Everybody sovereign approach. As this week's enery absurd is, while Julia alexander joins me, we talk to lee trunk, the ceo phase, client, if you haven't, phased plan, probably means are not a teenager. Phased plan is in all in one eastwards. Merchandising influence, sir marketing agency. Explosion of a company is one of the most interesting platform based companies around. It is a cultural phenomenon. It was started by a bunch of sports players. Lee was the president of capital records. Came honest, ceo he's, using a lot of the models of how to build the record industry for the new influence for marketing world leaders.

Also just a super interesting guy. He was really honest with us about the challenges and opportunities of a new business like this, I'm just going to drop you right into it julian I talked to him and I want to commend him. He answered our questions and we asked a lot of them check it out. Le trinket, ceo of faze clan support for this show comes from american express business if you're a small business owner, you want to partner with someone that can help make your day to day a rewarding experience. That's where american express can come in american, express business cards are built for your business with features and benefits like the ability to earn membership, rewards points on select cards, the power to pay for big business purchases and twenty four seven support from a business specialist built for your business. Amex business terms apply, learn more at american express dot com, slash business cards.

Support for the show comes from gold peak real brew tea, there's the time of day about an hour before sunset, where the rays feel warm and the breeze feels cool. But the hut hour of golden bliss is always gone too soon. He may rekindle the the feeling, with a pot of gold peak made with high quality tea, leaves it's smooth taste transports you to golden hour at any hour gold peak tea, it's got to be gold Joy, Alexander harry I'm good, we trick or the ceo co owner bays clan. That's right! how'd you decide to capitalize z, I didn't do It- I wasn't around when they decided to do it. It was the kids that started phase gained at that. Did it it fino it's the same care.

The founder of the original thought founder in a phase temper tommy to true drew the phase. Logo thing thank god he did a great job and that action really cool guy that be updated to kids, decided like like most about face claim the kids decided at an inn. I showed up late to the party. Do trying turn into this. I already deep and what sort of the start what is phased plan? What is basically, Finland is a gaming organization. That's real! That's re split up into two parts: there's the part that is the buzz word of twenty nineteen of of e sports, which is competitive side and. In a where we have, we compete in six different games, we'd get six six teams. They make up about half faze clan members about thirty. five or so of of our of our members, and it is this, in part which is content creators which

in a were making youtube. Videos were streaming on platforms like twitching and mixer. Whereon snapchat were on doing I e stories where we create content that is about gaming or it's gaming adjacent there in other things that really to your kids. two gaming were bore or people that are into gaming and just their interests as I spent spent several years, trying to explain to people outside of gaming that they should pay attend. And two gaming, and they should pay attention to what to what's going on. utilised for east sports as the tippit at spear, because it was it was hot topic. But now what I would I start to reposition it for people is talking about gaming. His entertainment gaming is lifestyle which is even harder concept. Grass right, like I think there was like you were

The moment of like wait. A second people are being paid to compete in the video games, like you will make money on it. Like that's a thing right, So, ok, now everybody knows that's a thing now. The thing that Then I'm explaining is that this is actually a culture. This is like this is like the law. Style that surrounds skateboarding culture except bigger. I compare it to hip hop and I'm not the only one have done have I've I've had conversations with really significant. People from the music business who also made that same, comparison, because in the same way you know him, was a genre music and when it started, that's all people thought it was, but is actually much much more and people built they identified with that with that lifestyle, culture and they they built their lives around. What that with that me, and that's what's happening with with gaming. Now gaming is your eye, I say it often that gaming is

dr cultural lifestyle for this next decade for sure, probably probably beyond, but that's it that's it that's a thriving most people don't really understand what ethics a break it down a bit further. Have a really interesting way of explaining phase. You have a three pronged approach, which is that phases like the lakers, it's like mtv and it's like supreme, so break that down a little bit for people listening who are still like. I get that people get play video games. What is phase right so so that sort of the lakers part right like lakers, are competitive, basketball team. We are competitive, esports organization, we have teams that go and they train and they show up to tournaments and they compete. For you know four, four trophies and for fur for money, in a so that that's the compares esa through line there. The the comparison, the supreme is that we are also in apparel brand and we're going,

branchy out into other consumer goods and supreme, is, is specific and that your supreme is the definition of that high beast model. And we behave like that. Our apparel behaves like that. We ve had individual clothing drops where sold nearly two million dollars worth of were worth of apparel. In one day you that's close down part of so how a few weeks ago that was yet we did that was around fortnight world cup. We had a pop up so how? In an odyssey, we we works floored by that reaction. In other words, thousands and thousands of kids that showed up. We know the car. We were begging the cops to just let us stay open for an hour so that the kids could come in and meet the guys in it was. It was incredible, and so we we command that type of X, men around our apparel and and there's the mtv comparison and there's two capone

