Business broker says Ricky Nixon’s player-management business sold for a bargain

Ricky Nixon, the disgraced founder of AFL player-management company Flying Start, has sold his company for a song, a business broker says.

Flying Start has been sold to former Richmond president Clinton Casey and four other investors, for a reported $900,000.

According to the Herald Sun, it will be renamed Phoenix Management and run by former AFL players Scott Lucas and Rohan Smith.

Flying Start declined to comment on the sale this morning.

The company, founded in 1994 by the former Carlton, St Kilda and Hawthorn AFL player, dubs itself Australia’s leading football management agency.

Its sale follows the stripping of Nixon’s management licence after an investigation by David Galbally QC and the AFL Players’ Association.

The AFLPA revoked Nixon’s licence for two years, finding him guilty of an “inappropriate” relationship with a teenager who had posted nude photos of some St Kilda footballers, including Nixon’s client Nick Riewoldt. The Herald Sun indicated that highly regarded St Kilda captain might not sign on with the new owners.

David Fitzgerald, a business broker with Link in Queensland and St Kilda supporter, believes the reported sale price is a bargain, because it was sold quickly and under unusual circumstances.

“For a service business in a growth industry with an extremely strong stable established over many years, that is very cheap,” Fitzgerald says.

Fitzgerald says most player-management businesses would be sold privately and at the initiative of the buyer.

According to Fitzgerald, Flying Start has many things working in its favour: its high-calibre client list; the barriers to entry (because players are reluctant to sign with new companies); and the AFL’s good financial health, which then flows on to players’ salaries.

On the other hand, there would have been limited potential buyers with the cash, expertise and sway to retain key clients, he says.

Fitzgerald says a service company such as Flying Start would generally be valued using a discount cashflow projection and future maintainable earnings.

In this instance, the controversy was likely to have scuppered Flying Start’s ability to attract key players from the draft, so the new owners were likely emphasising their new ownership and name, and ensuring it doesn’t bleed players.

“Trust is the most important asset that a player-management group has,” Fitzgerald says.