02:21:24 · Tucker Brown, John Coogan, Jordi Hays
[02:21:24] S6: Like I think they were growing at a 50% CAGR [02:21:26] S1: for that entire time. And and no matter when you dip a lot of people dip in and out of Dude Perfect content. Of course, you go through some binge watching, you watch a bunch of the archive, then you come back years later and you see that, okay, everything's evolved and the great pieces are still the same, but they've added on a bunch more capability. [02:21:42] S6: Yeah. And their audience, to me, they they they cook sort of eight to 16 year old boys, I'd say, the core of their audience, but they also grew up with them. So these guys are they're 38 now. They have a big audience that, you know [02:21:52] S0: Oh, wow. [02:21:52] S6: Yeah. People in their thirties that do like watching the content. [02:21:55] S1: That's great. [02:21:56] S6: I didn't know much about it other than what I'd seen on YouTube. Yeah. They built a big live entertainment business. They go on tour. They sell at NBA style, you know, size arenas. [02:22:04] S1: Yeah. So what's unique about that deal? Because they're they they have multiple revenue streams at this point. They're doing advertisements, partnerships. They only have a partnership with NERF and, like, a bunch of other deals in the works, tours. And then they were also talking about building, like, a Disneyland, basically. [02:22:19] S6: Do Perfect World. [02:22:20] S1: Yes. Do Perfect World. Incredible. [02:22:22] S6: There was a big mock up of that when I first went to visit their office [02:22:24] S1: in Texas. Yeah. In Kansas You [02:22:26] S6: know, amusement park.
02:22:26 · Tucker Brown, Jordi Hays, John Coogan
[02:22:26] S6: know, amusement park. [02:22:27] S0: To make a pilgrimage. So [02:22:29] S6: yeah. Listen. They wanted to build and we've heard this a lot from creators, but, you know, kind of a next generation Disney type business [02:22:34] S1: Yeah. [02:22:35] S6: For a specific audience around, you know, sports, kids, comedy, family. Mhmm. Very family friendly business. And yeah. So I I I sort of got to know the guys Mhmm. Saw their business, diversified across a bunch of different categories. Yeah. It wasn't just a YouTube business. It was a real media company. Yeah. So we took that to market and executed a pretty large scale private equity transaction. It it wasn't easy. I was naive in the sense that I thought it would be because the financial profile was so attractive. [02:23:04] S1: Why was it legible to [02:23:07] S6: It it just it's it's a new category, I think, generally for transacting. That's opportunity that I see at this point in time. [02:23:13] S0: You don't have decades of, like, case studies and Harvard Business. [02:23:17] S6: There are no there isn't a single comp or press, and I looked at media company comps for it, I guess. And you're dealing with talent, you're dealing with key man risk in a way that's sort of unnerving to some private equity investors. [02:23:29] S0: Platform risk.
02:23:29 · Jordi Hays, Tucker Brown, Vincent Weisser, John Coogan
[02:23:29] S0: Platform risk. [02:23:31] S6: Risk. I mean, with them, it was a little bit less contingent on the platform itself, which was an advantage. Mhmm. You know, their YouTube revenue was a small percentage of the overall business at that point in time. But, sure, you know, investors get spooked by algorithms, what can happen if it goes up or down or changes [02:23:45] S3: Yep. [02:23:46] S6: And how that impacts the business. So it took, you know, to go and by the way, have find the right partner too. For, you know, for Talend and for their business, they built it over sixteen years. [02:23:55] S1: Mhmm. [02:23:55] S6: They owned it outright. They cared about what, you know, what the future looked like with their partners. So finding the right, not just the right deal, but the right people behind the deal to transact with, I'd say in this category and the creator world is more important than in others. [02:24:09] S0: And so you came out of that feeling like you had a greater sort of understanding of these businesses as well as like an appreciation for their potential and their quirks, and so you decided to become the buyer. Is that the right way to think
02:24:09 · Jordi Hays, Tucker Brown
[02:24:09] S0: And so you came out of that feeling like you had a greater sort of understanding of these businesses as well as like an appreciation for their potential and their quirks, and so you decided to become the buyer. Is that the right way to think [02:24:23] S6: about I I There were many times during that process, and there were a couple of those I did after where I was yeah, I just wish I was the buyer in that situation. I feel like I was doing the work to structure the deals that made sense. I understood, you know, the talent behind the deals in a way that maybe others buyers couldn't, and I came from the world of the agency at CAA where we had a whole suite of services and things we could provide for these creators in a way that, you know, a typical buyer wouldn't be able to do. Mhmm. So we pretty quickly started to think about what we could put together to basically be that unique buyer that we didn't see in the marketplace. Or we didn't see many of, didn't see really at scale, didn't see sophistication from, and started to iterate, you know, what that would look like and how it would come together, and do we do it through the agency proper, do we set up something independently, which is what we did, because I think it's important to be independent in the way that it's structured. And raised, you know, a good amount of money, and, you know, looking to do, you know, a lot of deals in the category and really become the the first of its kind, you know, kind of preeminent buyer in in this category. So, yeah, excited. For
02:25:31 · John Coogan
[02:25:31] S1: creators or media businesses that wind up with the Disney style business, the flywheel of multiple properties, multiple revenue streams, do you find that those businesses are sort of organically grown by garden, like a garden, or built brick by brick? Like, how often do creators have the idea Yeah. Of where they wanna go, and they execute one step at a time. Because I always think of that Disney flywheel, and, it's a beautiful napkin sketch. Yeah. And it's so cool, and you understand how the business works. But when he drew that, it was like two years before he died. Like, was very much a reflection on a life's work.
02:26:12 · Tucker Brown
[02:26:12] S6: Yeah. Listen. The best creators really are creative geniuses, but there's not always cohesion with how they think about the future and what they're doing. So oftentimes, I may see the whiteboard over there in the studio. You walk into their offices the same way, you know, I walked into Dude Perfect's office in Texas, and you see a whiteboard scattered with ideas. And it's all brilliant. It's not necessarily put together and structured in a way that provides, again, a lot of cohesion, but there's a lot of opportunity that they see. And I think first and foremost, what they've all done successfully is they focus on building a pretty rapid audience and building engagement with that audience. And then once you have that, and you have that captive audience, it really expands and opens up the world of opportunity beyond whatever that core product or offering might be. So for them, it was trick shots on YouTube, and then, you know, you build an audience there, kids, family comedy, and you can extend that into live events, into products, into things they probably, you know, certainly in 2009 when they started, didn't think they'd have a line of products in Walmart Yeah. Necessarily. Right? But then you start to dream bigger once you realize that what you're doing is actually working and resonating with the audience.