to it. So we we make content on an essay the daily basis that reach a lot of fans are our colleague active social media footprint is is well over two hundred million. You know and the consumption around the content is somewhere around five hundred million views a month. It's like a cable network and the other part of that. That comparison is. Now about mtv now necessarily but mtv in its heyday, really spoke for that generation and they really defined what that enormous, really Jen acts at the time with what they were into. They were there. They were their voice.

And that's how I view faze clan, we are the voice of this current gaming generation. We we uniquely understand them. We create content specifically for them and at the moment it is. You know, on the on the platforms like youtube and twitch, and, and you know and snap, and Graham, but that's the beginning. Where we're not limited to the platforms, we can make content of any different length as long as it's authentic, we who we are and as long as it's something that appeals to our to our audience. I want to dive into platforms. There's nothing I like talking about with me. It executives more than how we will defeat the platforms too but you actually were in the music business you're. The president capitol records you've worked with some of the biggest artists in the world. How did you end up as a ceo of a bunch of video game players so about four and a half years ago, somebody that worked for me brought me the idea and showed ass. She showed me an article about the

the goal is mainly about the future shape of the league of legends finals, and he the suggestions, what you think about us going to manage a team or teams you set it at the time we sort of how little even understood back then comes the said, teams will manage teams and- really set us on the path, and I started calling well that I knew within it, but it was really wi me who is involved in eleague, and I ain't because of the His business. I had some great context there and I said: hey I'm interested in this space. Can you can agree to your guys and they eventually The media to face glad and we started was. I was really started as an adviser, and then I had people that worked for me, full time that were working on phase and then as the history exploded as I started a really understand the breadth and depth of what phase clan both was and what it could be

and I made the decision to close my my music management company, because that's what I did after capital I had to. I had my own management company decided to walk away from from that business and go do this full time, so it was was a first move. You show up, you dont have a bunch pop up stores, you don't have a house full of teenagers streaming. Video games right now, you're this empire, but you show up and it's a bunch of kids playing video games. What's your first move to we're to make money if the first move is really trying to understand, what's going on every an end, and that was no small feed and it gives me sympathy or empathy to other peers, from the traditional space. In terms of how hot It is to understand the difference between what the entertainment business has been for whenever seventy five hundred years, which is dealt with platform changes. and this new audience. This is there's a it's. It's a sea change in the way

these. These fans want to consume the kind, and in what their relationship is with with a brand like faze clan and really hard to understand that, because it doesn't fit into the knee, little boxes? The people have a tendency to want to put it in. They want to say always like this or it's like that in it's a little bit of this a little bit of that and then a little bit of something that's never existed before and its combination, and then so so the key for for enough for me was how do you? How do you turn it into a business? We started bringing in it's it's, you know I've, I've ever then that I'm running with gregson echoes the present company in and also luck luckily, for All of us? The same way I come from a cultural business, he he came from the fact in a fashion business in a calm, and so we also. We had a unique past experience in which I understand that there is a delicate balance between culture and commerce that it's not just about

egypt pudding in his many cash registers as you can in between the output of the brand, and and the consumer, or the fan it's about, creates about having a a delicate balance in which you know you don't overly commercialize, it you're better off under commercializing it is at least in the front end, and it doesn't mean that you know it Ok to make mistakes, and certainly we ve made mistakes but walking that tightrope between You know preserving what the fans love about it, which can smothered by over commercial aviation in that's, look we're still we're still wrestling with that. Without balance, what was the easiest money that you made I'd like to see us like. I came into the business. I like looked around Iraq. What the hell is going on- and I was like- oh you, gotta do- is flip- that switch and, like we'll start making some money. What was the first Switchfoot

the the I would say, the apparel, the apparel was the was really the low hanging fruit because we were at the merch we we weren't doing words with selling enough a pal, and, to be honest, still not selling enough apparel we're moving slow rather move slow and put leave me On the table then go too far, start to you know, took to hurt them. What do what the impact of the brand as a mean that that drop? We know that we did with was literally color ways like that. The champion collaboration that we did not was there was a navy, blue and heather gray and two million bucks in one day. And, to be honest, so I wouldn't say that we expect that the the first surprise I had was the first champion drop, which we did a year ago. We did black friday a year ago and we were just to give you sense of the fact that we were

