real “asset” changing hands here is a brand and a mailing list, right? (setting aside some contract rights of relatively nominal value) $40m - wow!

Wow, that’s true! I didn’t even think of that - there is only brand and mailing list. Is it possible they have sales of $40million a year? That’s typically what an asset-free type of setup would sell for - 1 times earnings, treated similarly to retail, which also has a brand and mailing list/customer base.

[Bud_Carey]

Love the wines. Love the winemaker. HATE the prices!!!

[J_Diven]

@Todd F r e n c h

Is it possible they have sales of $40million a year?

I don’t think so, unless they’ve managed to become a 45-50k case winery.
I would think that would make a serious dent in the mailing list though.

[M_Sai]

@Keith Levenberg

This seems to be an interesting demo of the cash value of Wine Spectator scores, since the only real “asset” changing hands here is a brand and a mailing list, right? (setting aside some contract rights of relatively nominal value) $40m - wow!

Is KB still using a custom crush facility?? I would think that they might have some tangible assets in the form of machinery, etc. Not to mention the value of a vintage or two still in the barrel.

[ToddFrench]

@M. Sai

@Keith Levenberg

This seems to be an interesting demo of the cash value of Wine Spectator scores, since the only real “asset” changing hands here is a brand and a mailing list, right? (setting aside some contract rights of relatively nominal value) $40m - wow!

Is KB still using a custom crush facility?? I would think that they might have some tangible assets in the form of machinery, etc. Not to mention the value of a vintage or two still in the barrel.

The vintage of a vintage or two in barrel is worth perhaps, what, $10m?

[Joe_Dulworth]

It is my understanding they own ZERO vineyards and LEASE their warehouse where they do the bulk of their work. In short, the new investors in essence bought the inventory and basically the goodwill which is where I’d lump the name and mailing list.

[gene_keenan]

@Joe Dulworth

It is my understanding they own ZERO vineyards and LEASE their warehouse where they do the bulk of their work. In short, the new investors in essence bought the inventory and basically the goodwill which is where I’d lump the name and mailing list.

true. but they do have contracts for those vineyards but I don’t know what the scope of those contracts are. Like the wines or not they have had a pretty stellar track record in regards to producing some very highly rated wines. Question I have is will we see more price increases or increased production or both?

[Russ_Williams]

Congrats to Michael and Dan as I assume they got a nice chunk of change. I wish the new investors luck becoming profitable on a $40MM investment in a winery with a brand and a mailing list built on WS scores, in a ‘new economy’ where I just don’t see huge demand for $80 pinot.

[krehberg]

@gene keenan

@Joe Dulworth

It is my understanding they own ZERO vineyards and LEASE their warehouse where they do the bulk of their work. In short, the new investors in essence bought the inventory and basically the goodwill which is where I’d lump the name and mailing list.

true. but they do have contracts for those vineyards but I don’t know what the scope of those contracts are. Like the wines or not they have had a pretty stellar track record in regards to producing some very highly rated wines. Question I have is will we see more price increases or increased production or both?

I think to recoup a $40MM investment, I’m guessing both. I would guess the production of the Appellations will need to be north of 10k cases each at $60/btl to really start showing an adequate return on investment and would not be surprised for the SVD’s to get close to the $100 level.

[Gordon_Fitz]

For 100 bucks, how many bottles of cherry coke and grain alcohol can I get to match the flavors of KB? OK, the oak dipper swizler stick will add a little too!

[Russ_Williams]

@Gordon Fitz

For 100 bucks, how many bottles of cherry coke and grain alcohol can I get to match the flavors of KB? OK, the oak dipper swizler stick will add a little too!

OUCH!!!

[Frank_Murray_III]

I am looking forward to the 2007s being released and being able to acquire some of them. I cannot afford to buy them all, given the pricing, but I do think the wines are special and excellent. Michael has been generous with his time and wine with me over the years, I wish them the best and hope for it in however this will impact them.

[Joe_Dulworth]

@gene keenan

true. but they do have contracts for those vineyards but I don’t know what the scope of those contracts are.

According to the WS article some of the contracts are written and some are hand shake agreements. Yeah, I’d plop down 40 million on a handshake only.

[Mike_Quetel]

@Joe Dulworth

@gene keenan

true. but they do have contracts for those vineyards but I don’t know what the scope of those contracts are.

According to the WS article some of the contracts are written and some are hand shake agreements. Yeah, I’d plop down 40 million on a handshake only.

From a financial perspective, would a vineyard contract be considered an asset, a liability or maybe both?

[Ken_V]

They never got good scores from Parker. How can they possibly be worth that much?

[Bud_Carey]

Ken… when it comes to pinot scores, people trust Laube more than Parker:

I know that I do.

[N_Weis]

@Mike Quetel

@Joe Dulworth

@gene keenan

true. but they do have contracts for those vineyards but I don’t know what the scope of those contracts are.

According to the WS article some of the contracts are written and some are hand shake agreements. Yeah, I’d plop down 40 million on a handshake only.

From a financial perspective, would a vineyard contract be considered an asset, a liability or maybe both?

Good question…my bet would be both. An unpaid liability like a ticket to a sporting event that hasn’t happened yet on the team’s balance sheet but also an asset in that it guarantees future supply.

I’m no accountant, though…and it would be tough to value as an asset, since there are uncertainties about vineyard yield (if the contract is for acreage) and wine yield from grapes which can vary pretty dramatically depending upon the year and specific winery.

[Richard_T_r_i_m_p_i]

@Bud Carey

Ken… when it comes to pinot scores, people trust Laube more than Parker: I know that I do.

Yipes! Scary but you’re probably right. Heaven forbid pinot lovers might venture far enough afield to try the advice of Rusty, Allen, or even David S.

RT

[Daniel_Posner]

Rusty Staub?