UTA’s Sam Wick Talks Building Businesses for Talent ‘Accelerators’

and smiling for a check is pretty much over. Nowadays, brands are looking to align with bold faced names that give them what Wick calls brand permission to reach their target consumers. Wick has seen the evolution of digital media from the front row, having come up as an executive at MP three, dot Com, MySpace and Maker Studios before

he joined U T A in ten. Putting on his venture capitalist hat, Wick also offers some insights on fast growing sectors that are destined to enter sect with entertainment. That's all coming up on today's episode of Strictly Business. Welcome back to Strictly Business, Sam Wick, head of MUTA Ventures, Thank you so much for joining us today. All right, thanks for having me tell me Sam, You you know, as the head of a ventures group for one of

the Hollywood's largest talent agencies. You have quite a perch into the industry, and it's an industry that has has really been in the last you know, two years, has been in quite a run of attracting a ton of attention from private equity. Seemingly every everybody that ever held an executive position is about to launch us back to

go buy things. There's a lot of activity in the marketplace right now from your perch, what do you see that is, you know, particularly of interest to private equity investors. Sectors of entertainment, media and telecom are they most interested in right now? Right? So, if we even kind of step back and just talk a little bit about how we think about kind of talent and how they act

as accelerants, you know, for a business. So, you know, one UM agencies, Traditionally we're focused solely on media, but as they've evolved and added additional division sports, speakers, fine arts, right, you know, digital, the the breath of what we actually touch is much much broader than just media. So the way that I fundamentally think about it is where do our clients have brand permission? Where does their audience feel a sense of attachment to the remissions or their goals.

And that is so that includes media. Media is definitely a large focus area there, but it also includes consumer products. That also includes um experiential businesses like hospitality or restaurants, and it includes a pro social right. You know, one of the things that town are great are simplifying complex situations or borrowing. You know, brands can borrow their brand equity to help them kind of understanding. So you see that a lot in like climate change or even a

category like finance. But go back to social just you know, any any number of social justice issues absolutely get magnified. Yes, but to go back to your question in terms of where are people looking right? What are they thinking about right? And so I'll hone down on a couple of themes that I've been thinking about specifically related to media, and then maybe a little bit later we can talk about

the thesis that actually gets us to these categories. But on one end, you've got UM this movement towards media companies focusing on direct consumer businesses. And if you think about companies like Disney and Discovery, historically they were more B two B two C companies. They created great content right, and they went to someone like Comcast. You did all the marketing, the customer acquisition, the the LTV, TOKAC analysis, the churn analysis, all of us. They're getting good at this, right,

and Disney is getting really good at this, right. So then they start thinking about where the growth is for these kinds of businesses, right, And Disney now has three direct to consumer services, and ESPN and Hulu and Disney plus it's pretty logical that you could think about, well, they now understand that funnel, they understand how to market, what are the other things that could fit with their

brand identity. So, for example, we're an investor in a company called masterclass Um, which is an incredible you know business, right, you could see a company like that really fitting in quite nicely with Disney or frankly Discovery right um. But you could also see those same types of companies not just focusing on video assets, but any asset that has a subscription method, right, So think about a music service

or a wellness service. Could a company like Calm or headspace to be bundled together with some of the offerings that some of these media companies have, So so anything kind of in this larger subscription um area. I think it's really quite quite interesting for us if the world of the new bundle people are bundling and yeah, in the old days it was MTV and CNN and Nickelodeon and Lifetime, and now it could be, like you said, any number of channels plus a wellness app or a

or a zen meditation. You're right that unbundling and re bundling is why I think why everything feels so kind of kind of frenzied right now in the business, because there's all this opportunity, but there's also like, what's going what's going on? So yeah, as you say, okay, so I want to give you another theme, which is um and this is like this has been going on for up right, which is if you find places where people are spending more time then where dollars are spent, there's

going to be growth. Right. So if you think about this, you know where I initially built my career, which was in digital media perfect example. Right, for many, many years, there's more time spent than dollars spending. Everyone kept saying, well, advertising dollars are eventually going to shift. Where's that happening today? Audio? Right, So often as we say podcasting, but it's not just podcasting.

