Sevan Matossian (00:00):
Do you need anything? Did you get it? Bam. We’re live. Did you get a drink or you got your coffee? Your iced tea.
Greg Glassman (00:05):
I got my tea going. Yep.
Sevan Matossian (00:07):
Dang, you’re set. Good morning. Good to see you.
Greg Glassman (00:11):
How are you man?
Sevan Matossian (00:12):
Dude, I’m pumped. No matter what. I keep thinking I need more sleep, but then I go to bed earlier, but I’m getting worse sleep. The longer I’m in bed, the more I toss and turn. I’m like an old dude. Now
Greg Glassman (00:24):
You wake up. I remember
Sevan Matossian (00:26):
One time, like 15 years ago, you said some joke to me about like, Hey, old people always talk about this and this. I can’t remember what they were. Maybe it was like the weather and how they sleep. And I think those are the two conversations I had with my wife this morning. I’m like, oh, it’s raining again. Damn. My back’s tweaked from last night’s sleep. I’m like, fuck. Can I hear the echo of your voice being like, oh shit. That is what old people talk about. Hey, we’re having a straight legit winter in California. A second one in a row, kind of cool, right?
Greg Glassman (00:56):
This is the winter.
Sevan Matossian (00:58):
I mean, yeah, it’s rain. It’s better than no rain, right? We have rain. It’s cool. It’s fun.
Greg Glassman (01:05):
The gnarly unseasonal kind of rain that they got in southern California came from down south.
Sevan Matossian (01:13):
When was that just a few months ago or
Greg Glassman (01:16):
Months ago? No, like a month ago. The gnarly raining in Southern California in San Luis Obispo Central Coast.
Sevan Matossian (01:24):
What month are we in right now? Oh, December, January. Okay. Oh yeah. January, January, January. And when is normally our rainy month is February.
Greg Glassman (01:35):
Yeah, I think so.
Sevan Matossian (01:36):
Would you stay?
Greg Glassman (01:36):
I don’t know. I’m not old enough to be a weather expert.
Sevan Matossian (01:41):
Good. I like that. Plead the
Greg Glassman (01:44):
Look. I moved to Santa Cruz in January 25th, 1995 and it rained two days out of three all the way into chin.
Sevan Matossian (01:53):
I remember that year
Greg Glassman (01:56):
It was rough.
Sevan Matossian (01:59):
And then last year, besides that year was our rainiest year of fucking alt that I ever remember. Besides that last year was, I mean, it rained for like two months straight. It was great though. It was great. I loved it.
Greg Glassman (02:12):
Yeah. I’m not complaining.
Sevan Matossian (02:14):
Yeah. Especially, I mean, maybe not you as much as me. Well, I wonder every time the rain it rains. I just imagine my Well filling, even though I don’t know if it works like that, but that’s just where I go. I just imagine my well filling and I just love that.
Greg Glassman (02:31):
Yeah, I was thinking the groundwater as well.
Sevan Matossian (02:35):
And you have two wells, right? You have an ag well and a regular Well, yeah. You’re stoked. Yep. And your ag well ended up being cleaner than your house water? Well,
Greg Glassman (02:44):
They’re both really good.
Sevan Matossian (02:46):
What’s the difference between the two?
Greg Glassman (02:50):
I forget.
Sevan Matossian (02:52):
I don’t, I wish I had an ag. Well, I think what happened is, is Greg has enough fruit trees, food producing trees on the property where you can apply for an ag Well, but I don’t think they’re actually dug different, but I think then they dug his ag well and then I think they told him, Hey dude, your water from your ag well might even be cleaner than your house water. He lives in a good spot. No one’s upstream from you. Live in a great, fuck. You live in a great spot.
Greg Glassman (03:18):
Yeah. There’s less concerns about the water. I’m trying to talk like a plumber, but there’s less concerns about where all the water goes and the ag. Well, from the holding tank, it only goes to sprinklers. And so you don’t run the chance of contaminating anything.
Caleb Beaver (03:40):
So it’s not like running two pipes in the house or anything like that. It’s just straight to the ground.
Greg Glassman (03:46):
Cool.
