Max Snow

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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Some additional information on how CKE Restaurants, Inc. and PMG are leveraging video-level contextual data via the IRIS_ID to target their CTV campaigns and drive actual bottom funnel conversion results! 📈 35% increase in incremental foot traffic 📈 152% increase in incremental sales lift Reach out to us if your a brand looking to increase the performance of your CTV campaigns or if you’re a publisher looking to increase your yield. IRIS.TV #ctv #data #performanceadvertising #contextual Digiday

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Billion-dollar PE buyouts are ramping, just see today's Squarespace news. Investors in media x agency deals should pay attention... Global deal activity is up 24% for 2024 YTD, with a total deal volume of $726B. Could be the beginning of a cyclical M&A rally, since deal volume was super depressed over the past couple years... ...and investors need to put money to work! Below are some recent public-to-private highlights, including a large media co deal where I did a deep analysis 👇 May 13 • Permira buying website builder Squarespace • Went public in 2021, closed 1st trading day at $5.9B valuation • $6.6 billion May 6 • EQT Group buying US digital consultancy Perficient • EQT also backs UTA, which has grown through M&A • $3 billion April 2 • Silver Lake buying diversified media co Endeavor • WME / UFC parent co TKO Global will stay public • $13 billion April 1 • Advent International buying payments processor Nuvei • Nuvie backed by celeb Ryan Reynolds • $6.3 billion Similarities across these recent deals include... - founder / CEOs staying on post deal - belief that targets are undervalued in public mkts - desire for more flexibility to grow, do M&A, and drive ent value for new owners That last point is key, as I think there's a strong desire to grow through M&A in a market where there are many sellers who can get picked up at good/fair prices VS the crazyness of 2020/2021. This is timely because... Last month I wrote about public-to-private deal dynamics in my Silver Lake / Endeavor analysis, check it out here --> https://lnkd.in/gtprBx7U I'm also working on an active client deal with similar characteristics, and it's important to know where capital is flowing, and why. Are you all seeing a similar trend?? -- I'm the founder of RockWater Industries. We do M&A and strategy advisory for media, agencies, and creator economy. My DMs are open. #media #agency #creatoreconomy

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Netflix had another impressive earnings call yesterday, adding another 8M global subscribers in Q2 (total now 277M) and further cementing its spot as the #1 streaming service in the world. Other key takeaways: 1. Revenue of $9.56B and operating income of $2.6B 2. Coming Q3: New TV homepage ("biggest update in a decade") 3. Quote on streaming competition: “The challenge for so many of our competitors is that while they are investing heavily in premium content, it’s generating relatively small viewing on their streaming services and linear continues to decline,” the company notes. So going forward, “we believe our biggest opportunity is winning a larger share of the 80%+ of TV time (primarily linear and streaming) that neither Netflix nor YouTube has today.” 4. Bundles: 'Yes' with Mobile providers, pay TV providers & device manufacturers, but 'No' when it comes to other SVODs.

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Will everyone want Starz AND Britbox? No. But for the ones that do, it will give Starz full ownership of the customer relationship. This could also be a test. Today, its Britbox. Tomorrow, maybe it’s Peacock and Paramount (examples only). The bigger story here is how many companies off the record are getting uneasy at platforms taking 15-30% revenue split, so they’re building bundles that circumvent the App Store. Example 1: Disney Bundle Example 2: Disney, Hulu, Max In that, lies a LOT more profitability. Like a lot. And customer data to boot. This article is only a portion of what we learned talking to people from the inside We’re putting more out soon.

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TikTok ban is jet fuel for $4B Triller / AGBA reverse merger. But this is financial engineering to salvage 2 struggling companies. Retail investors, be wary! Let’s break it down… TARGET: Triller • “AI-powered” music-focused social video platform • Founded 2015 by Bobby Sarnevesht and Ryan Kavanagh • Owns Bare Knuckle league, Amplify.ai, Julius, Thuzio, FITE • Raised $218M+ and TBD debt • Biz model = rev share, ticket sales / PPV / subs / merch, advertising, platform fees • Rapid US and int'l growth via TikTok bans (e.g. India) • 200 est employees PERFORMANCE • 2.2M creators, 450M+ user accounts • 2023 revenue of $45M, down from $54M in 2022 • Q3 YTD showed $104M loss, $378M in debt / liabilities vs $6M current assets • $1M cash & equivalents CONTROVERSIAL HISTORY • 2022 Sony sued for unauthorized music use • 2023 UMG sued for same reason  • Owes music rightsholders $23.6M in unpaid fees • 2022 called off $5B reverse merger with video ad platform SeaChange • 2022 missed M&A payment to Verzuz owners • Filed for NASDAQ IPO in Aug 2023 and Jan 2024 • Reputation for inflating users and usage TARGET: AGBA • Tech-driven wealth mgmt and financial services • 4 biz lines: Platform, Distribution, Healthcare, Fintech  • Founded 1993 by TBD • Focuses on the Guangdong-Hong Kong-Macao Greater Bay Area • Biz model: interest income, commissions, asset mgmt fees • Publicly listed on NASDAQ, holding co registered in BVI, operates in HK  PERFORMANCE • Stock fell 80% 4Q 2022, has traded < $1 since July • $140M market cap, $19M of cash ($17M is restricted), $18M debt • 400k individual and corp customers • 2023 revenue of $54M, up 74% YoY, but a loss of $43M • 176 est employees DEAL DETAILS • All stock deal, AGBA acquiring Triller in reverse merger • New combined AGBA will be 80% owned by current Triller stockholders and RSU holders • Current AGBA shareholders will own 20% of new combined co • Expected May close VALUATION • Triller at $3.2B and AGBA at $800M, for $4B total • …BUT seeking alpha estimates as of 4.23 AM stock price, Triller’s real valuation is $1.3B •….and based on TikTok share repurchase valuation of 17x revenue, implies $765M Triller valuation • As of 4.23 AM stock trading at $2.40, up 500% from $0.40 the day pre announcement DEAL RATIONALE / SYNERGY • Leverage Triller’s large social audience to drive traffic to AGBA’s financial services and create more engagement via live events, webinars, etc  • Create personalized AGBA financial services via Triller user analytics and insights • But IMO here’s the real angle… • “access public capital markets and secure the liquidity needed for rapid growth” – aka a cash grab from retail investors • Triller is being aggressive when competitor TikTok faces US regulatory challenges (senate vote is today, Tuesday!) More analysis to come in my Friday newsletter! --- I’m the founder of RockWater Industries. We do m&a and strategy advisory for #media #agency #creatoreconomy. DMs are open.

