âWe are living in a unique time where innovation is abundant and capital is readily available,â said Belva Anakwenze, director at Abacus Financial Business Management at Palms.
A prime example of the celebrity gold rush is the Casamigos tequila brand that George Clooney co-created in 2013 and sold for $ 1 billion in 2017 to spirits giant Diageo. Clooney’s co-creator was Rande Gerber, an entertainment entrepreneur married to model Cindy Crawford. This high price has rocked Hollywood.
âEven 10 or 15 years ago, these examples of celebrities taking stakes in business start-ups were rare,â said Shaun Clark, attorney for Century City.
Clark, a partner at Sheppard Mullin Richter & Hampton law firm, sees social media as a real change.
âI attribute a lot of the change to the technology that gives influencers and sophisticated talents a voice and direct connectivity with their fans and demographics,â he said. “You don’t just tap into their name, voice and recognition, you speak to an entire audience that sees and loves what celebrities are saying.”
In the hard liquor industry, where gaining market share is normally a frosty process, celebrity associations are increasing sales of tequila, a category that appears to be overrun by Hollywood and other talent. Besides Casamigos de Clooney, actress / producer Eva Longoria supports Casa Del Sol, basketball player Michael Jordan co-founded Cincoro, LeBron James leads 1707 Lobos, influencer Kendall Jenner pushes 818 Tequila and Nick Jonas of pop music launched Villa One. Jenner’s brand 818 generated mixed reviews from aficionados, but sold out at launch.
The latest sensation is Dwayne “The Rock” Johnson’s Teremana, which ranked 6th among mid-priced tequila brands in 2020, the newest brand in that mid-priced category, according to the Shanken Daily News drinks. Armed with Johnson’s celebrity firepower, the Mast-JÃ¤germeister brand distributor became an instant force in tequila.
“It’s very rare for a high-end brand to achieve this kind of volume in its very first year on the market,” according to researcher Shanken.
When it comes to situations where talent has this idea, business leaders play a leading role in creating a business plan.
âThe sales manager can be the quarterback tasked with putting together the financial information that will take the customer’s idea or product to the next level and eventually market,â said Mickey Segal, the founding partner and director of the Westwood-based NKSFB business manager. âThey are bigger clientsâ with significant funds to finance the development.
Segal oversees Hollywood’s largest business management specialist, with 600 employees in five offices, and is a division of Focus Financial Partners.
Talent CEOs can serve as de facto CFOs of companies, oversee product / supplier relationships, point the way to third-party financing, and advise clients on insurance and overhead costs. To a certain extent, business leaders incubate startups born by their clients. This incubation can be indirect by helping others to take over functions which are not in the wheelhouse of the entrepreneur or which are too important to be managed directly.
Business manager Mike Merriman advises a music client who has launched a successful beer-drinking contraption, the Chugbud. Merriman, president of downtown-based Parr3, is the startup’s de facto CFO for his client, known professionally as Mike, a hip-hop / pop singer with 4.5 million monthly listeners. on the Spotify music streamer.
The singer has many followers on the varsity music concert circuit where the party chugbud is a natural fit to the lifestyle. Merriman said his customer “has gone from assembling the product in a garage to outsourcing high volume manufacturing and selling tens of thousands of units.”
Active and passive income
Active and passive income
Century City Commercial Director John Blakeman, Partner at Macias Gini & O’Connell, noted that âEarly stage investment firms and emerging brands are looking for capital to take them to the next level. Through VCs and other investment avenues, proposals cross the offices of business leaders.
Another role of business leaders and legal advisers is to be upfront when clients want to invest in clearly high-risk businesses that appear to be bad bets and that would force the client to fund themselves personally. Then the business owner’s job is to âtalk to them from the ledge and save them from themselves,â Anakwenze said.
In the past, business leaders and lawyers weren’t on the front lines – the personal managers who guide global careers and the agents who book gigs were traditionally the initial catalysts. All are part of a celebrity advisor team.
But with the boom in celebrity monetization avenues, startups and digital media have become blurring the lines. Of course, business leaders remain the mainstays of traditional services in accounting, banking, financial planning and also in the alignment of passive investments such as the purchase of income-producing real estate or small holdings. in startups. Lawyers have also recently become hubs, through their involvement in increasingly complex celebrity sponsorship deals and industry contacts.
These celebrity associations provide instant visibility to business ventures, but there is a risk if the talent gets involved in the controversy down the road. For example, earlier this month brewer Anheuser-Busch Cos. abruptly stopped his drink Cacti Agave Spiked Seltzer, which is branded by rapper Travis Scott, after 10 people died in a crowd surge as Scott performed at the Astroworld festival.
For business owners and lawyers, side businesses, however, help clients achieve their wealth building goals and can establish good faith in business outside of Hollywood, which can be a stepping stone to a second career. .
Plus, unlike traditional Hollywood work, which often requires lengthy concert tours or reporting on Hollywood soundstages at dawn, clients’ creative talents engage in side gigs that have the potential to become self-propelled afterward. to have elbow grease for the launch. Business leaders constantly advise their clients to pursue activities that allow them to “make money while you sleep.”
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