Clearly there's incredible growth and podcasting. We see a lot of the same dynamics happening with creators, the creator economy and podcasts like we have a client my favorite murder has an incredible kind of connection to reach same way the digital talent you know do you know do today, But it's broader than just podcasting, right, and such as content, it's the entire infrastructure layer. We have an investment in a platform company called Art nineteen that does distribution and monetization,

but it's also connected devices. So if you think about what's happening with Alexa or Google, right, that's a separate ecosystem, more time spent than dollars spent, right, Um. And then you could also look at you know, areas like converting print to audio and there's been a lot of investment they're making that content, making content kind of easier to consume, you know, on the go. Right, So that is also

a general theme for us. Right, I'm thinking like even within those industries, there's so much tech innovation that needs to to make up We've been so spoiled, were so spoiled by these great interfaces but every click is somebody pouring over to make it that easy. And a lot of investors have told me, like, you know, it's not as sexy, but ad tech and connectivity tech is there is just amazing, like you know, moving ahead at at warp speed innovations going on there. I'm sure you're seeing.

It is a truism that it is oftentimes not just the vision but the execution, the detail. So it is the little things right that um maybe we don't think about. They're not as flashy, right if well, you know, but

that really make a difference. And so when you look at and we have a lot of businesses and consumer products, we spend a lot of time thinking about what is the acquisition funnel, what is the drip marketing strategy across you know, email and text and you know, and what is the proper churn rate and and inventory allocations and three PM Like these are things that are not particularly like you know, high flying and sexy, but they are typically a hallmark for um, you know, what moves a

business from being just good, you know it too great. And so you know, going back to the audio theme, you know why you know why is why does why is clubhouse winning in the audio category, right, because it's gonna be ton of competitors. Why are they winning, right? And and it's oftentimes that attention to detail the network effects that really, at the end of the day, make

a huge difference easy of us. So with the direct subscription boom at the biggest of the big companies, how are you seeing that filter out to opportunities to investors in other areas. We both invest and we build businesses with our clients and UM when we build, what we've found is that over time the market is evolving and it's it's in a sense upstreaming. So it used to be that the talent would just start something from scratch,

raised capital, build the brand. Increasingly we're seeing this interest in and this is when we work with with private equity quite a bit, or with corporations spinning out new divisions.

UM you know, potentially buying a company and using UH and working with talent to inject their their brand story and authenticity and accelerate the brand, or even taking a brand like a lot of the large public companies have brands that are just kind of operating at at a steady, steady state level, right, and you know, the gross margins the same, the profitabilities the same, the marketing expenses the same.

They're not gonna double down on marketing, but they feel like if they could, if talent could come in and really fit with that brand and help them move the needle via earned media, right, you're willing to compensate the talent in exchange for that. And so you do see that up in a lot you know, you know, on the talent you know side again, I think more frequently in both um consumer media, but also uh quite often

in consumer products you know as well. And are you seeing I would imagine that you're seeing, you know, we're talent getting some form of equity, whether it's you know, equity equity or a small slice of equity. But I mean that seems to be a growing area. I would imagine, you know, a growing area focus for the you know, for the many you know, top tier folks that you

guys represent. Yeah, there is, there is, There's there's a couple of themes, right because you know, there's always been a very robust endorsement business for a lot of talent. But what we're increasingly saying is that the talent are interested both because of the potential financial returns. But also I think the legacy aspect of it in building you know, big and meaningful you know businesses, and there are macro

factor is driving this. You know one if you look at and you look at studies around younger consumers, they are increasingly looking for brands that they that have a founder led story and they understand the mission around and talent are highly effective at this. You also hear the same thing from retailers, so um Target has done especially well at this over the past few years and bringing