Sevan Matossian (03:48):
What is this? Oh, whoa. That didn’t take long at all. Hold on a second. I don’t even know if I have the phone set up yet. Hold on. Give me one second. Wow, that was fast. I did something stupid this morning. I carried one of my kids. I should never do that until I’ve been awake for a couple hours. I moved Avi from his bed. He asked me if I’d carry him. Fuck my backup already more old person had
Greg Glassman (04:15):
Hailey bring him over here and play with Brett.
Sevan Matossian (04:18):
I should do that. Is he awake?
Greg Glassman (04:20):
Yeah.
Sevan Matossian (04:21):
Caller. Hi. Are you there?
Greg Glassman (04:23):
Yeah.
Sevan Matossian (04:24):
Hi. Hey, what’s up? Good morning.
Greg Glassman (04:26):
Good morning. My name is Frank. I’m an affiliate owner from Monterey, California and we’ve spoken in the past regarding the CrossFit affiliate network and just hoping to chat with Greg and get some feedback.
Sevan Matossian (04:39):
Dang. Just straight into it this morning. Awesome. Are you at the gym now, Frank?
Greg Glassman (04:45):
Hi, good morning, Greg. Yeah, I am. Normally, I have a client this time, but he called in a little under the weather today, so I was lucky that it happened today just because I wanted to call in.
Sevan Matossian (04:57):
Okay. Before you ask your question, let me do some old person talk with you. How’s your back?
Greg Glassman (05:02):
I had a strain, but I’ve actually been doing an inversion table and it’s been fantastic.
Sevan Matossian (05:08):
I bought one of those, had to throw that away. It hurt me more. And how’s the weather? You’re You’re close. You’re closer to Greg than to me. You’re five miles closer to Greg than to me. But you got rain there too.
Greg Glassman (05:19):
Yeah, a little wet. Pretty normal for this time of year. I think
Sevan Matossian (05:23):
Greg was just telling me yesterday that it would take 12 minutes for us to get from the Santa Cruz harbor to your harbor there in Monterey on his boat.
Greg Glassman (05:33):
Ah, okay. I was going to say driving probably a little longer than that, but not far.
Sevan Matossian (05:37):
Yeah,
Greg Glassman (05:39):
Yeah. We’ll come see you, Frank. Yeah, I’d love that. We’ve met before we, we’ve been in the same space, but I don’t know if we ever got introduced. I was at the Broken Science Initiative event that was this past summer in and really enjoyed it. And actually that’s kind of relevant to the bigger conversation or what I was calling in about because that’s kind of where the Crossroad affiliate network or collective and really I should say, well anyway, that’s where the conversation somewhat started with some other affiliate owners there at that event.
Sevan Matossian (06:17):
The one at the ranch? Yep. Okay, cool. Alright. Alright. And you started that started that Instagram account?
Greg Glassman (06:26):
I did. That’s correct.
Sevan Matossian (06:29):
And why did you start it?
Greg Glassman (06:32):
Well, so yeah, so I think the story largely goes with when Greg sold the company and I had the thought to myself of what a damn shame that we didn’t as affiliate owners, we weren’t organized enough to collectively get together and buy it. And really, affiliate owners should be the ones I think who own it. And then when we were at the ranch, I was discussing, like I said, with some of their affiliate owners and kind of mentioned that same thing. We’re kind of commiserating about some of the decisions that were made by HQ prior to the sale and that we were concerned about how things were being run and the role of private equity in those decisions. And again, I brought up, I said, why didn’t we get together and what a damn shame we didn’t. And at some point, one of the other affiliate owners posted something saying to the effect of, it’s time for affiliate owners to organize.
(07:35):
And I responded back and I said, Hey, yeah, I’ve been thinking about this since our conversation and I’m all on board. Let’s do it. And I figured that Instagram, well not perfect was a good platform to start to get a message out and try to rally affiliate owners. And it’s been challenging to try to get 10,000 plus affiliate owners on board. But that’s kind of what I’m trying to do and what we do with it, I don’t exactly know, but I think one of the solutions may need to be looking at at least being prepared to buy CrossFit if the current owners are prepared to sell it at some point.