I too understand how big the brand was, that first drop, we did the, but we did black and read and we were bathing, leading up to what we were saying. I will how many should we make them the team was like we should, because we wanted to sell out. We wanted to make sure it was exclusive and limited and we wanted to sell out and so that the merch team was like we're going to do three hundred units and then set the talent push back were like you know what? Let's do a thousand units? Okay, we're going to do a thousand units. I tried you know, I'm home in you know in new york for thanksgiving and we're all getting ready, because you know it midnight midnight midnight on thanksgiving that the site goes live so that thousand units in under two minutes- and we just said- keep it going, call up champion see how many they have. Let's keep it going, tell them to turn it off when when they're done, they turned us off twenty eight minutes into it. We sold. You know six hundred and fifty thousand dollars worth We were shocked, but that's also part of this exploration, because all of us

things are new. We don't necessarily know what the appetite is of our fence and where we're learning that. So it's it's interesting to me hearing you, you come from a point. You come from a more traditional entertainment space where you're beholden to sales international investor Yours and doing that, and a lot of this is new to you, but a lot of it and I cover youtube. A lot of it is old, for you to this is traditional Mart sales. This is traditional like this is this: is there monetizing para social relationships assessing are not beholden to investors and behold into my audience? Liking me that is sell, my my teachers. What did you learn from the kids come up where they're going now? We can do a thousand, because we know what it's like when you came into it well again you're gonna have a keener understanding of the relationship with their with their with the audience right first, while they ve been in it. Years when I've when I have now at this point, I been there for you been in for a few years, but seen it.

these guys. You been in now nine years into this brand and you know lot of. It was list into what they said listening to what their concerns are pushing them where I thought it was, but with safe to push them and expensive too. testing things out with the audience that that it's ok, the mistake. I mean. That's that's been that's been part of it is we do The brand is strong enough that we can make some mistakes. You know we don't want. Make a mistake again, it's it's always better disorder, interplay, your hand, then overplay your hand, but interesting about the brand right and is that it's made up of individual talent and people are fans of those individual talents, and so it's not like saying I'm a fan of NBC the mixer and shows it's I'm a fan of banks, I'm a phase, I'm a fan of rugs and who are too popular people on

the faze clan team. Something happens this past year, where you have the most popular streamer in the world, a guy who goes by t fu, who is on phase for awhile and all of a sudden. There is this, this storm of controversy and people are going. What do we do about phase? What do we do? t food, we support phase. This is something that is relatively common in the youtube world. It's what try twice drama channels exist, but it would have been for you. I imagine coming in in kind of seeing what this chaos can be like now there, a law suit involved. I was hoping you could walk us through how you're dealing with everything going on with the case right now. Yet when there is a fight on the real world and mtv. That's my am I read, and I always I want to be like when a fine in the real world, they also each other and unlike make their own drama channel alerts about that. Rightly that's new, like europe actually in the real world. So It I'll say a couple of things: one is it that's so new for me, because in the record,

Some have artists, the sioux labels here and it's it's. It's not uncommon, emmy, let's say fighting with the label really common suing label? Much common, but it exists and is something that I've I've I've been up. I've been a part of on both sides right on the are, you know on the label side and the artist side, so it didn't feel that far and to me, as far as the ground rules right, there's some fun mental ways of of how you conduct your especially when it's under public scrutiny, that's really important, and so they were, there were less to borrow from that, I think that part of the I think that even know might have been common in you to the drama they weren't. I, the lawsuits were or common and I think the reason why, with such big news and gaming, it was really the first one- and here you have- it was the perfect. It was perfect for everybody bright, maybe, except for us, a hum where you ve got.

should the titans you have the biggest gaming org and the biggest nato. The biggest gaming stream are the biggest pro in the world in a very public, very ugly, ugly fight, and you know everybody, and it was at the right time when YE sports was really buzzy term, and you know that they were start to be global news, so everybody commented on it and but I would say a lot. Is you know that this not uncommon in basketball, football and by the time the third one, it won't be global earth shattering news right. This was the first one, and so it was really big news. And we'll. It also happen to be the wit. The way they did. It was a particularly ugly way

and then what happen afterwards. I think, if you so good, a colombia, sorry, cattle being sued, most people a capital, be told not to tweet about it most true it. It would not be public discourse from company representatives right after the losses. Nub. There was a very explicit, lengthy thread from faze banks who, up until very few but few a year ago, was the face of faze clan and this kind of it people feel like they are entitled to streamers and youtubers because of that relationship and because they feel beholden to that. So this comes everything gets messier, really quick, and I want to know what it's like inside that house, when you're having things and going. How do we do? Do you tell them not to tweet about it or you like change your name to a symbol like prince yeah and look it's a real challenge. Cause, emotions are running high and there is this.

