Some people continue to live even after death?
They are present in hearts of million of followers. So the most valuable asset to a celebrity is the goodwill associate with their name and such goodwill, if properly managed, can be turned into profit gaining centers and celebrities can earn from their IPR. Best example being Mr. Mahendra Singh Dhoni. According to Forbes, Dhoni was the world’s highest paid celebrity last year, earning USD 8 million. And now by signing a three year deal with Rhiti sports Management, he has stolen the crown of endorsements from master blaster, breaking his record of the Rs.180 crore three year deal with sports management firm Iconic. Nike is known around the world for being one of the most iconic brands; it was recently ranked as the world’s 31st most valuable brand. Nike is also known for the consistent use of celebrities to endorse the brand. In fact one of the most successful collaborations between brand and a celebrity is that of Nike and Michael Jordan under which Nike launched a new brand variety called the Air Jordan line of sport shoes. Nike joined hands with ace golfer Tiger Woods’ to enter the golf category with its appeal, equipment and accessories.
As celebrity endorsements are gaining on the basis of goodwill of celebrity, so to guard against the risk that celebrity commercial value might be damaged by misconduct, endorsements contracts commonly include morality or moral clauses. These clauses permit the advertiser to end the endorsement agreement if the celebrity does something to tarnish his or her image of the corporate sponsor or its product.
Woods is the world’s richest, best known athlete, since turning pro in 1966, with his own 71 official PGA tour events, including 14 major championships, to his credit. His corporate sponsors included such well known brands as Nike, Gillette and AT and T. He made $ 110 million in 2008-2009 mostly from corporate endorsements. Woods brand image took a serious hit after he crashed his SUV into a fire hydrant in November 2009. With Tiger Woods sex scandal in news, Accenture is the first one to back off the endorsements. Even after losing endorsements post his sex scandals, Woods remains the highest paid athlete in the world. Michael Jordan was accused of gambling and even Sania Mirza lost her brand value after her marriage to Shoaib Malik. Vishwanathan Anand charges Rs.25 lakh per appearance. His association with NIIT is 12 years old and was reported to be worth Rs.5 crore when signed
What makes a celebrity different from an individual?
“A celebrity is a person who is well known for his or her well knowness.” The thread that seems to bind celebrities is that they are people who function to capture public attention regardless of what they did, or even if they did nothing at all. Like most businesses, celebrity businesses have both tangible and intangible assets. Tangible assets are physical in form and can be touched and seen. Intangible assets are long lived resources that lack physical substance but convey valuable rights and privileges to the business. Patents, customer lists, trademarks and goodwill are examples of intangible assets. Intangible assets are generally classified in two categories: identifiable and non-identifiable. Identifiable intangible assets are those that generate economic benefits and are subject to specific identification and have a discernable economic life. Intellectual property is a class of identifiable intangible assets that are protected by law from unauthorized exploitation by others. The most well known non- identifiable intangible asset or class of assets is goodwill. Goodwill is often defined as the expectancy of repeat patronage and is generally not exchangeable in the same way other identifiable assets are exchanged.
Goodwill owned by cinema celebrities is exploited by all brand managers. Endorsement is a channel of brand communication in which a celebrity acts as the brand’s spokesperson and certifies the brand’s claim and position by extending his/her personality, popularity, stature in the society or expertise in the field to the brand. The latter part of the 80’s saw the burgeoning of a new trend in India-brands being endorsed by celebrities. Probably, the first ad to cash in on star power in a strategic, long-term, mission statement kind of way was Lux soap. This brand has, perhaps as a result of endorsements, been among the top three in the country for much of its lifetime.
In recent times we have almost all big celebrities endorsing big brands and earning huge amount out of their face value. In the Indian context, it would not be presumptuous to state that celebrity endorsements can aggrandize the overall brand. We have numerous examples exemplifying this claim. A standard example here is Coke, which, till recently, didn’t use stars internationally. In fact, India was a first for them. The result was a ubiquitously appealing Aamir cheekily stating Thanda matlab Coca Cola. The recall value for Nakshatra advertising is only due to the sensuous Aishwarya. The Parker pen brand, which by itself commands equity, used Amitabh Bachchan to revitalize the brand in India.
When you hear the term intangible assets, do you think of copyrights, patents or trademarks? You aren’t wrong, of course, but the term in today’s information-based economy has taken on a much broader meaning. We’re all familiar with the tangible assets of our business: real estate, equipment, inventory, cash. These have a value on our books and are accounted for on our balance sheet. If yours is a business start up or service provider, a very high percentage of its value is likely to be in the form of intangible assets. Intangibles are given an arbitrary value at the time of ownership transfer, requests for capital and valuation for other purposes.
The term”business goodwill”is largely a function of the image your business has created in the marketplace. Whether a single entrepreneur or a company of hundreds, your reputation has value. It is based on the trust, respect and expectations your business activities have created. Your policies and your people are the drivers of this value. The more valuable your goodwill, the more it will be seen as a beacon in the marketplace.