Sevan Matossian (08:16):
Just to put something in perspective,
(08:20):
I live on a road that I didn’t know was a private road and there’s 24 residents on it and they’re trying to put together a group to take care of the road and the lady who’s in charge of it can’t get any cooperation from people like me. I don’t want to go to meetings. I don’t really want to respond to emails. I just want someone to tell me how much I have to pay and leave me alone. I got my own life. I’m doing my own shit. And so 10,000 sounds crazy ambitious to me, you know what I mean? Just because I think that there’s probably 8,000 gyms that just don’t even want to read the paperwork, think about it, talk about it. You know what I mean? Yeah. I’m not poo-pooing on your idea at all. I’m just thinking just strictly from a practical point of view, like holy shit, I mean hundred, those 1200 followers you have think they’re mostly affiliates.
Greg Glassman (09:07):
Yeah, I honestly don’t know. I think it could be affiliates and then the gym owner follow with their personal account and the gym account. Some may just be, I’ve had one guy who he was just a CrossFitter and he wanted, his brother I think was an affiliate owner and he said, I want to be involved. I want to help out. Lemme know what I want to do or what I can do to help.
Sevan Matossian (09:29):
And the reason why you want so many is then that would’ve reduced the cost of the gym. Do you think of this group as being ready, all 10,000 of them being poised so that if the company ever goes for sale, they’re ready to buy it? Or do you see it more as they make an offer on the company or either?
Greg Glassman (09:45):
Yeah, I think both. I mean, I think one of the other things that I kind really like in terms of the idea is the Green Bay Packers is a professional football team and they were in a small town and didn’t really have the funding to compete with big cities. And so a bunch of guys got together and made it a publicly owned company and sold shares to fund the, fund, the company to fund the Green Bay Packers. And so I think there’s lots of different ways to do the funding, but I think ultimately, yeah, there needs to be some amount of affiliate owners on board. It may be that the equity, private equity comes to the realization that they don’t know how to make it profitable. I guess I would suggest that in my opinion, the fee increase was a result of that. We don’t know how to make it profitable other than to increase fees. And if everybody just pays it, I think it’s just going to happen again. I think they’re going to increase their fees again and they’re just going to keep doing that. I don’t know if they have a good understanding of how to do this as a for-profit model. And I think Greg has mentioned running it as a for-profit businesses can be challenging and certainly create some conflicts of interest, I think.
Sevan Matossian (11:05):
So at the end of the day, the net gain is get this group together, they can spend the money more efficiently and more effectively than the current owners. Because I guess that would be the big picture, correct?
Greg Glassman (11:18):
Yeah. I mean, I think affiliate owners know what affiliates need, and I think Greg did a great job of articulating what he thought the four points were that headquarters should be doing. I guess as an affiliate owner, I have some ideas of what I’d like to see in addition to that, but ultimately I think it should be in the hands of the affiliate owners’. Tower fees are spent and affiliate donors know best how to do that.
Sevan Matossian (11:49):
Eaton Beaver, good morning. But you’re right. Sorry, go ahead.
Greg Glassman (11:52):
But I mean, I think plenty of affiliate owners just want to, are busy and enough running their business. They don’t want to be involved, but I think at some point, if you’re not involved, you’re going to, the powers that be will kind of manipulate that. And so I think you have to be willing to push back or you’re just going to get steamrolled. I mean, what happens if affiliate fees go up to 10,000? Right? Are you going to push back at that point?
Sevan Matossian (12:24):
I saw the other day, by the way, someone sent me the invoice of F 45. I don’t know what the initial buy-in, but their monthly fee for F 45 is 1500 a month. There’s no point to what I’m saying except sharing that information. Someone shared me an invoice from their Jim Cave Astro. It would be $20,000 per affiliate at 10,000 affiliates to raise $200 million.
Greg Glassman (12:47):
Yeah, I mean, I think there’s a variety of variables here. I think if you’re willing to pay them what they paid for it, and we assume they paid 200 million. Great. I’ve also heard that the NSCA lawsuit was settled. Again, I don’t know, this is a rumor for a hundred million and where did that money go? It doesn’t seem like it went to countering the message or the narrative that was put out by that study. And I still hear regularly when I go out in public that people won’t come into my gym because, and they don’t know anything about my gym other than that. It’s across that gym and the first thing I hear is, I can’t work out with you. I’m going to get injured. And so what is CrossFit doing to counter that narrative? And I heard Don the town hall acknowledge that as a problem with the brand, but it’s been four years since they bought the company, and I haven’t seen anything done to counter that narrative. And so why do I assume now? And then you raised the fees by $1,500, and why should I assume that that money’s going to go to countering that narrative versus just the profits for the investors?
