Interbrand values Royal College of Art at £57m

Interbrand has valued the Royal College of Art brand at £57m, in what is thought to be the first-ever brand valuation exercise for a higher education institute.

The valuation, according to RCA Helen Hamlyn Professor of Design Jeremy Myerson, forms part of a broader submission to the Higher Education Funding Council for England to ensure the college’s continued funding, while bolstering its capital fundraising project. This will finance the RCA’s new home for fine and applied arts in Battersea, expected to complete in 2013. ‘It’s been a robust financial exercise that shows how the RCA’s brand gives the college an economic leverage,’ says Myerson.

Myerson chose Interbrand for the project, on the strength of a longstanding relationship with Interbrand chief executive Rune Gustafson. Both share a mutual interest in the commercial value of creativity, according to Interbrand director of valuation Julian Dailly.

The task, which has taken about two months and comprised workshops with stakeholders, analysis of RCA data and competitor research, had to be adapted from Interbrand’s standard brand valuation method, due to the not-for-profit nature of the college, says Dailly.

‘In a nutshell, our standard methodology looks at value generated by a business taking profitability as a starting point, but with a not-for-profit organisation, we had to look at the value of interactions with stakeholders,’ he says.

‘The value proxy we used is based on “economic advantage” rather than profit. This refers to the revenues generated by the premium rate that international students are prepared to pay, against the costs, including that of staffing. The RCA is able to get high-quality teaching staff at a discounted rate, contributing to a higher economic advantage and more efficiency than most higher education institutes,’ says Dailly.

The assets that the RCA enjoys, according to Dailly, include the experience and reputation of its staff, the high quality of work produced by students and a prestigious location in London’s South Kensington.

Other factors taken into consideration include the diversification of courses offered, as well as the RCA’s geographical catchment, compared to its peers.

The brand valuation comes a week after the college’s announcement that the director of the Smithsonian Institute’s Cooper-Hewitt National Design Museum in New York, Paul Thompson, is to replace Sir Christopher Frayling in September 2009.

Thompson will lead the next phase of the RCA’s proposed Battersea campus.

Interbrand’s Valuations

• Interbrand has made about 5000 brand valuations

• It runs a Best Global Brand Value league table

• The most ‘challenging’ brand valuations are those of companies with extensive global capacity and those involved in complex mergers and acquisitions, says Interbrand director of valuation Julian Dailly

• Brands are valued on profit, while the Royal College of Art has been valued on its ‘economic advantage’

Latest articles