in founder, founder led brands. I think the other fact, and this really touches in with media, is that it's harder and harder to tell your brand story through traditional media. Right there's less advertising space. And so if you look at the platforms that are growing, let's so let's let's look at the social networks. Think any of the right, Facebook, Instagram, Snap. The actual content that people are consuming is generally the social content that you and I or a celebrity or

an influencer is creating. And so they're actually controlling that marketing message in a way that's much more powerful. And I think the brands are increasing recognizing that that they are an effective manner kind of breaking through, you know, breaking through the noise. You must have seen um you know,

I mean you must be watching with interest. The growth of TikTok and and TikTok as a as a marketing platform, is you know, the fact that that feels almost baked into its d n A. It seems like, you know, there's so much opportunity there, Uh certainly. I think one thing that's interesting is before TikTok, you may have to go back, uh ten years to find the last breakthrough social media product, which is probably Instagram, right, So it's been a while, so it's hard to get those network effects.

And each of these platforms has a different kind of influence or a creator and typically a different kind of um product are kind of product opportunity comes out of it. So what's interesting about and about TikTok specifically is for me is one the growth of food. Like food has always been a category that we've always felt that talent could push on. It's always been historically been a category that's not been as attractive because the margins have been

somewhat thin. At the retail level. You've got to sell a lot of boxed macaroni and cheese to make it worth your Yeah, when you're seeing a lot of creators do very interesting things. So, for example, we represent Half Baked, harrist Right, who is one with the YouTube an TikTok, Joshua Wiseman who is a fast growing kind of young hip you know, celebrity chef. And so each of these platforms does create their own set of stars and influencers which then leads to a series of businesses that they

can build. When you go out in the in the business building part of your job, when you go out to look to raise money for people, do you find that you find do you have the usual suspects? Do you have the usual ten firms that come in to my mind, I keeps every time I turn around, there's a new something, something capital new, you know, venture is inc It feels it feels like there's just like a lot of new faces coming into the you know, a

new interest in the industry. Are you seeing them right? Um? Well, first I should start by saying it's not just me. I have an amazing team. Um. And I will also say that I think, you know, pound for pound it it's the best you know, uh team possible. And it is largely a team composed of female executives and that I have a sense as that's why we're overperforming. Well,

you want to get something done right UM. But you know what's what's interesting is I think, as we've discussed, I come from a background of having raised venture capital for my own companies, building them and selling them, and that was the model that I truly understood UM coming into it to U t A. What I've learned is that you know, being in client services, we're not a one We can't really have one size fits all. That not every business, not every talent is meant to go

through the venture process. And so in developing our group, we developed in essence of financial coverage model and we work with family offices, all stages of venture private equity and also UM corporations. And the models have a wide variety in terms of how they're capitalized. So there are businesses UM that we've gone out and we've raised venture

capital for so UM. So for example, we have a business with Ray called Ciena Naturals, which is a natural haircare company is run by a woman named on a joke, who's fantastic. That company UM is venture backed, large venture backed. But there are other businesses where we've structured them as joint ventures with corporations or brand incubators. An example of that would be we have a business called Anomally with

Prianka Chopra, Jonas Uh and Mesa. Mace is backed by mass A beauty brand, the incubator, and they're backed by Being, which is a private equity company UM, and they have different I'm not saying one's better than the other, right, It's really about what are the ultimate goals and objectives you know, of our of our clients UM. But there are a wide variety of bottles, so it's not I wouldn't say it's there's no usual substance you know, useful

suspects model, although there are certain marketplaces. So if you're going to build a beauty brand, you know that there are a certain number of very strong brand incubators that you're gonna work with, and if you're going to do it on your on, there are a certain number of venture funds who are top to your funds who really excel right at and investing if you want to go

down down that path. But what's really interesting to me, and particularly kind of given out the sizing, is that the range of models that that we've been able to kind of work through. And I will tell it's it's say it's it's really um, it's changing in real time. What are you finding in terms of particularly younger talents that comes to you. Are you finding is there a real sense of like digital entrepreneurship out there? Are people?