(14:05):
Frank, have you looked at who’s behind the occupational licensure bill that’s ramping up for California?
(14:14):
No. I mean, this effort alone to organize affiliates is more time than I have. I mean, I’m a father and a gym owner, and I, I guess I would look to say that that’s exactly, like you say, that’s something HQ should be doing and keeping us in the loop on what’s going on and preventing it and fighting it. And I think Dave Castro on his recent weekend review suggested that they were keeping an eye on it. And I don’t, I’m skeptical at best. Yeah, it’s not the kind of thing, you keep an eye. It needs to be fought and someone needs to make the investment and find out who’s behind it. And then there’ll be some opportunities to speak at public hearings in Sacramento. And we have effectively stopped those before in Massachusetts and elsewhere by bringing articulate affiliate owners and lobbyists and lawyers to the meeting to talk. And my suspicion is that there’s nothing like that going on. And in fact, I would even venture to guess that there’s been agreement for the mothership not to interfere with this project, I would assume.
Sevan Matossian (15:34):
Assume that’s
Greg Glassman (15:36):
Part of the settlement. Yeah.
Sevan Matossian (15:38):
Wow.
Greg Glassman (15:39):
This is the very thing about which they have promised to remain silent. This relates exactly to the settlement.
Sevan Matossian (15:46):
Boy, that’s scary. Hey, just two things I’d like to add in there. On the weekend review yesterday, Dave did acknowledge that the licensure bill is on their radar at hq. And also, not only did
Greg Glassman (16:01):
They, we put it there, it’s still not saying anything
Sevan Matossian (16:07):
Who Dave
Greg Glassman (16:08):
Taylor Swift’s on my radar too, but I clearly didn’t give a fuck about it.
Sevan Matossian (16:12):
Right, right, right. Okay, fair enough. Fair enough. She’s a
Greg Glassman (16:14):
Billionaire, Greg. Yeah,
Sevan Matossian (16:18):
Lemme tell
Greg Glassman (16:18):
More. They don’t care at all and it’s on their radar.
Sevan Matossian (16:23):
Let me throw this out there too. They not only sold, they bought the company, but then they also, like you said, they got money from the NSCA settlement, what we presume, but also they had a second round of fundraising, so they got more investors. I don’t know how much it was, 20 million, 30 million, 50 million, a hundred million. But they did another round of investing and they collected a shitload of more money.
Greg Glassman (16:53):
I’d heard the figure at some point.
Sevan Matossian (16:55):
Okay.
Greg Glassman (16:56):
I guess I’ll suggest this is ultimately what it comes down to or part of how much it’s going to cost per affiliate owner. You’ve got two kind of major variables, right? One is how many affiliates are willing to go in and buy it and how much they’re willing to sell it for versus what we’re willing to pay for it. And I guess this is where maybe I would ask Greg’s thoughts. I mean, you had suggested you were in fear of affiliate owners unionizing. What role did that play in you deciding to sell when there was the whole, I guess, pushback and depending, I have feelings about that whole situation where you, again, I don’t know, was affiliate owners pushing back on that Floyd 19 tweet? Was that motivation for you to sell there enough affiliates? I’ve heard it suggested by, I think it was Dave Castro, that there wasn’t that many affiliates and it wouldn’t be relative, but my thought is if 10,000 of the affiliates express dissatisfaction with how things are being run as private equity, I would think, oh, I’m in trouble. I better cash out and get whatever back I can on my investment. I can Now, if 500 affiliate owners come and say, Hey, we’re not happy, they’re going to say, yeah, we figured some amount would not be happy and that we’re willing to take that hit.