need to defend right and it's. It is part of youtube culture, and it's difficult to balance nature of that culture and some any emotional response that banks as having with short of what we should do strategically as a business. What is the best thing to do now happens to be in this. That, I would say, banks falls into the EU. There are two things that happen. One is there have been moments where I've had to talk to him or somebody else or where, as him just with a plea of please put the phone down, just put it down just No, when you look at it new media, you can't help yourself because you were upset your understandably upset, but we need to be measure we need to be coordinated and how we're going to tell our story because with something that was that big we had really there were. There were two of two different pools there was

the social community, but there was also the traditional media community and both were coming at us. and there is a way to deal with in this, waited to tell you a story on social, but the result is. There is somewhat of a different way that you need to navigate the traditional media world and to balance that stuff, and while this is happening, you guys are out trying to raise investment capital here phase do what what are those conversations like we're trying to say? We are proof national gaming organisation, entertainment organization. We wanna do bigger things, bigger companies. At the same time, you have the biggest schuman, the world filing lawsuit and the face. phase clan going off on twitter in a way that is common with wrappers is common with youtubers

The taylor swift, common with taylor, swift as throw that one out, but I feel like trying to position phase as a gaming organization, a professional one while this is happening must have been difficult, yeah, it's it's it's difficult, You know why I'm I'm also a realist about what are the computer, that make us great and it is banks, his passion and the way he puts it out, like everybody, knows whose reading what he's, what he is saying that guy's not scripted he's not notes he's not do anything is pouring it straight from his heart through his fingers and out into social and something incredibly powerful about that, and so you know if where did say to me. What would you rather have you rather have you know somebody who is gonna, pour it all out and caught and create sometimes something that's a little bit messy or not. Have it

get messy, because that's the real deal and ultimately What part you know! The reason why they face claim is so popular is it's wards in all with us right, and I think that it look. I looking back the incident with teeth who was? It was a turning point for the company, the company right for you about the brand, adding more so for the cap. But even then the brand, and I think the way we conducted ourselves the transparency in which we spoke to our audience directly and it was ass. It was it was rude or you know it was you my office was was warm room there were we wits teamed in there. We were talking strategy paper, but ultimately, What we would what the ultimate decision, the overarching decision is. We are going to talk directly to our fans and we're gonna tell them the entire story. And in an that's what we did that when you a lawsuit, different lawsuits, you deaf law since you're, not one on social media,

so you know an and look it's part of what makes it comply because whatever you're gonna say and social media deal certainly could come to hide you in a lawsuit, but for us, the the relationship with the fans takes paramount importance to what with the lawsuit we know what happens with the lawsuit, although we plan a winning lost yeah. I mean you you're, like a da that was a day, I remember when the last year we're going to win the lawsuit. It's really hurt. The relationship events is also an interesting thing. I want to talk about one other phase member, possibly, I still think he's still a face member, but he moved out of the house and we have to talk about Jarvis yeah cause cause it's a jarvis for people who don't know it was a professional fortnite player.

He was banned, for what I would argue is a misdemeanor, but let's see he received a lifetime ban. The thing is the thing that the reason why I call it a misdemeanor is because faces is a powerful, not just organization, but company. When this happened. I would love to know what the conversations with epoch were. Like is a popular player living in a twelve million dollar mansion, whose streaming, who generates millions of dollars and streams and gaming tournaments, so that precision? So what else is he? Actually? He aspires to be a professionally he's, not he's not. He wasn't signed as a professionally resign as a content creator, and he did not make it into for night. Well couple they came really close on, took it with brutal tough, it was, but I think it's also important to be sensitive to epochs issues. You know. Do I feel like it was. It was a bridge too far,

I do it's this their decision to make not ours, we respect their rules, but I am sympathetic to a seventeen year old kid who, who doesn't she during a competition he makes a video who he book believe This is gonna, be an entertaining. Video doesn't hide anything it doesn't, you know, is not something that was done in it in a dark corner of room. This was something that was done in bruges, further listeners. What what did he do? They got him, and so he, he made a video there is. There is a there, was a weight at taste to basically hack Lee. You know the the fortnight game with an aim bought and it's it's. It's outlawed he's. Basely said this is what it looks like when you, you know when you, when you use a program like that, and even says he says during the video. Don't do this and get banned immediately and his one of his mistakes he may be made made. Several of them was

