selling a business

We’ve been thinking lately of a favorite scene from 1978’s Heaven Can Wait , a Warren Beatty remake of a 1943 film, Here Comes Mr. Jordan. The film’s premise is this: a quarterback, Joe Pendleton (Warren Beatty,) for the L.A. Rams dies, but it’s not his time. It’s a mistake. Mr. Jordan (James Mason), a nebulous Heaven official, swaps Joe into the body of a multi-multi-millionaire. All Joe wants to do is play football. He decides to buy the Rams. The next scene is the shot below, it’s the owner of the Rams with his attorney.

Just a great movie moment, especially for attorneys who advise businesses. It’s funny and it makes a point. You don’t always know when you’re going to get an offer for your company. You can have a lot of plans for a lot of contingencies (especially if you work with us) but you may not have a plan for when a ‘ruthless bastard’ walks through your doors and makes what may seem like an outrageous offer.

The very act of receiving the offer sets off a series of ever widening issues. There are considerations of considerations. Employees, contracts, assets, agreements, retirement plans, it goes on and on and on.

Then, there’s valuation. A great offer is stunning, exciting, fulfilling … and cause for some wonder. As in “Why so much?”

So, what about selling the Rams for $67 million in 1978? With inflation, that $67 million was the equivalent of $251.5 million today. Not bad. The Rams moved to St.Louis, were bad, got good, won a Superbowl, got bad again, got really bad, moved back to Los Angeles. Where they are simply awful.  And, according to Forbes, currently valued at $2.9 billion. That’s billion with a ‘B’.

Not being ready to handle a sudden offer didn’t work out so well for the Rams’ movie owner.