(18:23):
How many affiliates would it take before private equity says, yeah, we need to sell this thing quickly. I don’t know that it would force a sale, but I think you could maybe even more importantly and better force ’em to listen. I think a thousand affiliates could do that. But see, I would also, we we’re already past the point where, for me, for me, the cost has exceeded the potential value in the affiliate proposition. And so I think $10,000 affiliate fees is absurd. I is absurd. I don’t see any possible way to recoup that in what I’m getting from the mothership. But again, I got cornered here. I mean, for me, I had to come to terms with my own value system and it is what is it that would keep me in the affiliation? And it would be those things that you could do for me that I couldn’t do for myself. And it would look like the continuing ed validation litigation and legislation in those spaces. And there’s even an attitude of fighting in that, a strength in that I find super compelling. And that’s evaporated. It’s evaporated. There’s
Sevan Matossian (19:44):
No one at the point that you with,
Greg Glassman (19:46):
So I’m not sure what it’s worth anymore.
Sevan Matossian (19:49):
Well, that’s what I was going to say. At the point you have a thousand, you could just change the name, right, Frank, you could just be like, yeah, at that point you don’t have to buy anything. Right. That’s another thing I was thinking. Yeah.
Greg Glassman (19:57):
Franken. Franken fit. Yeah, I Joy joined. I think a lot of people are cheerleading around Glassman Fit maybe once the non-compete ends, but I don’t know if a thousand people, and I think the problem is a lot of gym owners still correlate the brand CrossFit regardless of what’s happening on the backend. There’s still a public perception that the CrossFit brand, it is, right? The brand is associated with the methodology. I love the methodology. I love the community and largely like what happens at HQ and fighting over licensure and NSCA lawsuit, most people in the public don’t know that and they don’t base their decision to come in or not come into Crossroad Gym based on those high level things. I guess for me, and I think for some gym owners, I don’t know how many, it is a principled thing. It is, what are my fees going towards? Are they going towards the mission of health and fitness and solving the world’s most vexing problem? And I think at some point, HQ could be eroding a brand by getting sponsorships from Monster Energy. And so at what point does that continue to be the case? If HQ isn’t doing things to promote the brand in a positive way,
(21:28):
Frank, this bill is going to pass this bill in California is going to pass, and it’s going to mandate a certification that you don’t have. It’s going to pass. I just require a certification that you don’t have. It’s not going to recognize yours. And there’s going to be some, and I would organize maybe around fighting that alone, and I would help with that if you guys, if you go that way, I think most affiliate owners, most affiliate owners would struggle, I think to leave the brand. And maybe they don’t have to leave crosser, they can still fight for the licensure thing. For me, it’s all of those things and not a single one. I think most gym owners are just, they want the brand CrossFit because of the association with the methodology in the community that they love.
(22:37):
So yeah, I don’t know, maybe a thousand is a lot, I think, but I don’t have the reputation of where people are going to get rallied behind Frankfurt. I think I get messages from a lot of people, and I see a lot of post saying, Hey, if Greg started something, once the non-compete ends, I would be all in. I’m just one jimin in. I don’t think people would rally behind that. I think there was even some movements when Greg was looking to sell or whatever happened there around, Hey, let’s rally around community fitness. Let’s rally around mayhem. A couple of different businesses said programming gyms said, let me, let’s make Mayhem affiliates and things like that. And I don’t think it took off because there wasn’t that same committee or public perception of the brand as with CrossFit
Sevan Matossian (23:35):
In that state of the industry report that Cooper put out was 80. I know it was nine months ago, but 87% of the CrossFit gyms were happy. There
Greg Glassman (23:45):
Was also,
Sevan Matossian (23:46):
Go ahead.
Greg Glassman (23:46):
There was also the write-in of it was that write-in where they wrote in Glassman,
Sevan Matossian (23:50):
Right? Yeah. That a big percentage too. Right, right. That was weird. Yeah, you’re right. You’re right. I mean, clearly Greg’s going to have a special not happy, but yeah, clearly Greg’s going to have a special place for all these people.
