IN THIS EMAIL- My Dinner With Berkshire
- April: Balance and Brute Strength
- Podcast: Corey Crushed It
- DBE Energy: Not What I Expected
- More Bad News for Alcohol
- 3 Body Problem
- I was right.
DINNER WITH THE BOARD & CEO – A couple weeks back I was invited to a dinner with 4 of CrossFit’s Board of Directors (owners) and the CEO, Don Faul when they were in town for their quarterly Directors meeting. Don set the dinner up to introduce them to a CrossFit affiliate owner so that they could learn more about what it meant to be an owner. It was a special experience for all of us.
The Back Story: I was a little nervous prior to the dinner trying to think about what I’d say to the new owners. A little backstory might help: the founder of CrossFit, Greg Glassman, sold CrossFit to a Private Equity company, Berkshire Partners, in 2020 after a tumultuous few months of brutal social media pressure from the CrossFit community. Initially, the new CEO, Eric Roza, promised great things for CrossFit, but lingering pandemic closures, over spending and revenue declines created serious headaches for the CEO & new owners.
In 2022, Eric Roza stepped down and Don Faul was hired to revitalize the company and return the brand and affiliates to its leadership position in the fitness industry. Don and his team have made great strides in their efforts, but received a fair amount of criticism recently when they raised annual affiliation fees – the first increase in several years. CF also eliminated the “grandfather” fee protection for legacy affiliate owners – a move that raised the ire of many OGs. So, many owners and others have surmised that the Private Equity owners are primarily interested in a quick sale and profit from their investment in CrossFit.
My Dinner Observations: my long career in the investment management industry has made me very observant of others. At dinner, I noticed that ALL of the board members, mostly in their late 50’s/early 60’s, were very healthy, fit, and careful about their food selections. None drank alcohol. So, perhaps the investment in CrossFit was not entirely motivated by profit.
During dinner, I was hardly able to eat because of the succession of questions from the owners about my experiences as a CrossFit affiliate owner. They were especially impressed by the several “transformation stories” I told about our members and others within the CrossFit community. At one point, one of the Board members turned to the CEO and said: “we need to tell these stories to everyone.” Don glanced at me – and I think I saw him roll his eyes.. (we tell him this often). The board members are very smart, obviously accomplished, and keenly interested in the well-being of their investment, the affiliates and most importantly, our communities.
After the dinner, standing outside the restaurant, two of the Board thanked me for coming, and added that were very happy that their investment was helping so many people. This was a defining moment for me. Will they sell their stake and take a profit? Yes, that was known from the beginning. Will it happen tomorrow? No – the investors did not give any indication that they were in a hurry and are very comfortable with Don, his management team and the direction of the company. Most importantly, they are happy with what their investment is doing for others. That’s reassuring for me and for other owners.
Closing Words: Finally, the next day, I sent a thank you note to everyone for the dinner and great conversation and received several very sincere thank you’s and encouraging words in return, including this:
“Your journey with CrossFit is inspiring and makes us proud to be investors in this company.”
That’s all I need. |
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