Do people come in Talented people come in come in your doors with the idea of yeah, I can build a company. You know. It feels to me like there is a breed of you know, twentysomething that has a podcasting company in their head and working, you know, working on other audio projects on the side. I'm amazed at how many plates people can juggle, right, So we call them the multi hyphen it's right because they can do

so many different things. And so there is UM. Well, I'm just starting with a question on on digital platforms. I think many of the creators who um are building businesses on digital platforms. Um, they're breaking down that that that that wall, that barrier. Right. I used to always say this, and men was in the managin of Maker Studios and YouTube Network, and what I saw there was when you were speaking directly to your audience, they really understood who you were, and you had a greater ability

to influence influence purchase behavior. Um. And so I think a lot of the digital creators are really savvy and really understand us. UM. And so if you look at someone, for example, like Emma Chamberlain is one of the biggest digital stars period full stop. UM. We worked with her and we've we've built a coffee company with her called Chamberlain Coffee, which is doing incredibly well. UM. But it's because I think the audience understands from day one, right,

her love of of coffee in that category. Um. And that's happening across the board. You could look at our clients, the Demilio's um who are on on TikTok, you could you could look at a number of the beauty influencers, right, they've almost baked in commerce as part of their DNA. The content itself, right is you know, instructional is educational right in a way that it wasn't you know for a previous generation who was on film and TV. It's

a very different, very different tool. Kid. We'll be back with more from Sam Wick after a quick break, and we're back with U t A. Sam Wick. Sam tell us about your own journey through digital startups and entrepreneurship. How did you How did you get on the path that led you to U T a UM. One of my colleagues like to say, it's the wind, the long and winding road, how I got to you T a UM.

I've always been interested in media and tech. I actually started my career doing A and R for American recordings. I worked for a guy named Rick Rubin who anywhere to him anyone loves hip hop Los O very well. I actually signed a group called System of a Down UM and that was my whole first career and I and I loved music then and I love music now. And one of the things that I often say is, no matter what job I choose, it always seems that

that company chooses to be in music. UM. From there, I moved into media and tech and I did a series of companies. I ran content for MBA three dot com, which we took public in the early aughts. UM. I then did a SAS company with Mike Jones, who runs a very well thought of incubator here in Los Angeles called science called user Plane, that we sold to a o LL. I ran marketing and content from for my Space if you remember that. Uh And then UH I was on the management team of Maker Studios and it

was you know, which we sold to Disney. That in and of itself must have been quite a journey. I had to tell you. Disney is a really amazing company. It is like, you know, the way they tell stories UM and and not just you know, on a screen or on a box, but thinking about the brand, the

entire brand life cycle of storytelling is incredibly powerful. UM And being from UH I grew up in southern California, I used to go to Disneyland every year for my birthday and and and so there were days that I would pinch myself as I was sitting there on the corner of Dope Drive and Mickey Ev or maybe it's Mickey Mickey Drive and dopev I can't remember. But you know, it was truly a great place, you know, to be in. You're actually seeing a number of those Disney executive as

disruption occurs, doing things that are very innovative. Right. So you know Ben Sherwood who ran Disney Media Networks as a new UM coaching and sports startup called Mojo, which were an investor in UM and you know, Kevin Mayer is obviously doing some things that are quite you know, intriguing as well. Um, so it actually did quite quite

enjoy my time there. But um what I what I learned both from from Maker and from Disney, was that I felt that this trend of creators being able to build businesses and all the things that we've just talked about earlier day was only going to accelerate. And that's what really attracted me to U t A. I started thinking about, well, if there's a platform for digital creators, there's probably a bigger platform for all creators, all talent, all thought leaders, all speakers. Uh and what could be

