MrBeast Leaves Management Co Night + Learnings for Talent Reps
RockWater Roundup
RockWater analysis to make you a better investor and operator. Today we discuss MrBeast’s decision to exit exclusive representation with talent management company Night, the rationale for the change, and what the industry, and particularly talent reps, can learn from the move.
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Mr Beast is leaving exclusive representation with his longstanding talent management company, Night.
This is no surprise to creator economy insiders, as rumors have been swirling over the past few months.
But my interest in covering this topic is not to perpetuate the rumor mill, or throw shade. Instead, I intend to use it as an industry case study, so we can understand the implications for premium talent representation today and where it’s headed, what we can learn from it, and how this impacts creator and representation strategies going forward.
And I’ll do that simply by proposing the questions industry observers should be asking, and offering my POV on some.
🧐But first, some notes about talent…
Personally, I know the talent game a bit from my early digital media career, where I ran one of the first creator management companies that was part of the YouTube Original Channels program, and then saw through its sale to a digital studio owned by DreamWorks Animation. And now as the founder of RockWater, I regularly advise talent rep companies on M&A and strategic options, advise businesses on their talent-led growth strategies, and also work direct with talent themselves to expand their overall businesses.
So to that end…
Anyone who came up in the creator economy over the past decade knows that digital-native creators have a strong DIY mentality relative to their traditional talent peers. They’re, on average, more adverse to traditional Hollywood institutions, gatekeepers, and % takers of their earnings.
I believe this mindset has helped propel the creator economy forward, and realize the rapid growth and disruption it’s known for. But in some ways, it’s also held the industry back and prevented it from leveling up – like my therapist always tells me, there are moments when you must ask for help, and divide and conquer based on strengths and weaknesses.
Further, anyone who’s worked in entertainment for a few years, whether supporting traditional or digital-native talent, knows that talent often change their representation – it’s just part of the business, whether deservedly or not. But of note, it’s very telling how reps manage and bounce back from large talent defections. Just like how any entrepreneur manages challenges in fundraising, competition from larger incumbents, etc.
I therefore consider these moments a time to showcase an individual and team’s fortitude, industry savvy, and opportunism – in coming back stronger and better. Which makes me very curious to how CEO Reed Duchscher and co react.
I’ll definitely be watching.
And I did like this. Short and…sweet.
🔎Now, let’s zoom in on Night…
Night is one of the US’s largest digital talent management firms. And they’ve grown extremely quickly since being founded in 2015.
Some recent highlights…
- Bought mgmt co LFM in 2023
- Are actively talking to other influencer agencies re acquisitions
- Helped launch Feastables in 2022, which is est to do $100M+ in 2024 revenue
- Aggressively recruiting more talent clients and commercial partnerships to have more YouTube inventory to sell to brand partners
- Growing exec team to add more capabilities in creator biz lines outside brand partnerships
These aggressive expansion tactics are expected with investor backing, where ROI comes from growth and business diversification. Regular, consistent growth is not good enough. Reminder that in 2022 media investor TCG allocated $100M to Night Capital, a fund setup to acquire creator-led consumer businesses, and TCG also invested directly in Night the mgmt co, though the exact amount has not been publicly disclosed – I estimate in the low to mid 7 figures range.
Night founder and CEO Reed Duchscher, along with his team, have clearly done many things very right, and deserves many kudos.
This also includes aggressively marketing their partnership and success with MrBeast, which helped Night sign other high profile talent, grow their team through hires and M&A, and recruit TCG to its cap table.
But what have they NOT done right?
What does this change mean for Night, and the broader talent rep industry?
Below are some questions that come to mind.
Again, my goal = use the power of questions to guide learnings here, so we can all be better.
- Why exactly is MrBeast parting ways w/ Night?
- Perceived conflict of interest as Night scales?
- Frustrated by Night’s handling of recent CPG and brand partnerships?
- Can’t agree on a new negotiated rate?
- Simply wants to keep more margin, and has the internal team to service all his deals?
- What other advisors are in Jimmy Donaldson’s ear?
- How is the LFM acquisition performing?
- A key angle there was a focus on building out creator-led brands, since some LFM talent like Kai Cenat are not brand safe
- What new talent-led biz ventures have launched / are WIP?
- What CPG investments has TCG-backed Night Capital done?
- How are they performing?
- Are investments ramping up due to early success, or are new investments slowing down?
- How involved has Night been in the Feastables build?
- Were they sidelined after the burger controversy (now in litigation)?
- What was their actual role in the brand origin?
- What is their role now, considering that Feastables now has a large, dedicated, and well-pedigreed exec team?
- What are the other top agencies Jimmy will tap to bring him deals on a non-exclusive basis?
- Is non-exclusive tenable in the long term?
- I bet the digital teams of the big 3 Hollywood agencies are barraging Jimmy’s team with calls…
- Will Night and MrBeast continue working together on a non-exclusive basis?
- Who will brands prefer to work with i.e. who is better at brand partnership servicing, Night’s team, that of Mr Beast, or a new 3rd party sales agency?
- How much of a financial hit is Night taking without MrBeast commission?
- I’ve heard estimates in the low to mid 8 figures range of net commissions
- How will that revenue be made up?
- How can investors like TCG rally behind Night in this critical moment?
- Did Night have a term deal with Mr Beast, that ensures commissions for another 1 to 2 years?
- At minimum I assume there’s a tail on recent deals
- How much harder will it be for Night to recruit digital talent?
- Jimmy comments’ on the split, both in public and in private, will play a role here…cause all talent talk!
- FWIW, Night will have much more time to dedicate elsewhere now!
- Will this cause churn of existing Night talent?
- I’d assume not immediately, since many talent don’t have the same infrastructure and team support Mr Beast has. But…
- Is Mr Beast going to launch his own mgmt co?
- I haven’t seen a creator launch a talent rep firm yet, though they are launching talent networks, e.g. Alex Cooper’s Unwell network, Jake Pauls’ Team 10
- Would that even make business sense? IMO not now, Jimmy has too much core building to do
…what else should we all be asking? 🤔
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I’m the founder of RockWater Industries. We do financial and strategy advisory for media, agencies, and creator economy. From M&A and fundraising to consumer research and go-to-market planning.
DM me on LinkedIn or email me chris @ wearerockwater dot com