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During a conference this week, Sony Pictures Entertainment CEO Tony Vinciquerra stated that the business is trying to create more profitable, genre-specific streaming projects that are equivalent to Crunchyroll. Tony stated, "We would love to launch more genre-based targeted, passionate fan centered streaming services. We're really positive on that front. And that's what we're now working on. However, it will take some time for the market to stabilize." He added that Sony is not beset by legacy TV networks, in contrast to Disney and other broadcasters. When he began working for Sony, the business had 110 cable networks worldwide. However, all of those networks have since been sold, with the exception of three markets—Spain, Latin America, and India—where cable networks are continuously expanding. For licensing of content, Sony has "proposed structures where we'd get the show back after 4 years or 5 years as opposed to the much longer terms that are currently in place, but thus far, there hasn't been much development in that area." Tony said that when it comes to consolidation in the market, Sony plans to "sit back and watch what comes available to us because we're in a very stable, very comfortable position. And we think that there will be lots of businesses that pop out of these companies...we would be interested in taking on mainly in the IP area, and that's really where we'll be focused." #streamingmedia #sony #SVOD #AVOD #paytv #cordcutting

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PSA for CEOs: It’s your job to understand what potential acquirers want. Even if you’re not looking to sell yet. This idea was top of mind for me during GDC, where I met with several bigger studios. I took every opportunity to ask how they think about acquisitions: - What makes a potential acquisition interesting to them? - What thresholds do studios have to meet? - What metrics do they value most? This type of forward-looking market exploration is a shift for me. My primary focus for the last four years has been building FunCraft into a successful business. But my role needs to evolve. While FunCraft is growing and thriving independently, it’s still my responsibility to gauge what could make us an attractive acquisition down the road and understand how we build toward it. My advice to other CEOs: If an acquisition is something you can envision for your company down the road, don't plan for it in a silo. Talk extensively with potential acquirers and let their input inform your strategy early on.

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We at Parrot Analytics are so fortunate to have Brandon Katz working with us who, in his year-plus at the company, has penned the critically important Parrot Perspective newsletter, a monthly report that digs up an enormous amount of data to try and parse an issue affecting the entire media ecosystem. That's included the secret behind binge vs weekly strategies, how to find the next global hit by looking at local content trends in international markets, the impact of key AVODs like Tubi, and analysis of M&A activity that matters at the consumer behavior level. We've decided to try and elevate Brandon's incredible work by tying it to our D360 Lite product -- a data platform with access to much of Parrot Analytics' data sets, ranging from TV and Film Demand, to Talent Demand and our Supply dashboard. This month, Brandon looked at Netflix's film strategy — what's working, what's not, and what should Netflix do next. Our goal with Parrot Perspective is to try and find solutions to the problems we face, not just point them out again and again. Here's one quick data point that illustrates some of the many details you get in Parrot Perspective: "Netflix sits last among the major SVOD services in hit rate, which measures sentiment for films, with 64% of titles falling into the “Average” category, according to Parrot data. This leads to a number of forgettable films that don’t generate much viewership or demand, as evidenced by Netflix’s own Engagement Report. (The top 1,000 TV/Movie titles out of 18,000, or roughly 5%, accounted for nearly 60% of all viewing in the six month period). This can also lead to the company’s popular films quickly falling out of relevancy in the greater pop culture conversation. Netflix ranked last behind Universal Pictures, Sony Pictures Entertainment, 20th Century Studios, Paramount Pictures, Warner Bros. Entertainment and The Walt Disney Company in terms of the percentage of films that maintained significant public interest for more than five months, per The Wall Street Journal. As of Q1 2024, Netflix original movies accounted for 25% of the platform’s total movie catalog in the US market, a significant increase from the 20% it saw in Q3 2022. Despite this, just one Netflix original movie ranked among the 50 most in-demand films worldwide from January 1, 2020-April 3, 2024." Read all of Brandon's great insights — and gain access to a limited form of Parrot's data — at the link below. https://lnkd.in/grGFKhW5

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