Greg Glassman (24:03):
Frank, sometime in the next month or two. Let’s meet for lunch in Watsonville. Take care of my favorite taco clothes. Okay. Yeah, I’d love that. I don’t have easy answers for you, sir, but I can tell you, having fought on the occupational licensure front, when the NSCA suit was settled with the promise of the strictest of confidentiality, Jeff Kane sent me a little missive to where he claimed that the CrossFit chain would be illegal in three to five years now. And holy cow. I mean he called that. Exactly. That’s exactly where this is headed. And I see an emergency there. My response to this before we had Russ Green, Russ Berger, Emily Kaplan, and Brett, the lobbyist that we purchased from Podesta plus the cloud of the entire Podesta organization and a bevy of attorneys that you could fill a dance floor with. And so at millions of dollars of expense in four or five years, we dodged a bullet and got occupational licensure rescinded in the District of Columbia, in DC, in the nation’s capital.
(25:32):
And that was an all hands on deck major effort and millions of dollars spent including litigation. And it was a close call, and you could even say in the end, we lost because of where we’re at now because of the settlement. So for me, we’re an affiliate, but look at my perspective. It’s so different. I stood up there in front of everyone telling everyone for a decade that I’m using your fees to fight for you and the fight’s back and there’s no one fighting for you and they’re raising your fees. They need to announce quickly that they’ve hired a powerful lobbying organization to fight this thing. Se we should talk to Bill in Monterey, our elected official.
Sevan Matossian (26:23):
Have I met
Greg Glassman (26:23):
Him? He owes me on the soda battle. Yeah. We went out and talked to him.
Sevan Matossian (26:27):
What was his last name? I got this
Greg Glassman (26:30):
Monon.
Sevan Matossian (26:32):
Was that the same time you met Rand Paul out there? That same meeting or No, I’m confusing getting my wires crossed.
Greg Glassman (26:38):
Yeah. Yeah. Bill Monning, I him, he’s a neat guy. Politics makes for strange bedfellows. He and I would agree on nothing except the scourge of diabetes and the role that sodas played in this. His wife is an endocrinologist, but he is our elected official here for Santa Cruz. And we supported him handsomely effectively on his soda bill, even though it eventually got stopped by the guy down in that 42nd district. But then we rallied the troops and got him thrown out of office, which was kind of cool. He was Bill’s guy, but he also defeated bill’s bill, the soda bill. You’re not going to be able to find a successful, large, thriving fitness chain willing to tell the truth about salient lifestyle choices that matter. That’s going to be able to work in a political vacuum. You’re going to have to fight. It looks as though that was sold. It would be horribly disappointing to me, but I got this weird bias. That’s what I thought was worth doing. Now it’s not. And so it sits weird with me and it may not matter. I mean, I don’t move out of California, I guess if they make it illegal to train or get that other certification.
Sevan Matossian (28:20):
Frank, thank you. Lunch soon.
Greg Glassman (28:24):
Yeah, let’s get to, let’s sit and have some candid talks. Alright, sounds good. Thank you, Greg. Thank you. Alright, have good day, brother. Hey, what’s the Mexican food place that’s always busy in Muss landing right on the highway? I wanted to try it. I’ll come up with it. Thanks Frank. Happy New Year buddy. Sounds great. Alright, thanks Greg. You too. Appreciate all you do
Sevan Matossian (28:53):
Later, brother. Hey, is it called the whole enchilada?
Greg Glassman (28:57):
Yes,
Sevan Matossian (28:58):
I think Dave’s taken me there.
Greg Glassman (29:01):
Yeah. Dave says it’s pretty good,
Sevan Matossian (29:07):
Man. I asked that this lady I had on yesterday, the former president of Levi Strauss. I was asking her, she moved to Colorado and I’m like, Hey, so would you ever move back to California? And she goes, she would never live anywhere where Gavin Newsom was in charge. Man, she hated Newsom. I don’t blame her. I dislike him incredibly. And at one point I said, Hey, do you think he knows he’s a bad person? And she said, no. Does anyone know? And I’ve been struggling with that for the last 24 hours, thinking, wow, really? He could not know that. You don’t think he knows he’s a bad person.
Caleb Beaver (29:44):
They just think everything they’re doing is right.
Greg Glassman (29:49):
Name someone universally known to be pretty.
Sevan Matossian (29:55):
Jennifer
Caleb Beaver (29:56):
Aniston.
Sevan Matossian (29:57):
Yeah. Yep. I’ll go through.
Greg Glassman (29:59):
She, if she could.
The above transcript is generated using AI technology and therefore may contain errors.
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