As skateboarding’s most-recognized dealmaker, Rob Dyrdek has built his career on the risk of embracing different kinds of risk. A Jackass for the CNBC set, Dyrdek is as comfortable negotiating his homeboys’ contract terms from beneath a Motel 6 hangover as he is nollie frontside nosesliding to fakie or cooly inhaling intoxicants from colorful balloons at a European rave event. Among those who invest their business expense money in gas station trinkets and accept automobiles as payment, Dyrdek’s business sense is high lore, which only added to the shock following his premature exaltation this week that he would take ownership of the hardgoods concern that has employed him since he was a tyke.
Dyrdek surely knows that dealmaking of any kind is a gamble, yet chose to break a cardinal rule of M&A and show his hand to his opponent — the snurfer lord Jake Burton — by announcing not only the advanced stages of their deal talks but vowing to keep the beloved Ohio memory-screener under his financial protection forevermore, implying that profits and losses are but a passing fancy on the wind that take a back seat to his emotional connection to the Alien Workshop. Which is understandable and even worthy of praise from fans such as this weblogging site that bore with some of the at-times questionable decisions re: team and otherwise over the past 10 years, but Dyrdek’s business sense oughtta be reptilian enough at this point not to let something like love enter the picture when you’re trying to bend your trading counterparty over the table.
The deal confuses me. Few details are out there, because maybe they have yet to all be determined. Let’s assume Dyrdek buys DNA Distribution in full from Burton. He gets AWS, Habitat, Reflex bearings, Habitat shoes. I would think Burton keeps Gravis’ IVSK8 effort. For one thing I wonder why Burton would sell after acquiring the AWS business just four years ago. Maybe Burton is looking to trim its balance sheet, as they’re rumored to also be trying to unload a surfboard company also. Decks and wheels are known not to be tremendous moneymakers and the t-shirts/hats/etc business seems as flooded as ever. What I don’t get is how Dyrdek would be able to run it more profitably as a standalone company, since you would assume that under the Burton umbrella AWS could get better deals on materials like shirts and pants and whatnot since Burton already buys a lot of that stuff for its own purposes. Maybe he has plans to integrate his Rogue Status thing there, or realign AWS with DC, by way of Habitat shoes. DC’s new advertising person would be interested in such a move no doubt.
The most likely scenario to me seems like Dyrdek becoming majority-owner with Burton keeping a stake, since that way maybe the two companies could maintain their ties in terms of volume discounts on raw goods, stocking DNA and perhaps other Dyrdek products in Burton stores, some skateboard-world cred for Burton, etc. Long-term I’m not sure whether such a deal’s a positive in terms of DNA, or at least Alien, maintaining the weird and “separate” vibe that made it seem to cut deeper and matter more than your typical deck and urethane purveyour. You’d like to think that Dyrdek the actual dude stands somewhat apart from the MTV and Street League character, and that he knows when to leave shit well enough alone. I think he trusts Carter/Hill/Castrucci.
Tags: Alex is the Answer, Alien Workshop, Barbarians At The Gate the book rather than the Foundation video, DCshoecoUSA, exalt the new god, Habitat, investment banking, Jake Burton, league tables, mergers & acquisitions, risk arbitrage, Rob Dyrdek, snowboards, snurfin bird, special situtations, WSJ