02:27:18 · John Coogan, Rodrigo Liang, Tucker Brown, Jordi Hays
[02:27:18] S1: Yeah. So the fund that you've built, how permanent is the capital? Are you thinking about a certain fund life cycle? Is there a world where maybe not today, but in ten years, we are talking about capital markets, public markets, creators going public. There's been rumors about MrBeast. [02:27:36] S4: Yes. [02:27:36] S1: And I could see that happening, but that might be, like, a exception that proves the rule. But is there a world where in a decade we're looking at, like, yeah, like, the top 20 YouTubers and podcasts are public? [02:27:46] S6: Yeah. Certainly possible. I mean, it's the, you know, it's the fastest growing segment of entertainment. People want exposure to that. Yeah. It's going to start with private capital. I think it will probably move into the public markets. [02:27:56] S4: Mhmm. [02:27:58] S6: So, yeah, I think we're moving in that direction. For us, I think permanent capital is an important part of our strategy. We want to we don't want to be forced into an unnatural life cycle where we're forced to sell quickly. Creators don't and, you know, feedback is Yeah, [02:28:10] S0: they're like, hey, you're doing your life's work, but also we're going to try to just change up who you're partnered with in a decade. Whereas, like, a CPG business or a software company, like, the management team might be fully turned over over the fun life cycle. We try to again, in structuring this, we try to solve for what we [02:28:27] S6: heard was important to creators in the transactions I've been around. [02:28:32] S0: Yeah.
02:28:32 · Jordi Hays, Tucker Brown
[02:28:32] S0: Yeah. [02:28:33] S6: And some permanence of the partnership or permanent capital is part of it. You know, letting creativity sit and remain with the creators even in a controlled transaction, so there's no interference in the creativity of That's what they've really important even if you're selling equity control. [02:28:48] S0: Yeah. Yeah, to me, I look at it and I can see over time this just being a more and more and more important part of CAA strategy because the challenge right now is you have creators. Historically, there was maybe I don't I don't you know, you you you'll know much more about the history, but my feeling is that historically, there was like maybe 500 stars that matter. Yeah. And then now in media, there's like 50,000 stars that matter across every single vertical. It's you you it was it was maybe easier to run a business when you had, you know, you could just focus on like a smaller number of like really really big stars who were running their own, you know, basically, they they had their own individual businesses. But when you have 50,000 creators and all these sub niches, you can't like, it seems like there's probably a limit. Like, you can't scale the CAA team ten, twenty x and expect to be running the same You agents. Need to Yeah, exactly. [02:29:45] S6: Cover it all.
02:29:45 · Tucker Brown, Jordi Hays
[02:29:45] S6: Cover it all. [02:29:45] S0: And so as a as a sort of new strategy saying like, hey, we're gonna try to service as much of that market as we can, but we're also gonna try to find the best talent and businesses across all these different categories, and then be a long term partner to those Mhmm. And actually participate in their overall business. [02:30:04] S6: Yeah. You go deep with the ones you believe matter most and are positioned to scale the most. Yeah. Right? So we're not, you know, trying to transact with hundreds or thousands of creators. It really is to pick the businesses we believe in and categories that we think are exciting and scalable and go deep with them across the board. On the capital side of things, then, you know, we're working with the agents. [02:30:26] S0: How do you think about stages in a creator's life cycle? There's people that are gonna be incredibly talented from a just pure talent standpoint. Right? There's people out there that are like, not even good at making videos, but have incredibly engaging content because they're so good. And then usually they graduate into having, you know, better and better teams and eventually maybe they get into products. But like, how do you look at the different stages? What's what's too early? Yeah. When are you seeing a an individual who's, like, showing all the potential but is too early for maybe a transaction?
02:30:26 · Jordi Hays, Tucker Brown, John Coogan
[02:30:26] S0: How do you think about stages in a creator's life cycle? There's people that are gonna be incredibly talented from a just pure talent standpoint. Right? There's people out there that are like, not even good at making videos, but have incredibly engaging content because they're so good. And then usually they graduate into having, you know, better and better teams and eventually maybe they get into products. But like, how do you look at the different stages? What's what's too early? Yeah. When are you seeing a an individual who's, like, showing all the potential but is too early for maybe a transaction? [02:31:03] S6: Yeah. We don't like to be hyper prescriptive with with how we look at it. I mean, are certain things we do look for to assess whether it's the right stage for us to get involved. If it's an individual without a business, it's tough for us. Mean, there's a lot of work [02:31:15] S1: Sure. [02:31:15] S6: To do probably to pull it together and make it transactable. So we look for it to be an actual business that's been built and scaled to some capacity. Right now [02:31:24] S0: Is that like multiple revenue lines, not dependent entirely on platform revenue? Yeah. Like those kind of [02:31:30] S1: Maybe an operator [02:31:31] S6: and a To verify to some extent. Maybe an operator, not essential. Mean, I was no operator do perfect when we did that deal. [02:31:36] S1: Wow. Wait. They do everything themselves? [02:31:38] S6: I mean, there was, I think, 20 employees. The oldest outside of them was 24.
02:31:38 · Tucker Brown, John Coogan, Ben Thompson, Jordi Hays
[02:31:38] S6: I mean, there was, I think, 20 employees. The oldest outside of them was 24. [02:31:42] S1: Yeah. But they didn't have, like, a business guy who would be, like, [02:31:44] S6: the aggled business guy. [02:31:46] S1: I love that. That's awesome. Yeah. It's a it's a different business. [02:31:51] S6: Yeah. It's Yeah. 80 employees now. Yeah. Yeah. Of course. So you look for some sense of a business, achieve diversification in some it doesn't need to be massive, but yeah Yeah. Some off platform monetization is, you know, is attractive. And then, yeah, scale of revenue, profitability. We really only like businesses that are profitable and that's it's not I don't want say it's not hard to do, but in in this category it is. You're used to seeing margins that are not common in traditional media. [02:32:17] S1: Yeah. [02:32:17] S6: Right? 50% plus margins [02:32:19] S8: Sure. [02:32:19] S6: For a creator business is actually relatively, it's relatively standard. [02:32:23] S0: So Sure. [02:32:24] S6: Yeah, look for for profitability growth and again, the categories that we think are positioned scale Yeah. And where we can be valuable and add additional value. [02:32:32] S1: So Yeah. [02:32:33] S6: You know, bring service.
02:32:33 · Tucker Brown, Jordi Hays
[02:32:33] S6: You know, bring service. [02:32:34] S0: When you're when you're underwriting a deal, are like, how do you think about it? Like, how do you how do you think about a business where you know there's a ceiling? Like and and I imagine there's certain situations where you're totally because, like, there's certain creators, I would say that, we've always said that if you if you asked us to make content for a 100,000,000 people, we would just wouldn't enjoy doing it because we'd be covering topics that are not interesting, right, to to us at least. Sure. And there's, I think, a lot of creator businesses where there's sort of like some TAM on from a from an audience standpoint in the category. Million dollar business today. I think that you can get to 40 and and that's gonna be enough for it to be a home run for you and us. Like, is that a conversation that you have or is it always like Yeah. I need to see the path to super stardom and, you know, 9 figures of revenue?