Jason Mueller

Dude Perfect raised $100M for global biz expansion. The deal is getting lots of buzz, but our team’s math signals challenges ahead. Let’s break it down… DEAL DETAILS • $100 - 300M growth capital investment • Led by Highmount Capital • Unclear if 100% invested upfront OR draw down of commitment over time • No previous capital raised USE OF FUNDS • Hire mgmt team to expand biz • More live experiences incl int’l tour, consumer products • Grow content formats, frequency, channels, global localization e.g. animation, TV, movies, streaming • Extend brand beyond 5 founders by building talent network • New HQ in Frisco, TX as prod facility and “family-friendly entertainment destination”: – Retail store, podcasts / gaming / fan UGC spaces, trick shot tower, DP museum, mini golf, restaurants – Original plans for 3-story, 30 acre facility est to cost $100M+, 2 yrs to build COMPANY OVERVIEW: Dude Perfect • Digital-native comedy and sports media brand • Faith-based mission: “We’re about giving back, spreading joy and glorifying Jesus Christ”  • Other YouTube franchises: “Stereotypes,” “Overtime”, “Bucket List”  • Media brand also incl books, mobile games, board games and toys, and merch / retail / food and beverage partnerships • 25 current team members PERFORMANCE HIGHLIGHTS • 60M YouTube Followers, 17B views • Est 2024 revenue: $50M per DP • Est 2023 and 2022 revenue: $25M and $20M per WSJ  • Consumer product partnerships incl Nerf toy line, Columbia Sportswear • Partnered with A Parent Media co to launch a streaming service • ESPN “30 for 30” doc premiering at Dallas Int’l film festival • TV series on CMT in 2016, later aired on Nickelodeon • Alternate broadcasts for Amazon’s Thursday Night Football • 4 live nationwide tours as of 2023 ORIGIN STORY • Founded 2009 by 5 friends at Texas A&M • Cofounders = twins Coby Cotton and Cory Cotton, Tyler Toney, Cody Jones, Garrett Hilbert • Started as YT channel featuring trick shot videos INVESTOR OVERVIEW: Highmount Capital • Growth stage and middle mkt PE fund for tech, media, healthcare • Founded in 2023 by jason illian and David Hawkins • 4 team members on website + advisor • 3 team members have faith-based ties per bios • No other investments listed on website other than DP My takeaway... I really like and support the trend of increased investment into YouTubers and digital-native media brands. But as I wrote about in my 2024 State of Creator x Media capital markets reports (will link them below), investment must match market and opportunity size. To ensure good ROI, and to set good precedent for future investment into our space. The DP bet is exciting, but could be overly optimistic based on our prelim math. My colleague Michael Booth's post breaks the math down (link below). More analysis to come in my Friday newsletter. —- I’m the founder of RockWater Industries. We do m&a and strategy advisory for media, agencies, and creator economy. My dm’s are open. #media #agency #creatoreconomy

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"As we grew the game industry a hundredfold, 75% of the time investors could prove the game biz would always fail." — Bing Gordon, xCEO of EA and Partner at Kleiner, Perkins, Caufield & Byers. Mobile gaming has been declared dead more than once. Supposedly, it has matured again and it's time to move on to the next big thing. Yet Roblox revenue is up 31% year over year, and daily active users are up 27% (https://lnkd.in/gDvn5KeK). How can that be? Anyone with kids doesn’t need these Roblox numbers to see that the next generation consumes content differently. When they enter the workforce, they’ll spend on mobile games and apps, valuing this digital interaction more than previous generations and in ways we may not yet understand. I’m aware of today’s challenges—I feel them as a supplier to mobile gaming companies. But I’ve been in this industry long enough to know that real growth often comes from unexpected places. Analysts often do not include these unexpected forces in their predictions. https://lnkd.in/gp8vf9Dq

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As Bloomberg points out, private equity has shown growing interest in the live entertainment industry over the past decade. For many years, the industry was considered too unpredictable for investors. I support the involvement of private equity in our industry. Those heavily invested in the live entertainment sector will benefit from the guidance of individuals who can offer leadership and a deep understanding of this highly nuanced industry. #liveentertainment #privateequity

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Anticipations for Netflix Q1 earnings were high, and the #streaming giant delivered. With a strong start to 2024, adding 9 million new subscribers in Q1 (bringing total subs to 270M) and a notable uptick in ad-tier adoption, Netflix continues to prove it’s still the frontrunner in the #streamingwars, with no loss of momentum. Early on, Netflix invested in a modern, cloud native technology infrastructure, which allows it to swiftly adapt to emerging monetization opportunities. This strategic investment is now yielding significant benefits in the rapidly changing content industry. New, original shows like Avatar: The Last Airbender, which quickly topped viewership charts, and the much-anticipated return of Bridgerton, showcase Netflix’s strong content advantage. Its diverse, engaging content not only continues to garner critical acclaim—recently securing multiple award nominations—but also significant audience interest. With the second quarter already underway, its stacked lineup of future releases will only bolster the company’s performance. While Netflix's content continues to receive nominations for industry awards, the streamer has no plans to shift its focus to big-screen blockbusters. Under the stewardship of their new film chief, Dan Lin, the strategy is aimed to reel in spending, prioritizing quality and innovative storytelling over star-studded casts in order to appeal to an array of subscriber interests. Entering the live sports arena, Netflix is making strategic moves by adding #livesports content to its lineup, potentially attracting a different demographic of viewers. Netflix’s deal with WWE, which has a highly engaged and loyal fan base, taps into this established audience, providing them with more reasons to choose or stick with Netflix over other platforms that don't offer wrestling content. One of the more highly anticipated programs, featuring a boxing match between Jake Paul and Mike Tyson, will also be a first for the streamer and could help Netflix capture the "event television" market, which includes live sports and specials that typically draw large audiences in real-time. The pioneer of streaming isn’t alone, however—The Walt Disney Company's Disney+ and Hulu are taking measures to keep up with Netflix, including ad-tier subscriptions, #passwordsharing restrictions, and bundling. Additionally, ESPN, Fox Corporation, and Warner Bros. Discovery, three of the biggest programming players in sports, signed a deal to create one cohesive streaming platform to host all their content, showcasing sports’ continuing growth beyond cable. As we continue to move away from traditional cable and towards streaming, we’ll need to keep an eye on how competitors are battling the giant and staking their claim in the industry. #LITrendingTopics #Streamers #Content #CordCutting https://lnkd.in/gxZVuTDj

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