How would you value your goodwill?
The significant difference between the price paid and the net accounting value of the assets is termed as ‘goodwill’, and is placed on the consolidated balance sheet of the acquiring company. In Indian buy-outs like Tata Steel-Corus, Tata Motors-Jaguar Land Rover, United Spirits, Whyte & Mackay and Hindalco-Novelis-their acquisition prices were way above their respective book values. That’s because the buyers did not just pay for assets minus liabilities, but also for ‘soft ‘ resources like brands, relationships with suppliers, distributors and customers, systems and product pipelines, a trained and
functional staff, among other things. In the world of business the importance of the intangible asset is clear for all to see. How much of the £11.5bn Kraft agreed to pay for Cadbury attributable to its buildings, plant, cash or investments and how much to Cadbury’s globally known brands and established
When Tata Motors bought Jaguar Land Rover from Ford, it certainly was not motivated to pay over £1bn for either an established flow of profits or the prospect of owning underinvested car plants in the West Midlands and Merseyside and a £600m pension deficit. Intangible certainly does not equate to unreal. At present, Indian firms account for goodwill as per Accounting Standards (AS) 26 and 28. When Indian standards converge with International Financial Reporting Standards (IFRS) 3, due from next year, generic goodwill accounting will stand abolished. IFRS 3 requires identifiable intangible assets to be recognised on the balance sheet of the acquiring entity. This is a significant change from most existing (non-US) national accounting standards. Further, IFRS 3 is more demanding than previous accounting standards. Goodwill and intangible assets with indefinite useful economic lives will need to be tested for ‘impairment’ (loss in value), at least annually. If goodwill assets are impaired, they have to be written down, and the loss has to be charged to the profit and loss account. In order to minimise the potential goodwill impairment writedowns, Indian companies need to embrace these standards in letter and in spirit. They can limit the exposure to goodwill write-downs by carrying out a due diligence of the intangible assets embedded in the lumpy goodwill, and by breaking it up into various categories, and accounting for them accordingly.
Goodwill of political leaders and parties can work wonders. Americans elected Barack Obama as President of the United States because they believed that as a man of goodwill he would reach beyond the false absolutes of race, ethnicity, gender, sexual orientation and religious belief or lack thereof, to name but a few discriminatory possibilities, to receive people in process as human beings first and foremost. They believed that as a man of goodwill he would reach beyond what I term false absolutes, the false absolutes of secular and religious ideologies, to engage in process of the reality. Similarly in India, Rahul Gandhi is seen as man of good will carrying a long legacy of Gandhi Family. Rahul Gandhi hails from a powerful political family of India and is the son of Sonia Gandhi, Congress President and wife of the late Rajiv Gandhi, former Prime Minister of India. Rahul’s great grand father Jawaharlal Nehru was one the founding members of the Congress party in independent India. Even though his mother entered active politics, Rahul did not show much interest until 2003. He slowly and steadily built his image as a youth force of the Congress party.
Rahul made his intentions to enter politics clear by making a goodwill visit to Pakistan to watch the two nations play cricket. In May 2004, he contested the elections and won a seat in the Lok Sabha by a huge margin. He started his political career from Amethi in Uttar Pradesh. His victory generated considerable media excitement and enthusiasm. The younger generation started looking up at him as a role model. Rahul Gandhi has been working steadily in building a strong image in the political scenario of Over the years India has seen many great leaders with strong goodwill like Jawaharlal Nehru, Lal Bahadur Shastri, Indira Gandhi, Atal Bihari Vajpayee and others, who, with their unwavering commitment, courage and inspirational leadership, helped youth of the nation to move in the right direction. However, at this juncture, India welcomed Rahul Gandhi for the confidence of youth and being the motivating factor that can set standards for them. the country. His steps are proving him to be a mature human being and are building confidence amongst his supporters that one day he will be the future of Indian politics. Rahul Gandhi almost single-handedly won more than 20 seats in Uttar Pradesh
and the Congress party a total of 204 seats in the Lok Sabha. His decision to go alone in the states of Bihar and Uttar Pradesh has proved to be very effective.
Rahul Gandhi has taken up Bihar as his ‘Battle zone’ .On his Bihar Campaign the youth icon visited Patna Women’s college driving the students crazy. Rahul, who visited the college for an interactive session with the girls, had quite an impact on them. Rahul is relying on the youth for Congress’s new membership drive -‘Team Bihar’ – to repeat the success achieved in UP. At the same time he tried to win over the confidence of the greats of Nitish Kumar, Jayalalita, Navin Patnaik and Mamta Banerjee by praising their works in their respective states. Over the years he has gained maturity and confidence and has gained a lot of popularity as well. In the years to come, the country will see Rahul as a young leader, on whom Indian youth is pinning all their hopes and aspirations.