the most exciting place to do that? Uh? Well, U t A. You know what surprises me is just kind of the amount of ambition, which, of course, you know, people that that make it in Hollywood are never short of ambition. But the I think just the sense of like business literacy, the idea that oh I can I can create a company. I can create a company that will then you know, kick off returns that can help my effort to provide clean water in you know, in

another country. I mean that the the connectivity that that and and as you talk about the power that talent can wield to accelerate things, to bring you to bring things to market. Now, UM, do you ever I would imagine that that there must be times when you have and again not not not as super specifics, but there must be times when people want to bring you ideas that you think, you just this isn't going this isn't going to fly, or we this this, we just there's

not going to be the market support for that. Do you ever? Do you ever ever have to have tough conversations with people sometimes about you know, what realistically is a business and maybe what is more like a hobby. It's normally the first conversation that I have, UM, and what I found is that, UM, my colleagues and you know, our our clients really respect that, right. What I what I tell them is that what is you know, my

goal here is to build spell equity value. The mission statement of my group is to build equity value for the agency in our clients. And um, we do all of this market coverage with all this information. We we you know, all of the things that are having with trends, and we will tell you what we think is. You know, when you're rowing downstream and when you're rowing up stream, and then after we have that conversation, what I will say is that I will help you however I can.

I will support you iever right I can. I just want to be I want you to be informed on what's happening within the market so that you can make informed choices. Sam, I so appreciate you taking the time to talk us through and kind of give us your thoughts about this marketplace. If things are changing so fast, the companies are reorganizing, the you know, business models are changing,

streaming services are launching every month. What why don't you wrap it up with a couple of like sort of top line trends that you think that are on the horizon for the rest of this year. Okay, So, UM, I was thinking both about COVID trends and post COVID trends UM and so during COVID, there there's been a number of areas that have accelerated. UM. We talked about a few earlier on But I'm gonna add fitness as a big category, and I think that media companies should

really be thinking about it as a content category. Right, So, if you think about a business, we're an investor in a company called Echelon, which is a a mass market connected fitness company. We have bikes and rowing machines, and we think about the amount of time that those consumers

spend in front of a screen. Those mirrors are you know, are another distribution channel that's correct, right, um, And also think about the network effects around fitness, so particularly about coming like Strava right with with literally over a million subscribers.

What wellness and mental health is a category that continues to accelerate when I think a number of people are having whatever referred to as PRETSD where they they you know, they thought twenty nineteen was was great and sucked and now that they're they're thinking about being out five nights a week. But I often I have this thing, you know, I can't wait to go to parties. So I remind myself how much I hate going to parties, and and so I think, you know, there's there, but they're being

a little cheeky about it. But I think there's good. There's gonna be real kind of stress you know around that, and that's going to be a big category. UM. Food delivery and the shifting of how we consume food has been a big, big growth you know category for us, right. Um. And then I think as as an investor, what we have to think about is within all of these categories that we talked about, what is the pull forward versus

the systemic change. So a lot of content companies in in Q two and into Q three saw big bumps because people are at home and they were looking for content to consume. Right, is that a systemic change or did it pull forward and then it came back? Right? Um? Also think we really I think there will be a great desire for people to connect. And I'm I'm very confident that I think live and many facets will come back quite quickly. But I think it will be generational. Right.

So if I was a live you know, if I was betting on the live music category right or investing there, I'd be thinking about probably leaning younger. Like then when I talked to my friends who run sponsorship for the Philharmonic, that might be a little bit slower, right in terms

of you know, you know, you know coming back. Um. So those are those are some of the areas, and then we could talk about you know, cryptos, sports, betting, creator tools, fan engagement, all of those are also kind of big growth areas, but areas that we were focused on before COVID and continue to focus on today. M H. Thanks for listening. Be sure to leave us a review at Apple Podcasts. We love to hear from listeners, and be sure to tune in next week for another episode of Strictly Business