Thinking. Well, if I do it and some random account, not my account. Well then, if that count gets shut down, it doesn't matter it's a seventeen year old kid again. You know I am hopeful that with time, maybe things will change, but We we support Jarvis. While we we don't, we dont support what what he did. He certainly contrite about what he did he's posted a video about it. He was transparent about it. Are you still having conversations with epoch, you're, saying you're hopeful in time? It'll change? Are you guys talking to sweeney and the team over there where we are gently trying to continue the conversation, but also it's important for us to be respectful and look we've got. You know we we it's not a matter of like throwing, wait around or anything like that. It's about looked at this whole thing is new right. Where were you did you know? Gaming has been around for a long time, but this law will this this public scrutiny, the volume of of-

have gamers that are you know that are playing the attention that we have. This is all new, so I think it's important for all of us to be open minded to kind of tread carefully and, to you know, and to to you know, light life It's long and so well and the other thing that's new, and this initiates personally close to my heart I covered a lot, is a lot of content creators, youtubers, twitch streamers, feel like they have to constantly be besting their last video right. So it's it's and it's constant output. There is a quote from a new york times article about phase where one of your Schumer says. I spend ninety percent of my time. In my room I just the day off and that's because they have to create content, and you guys are more than an organization you're more than just a bunch of kids, your company and watered the mental health initiatives when you burn out is a major issue that we are finally talking about with youtube and twitch, an undoubted in she white thing duke have mental health resources for it for the players for the accounting critters no, we may wheat, we we aren't we

to them about it we have. Our managers are sensitive to it. We ever are pushing the output level right that the these kids are tat? They tend to be so. Starters, but the reality is weak. There needs to be more awareness for our guys. also for the overall industry and ill, starkly mental health has been not something that is is talked about either openly, and I think we have We- the ability to change that we ve talked about you. We ve talked about what is it, what what? What are phased charities? What are you know what? What is philanthropy look for? Look like for us and we talk about things, It are really key and core to our guys, and we talk about the the you know- meant mental health, health aspects this episode is brought to you by

the fine. That's the sound of switching your business to shop, a fight, the global commerce platform that supercharged you're selling, harness the best converting check out and same intuitive features, trusted apps and powerful analytics his by the world's leading brands. Stop leaving sales on the table, discover why millions trust shop, a fight and bill grow and run their business sign up today for your one dollar per month, trial period at shop, a fight outcome, slash tech, twenty three, I'm Josh mucho host of the pitch from vocs media people describe the pitch as the anti shark they agree. Take everything you think you know about venture capital, start ups and fund raising and throw it out because, on my shout deal here the true story of how these deals get done on our upcoming season. He'll hear legendary investors like charles,

What's it and was within invest over a million dollars in the start, ups featured on our show- and let me be clear: none of this is staged. Each episode of the pitch features real entrepreneurs pitching real investors from real money. Then we go the extra mile to tell the true story of what happens after everyone shakes hands and walks out of the real, listen to seize and ten of the pitch podcast to learn from the smartest investors and founders in the world. besides drop on wednesdays, follow the pitch for free wherever you listen, you in the music industry, like throwing stones, run torn out there in a sell out that stadium, I love them since they're, either old guys, but they can still do it. They could get back together and like they can work their schedule. Is this we are sustainable. Can you be fifty years old, Do a reunion tour fortnight. Can you

Who sell out the greatest heads like. I love where to begin a rights like you, get the underlying assets of other media industries, and we ve got a book, we're going to riot and we're going to sell the book, and that's some generate revenue, even if I don't have to work ten hours a day every day I'm an aging rockstar collect my checks? It? Maybe I'm like you know what I mean produce one more time. When I guess I'm a stadium, is that sustainable for this kind of career? I think we're going to find out. I think that I think it is about evolving with your own it's right. Your audience is getting older and the your audience going through some evolution. You know the difference between what these guys do and what the rolling stones. Who is the rolling stones can play their heads from forty years ago? And it's about a nostalgia moment that doesn't work with us so you, but most celebrities can capture that not necessarily surly fewer and if you're an actor or, if you're, a tv writer you can.

robert nero got de aged he's. Strutting a half hours at a time has got way bluer, but those are the rare exceptions in general, you have to figure out what you're next thing is even as a musician. You have artist do some some type of evolution or eat a week. We tend to refer to it as reinvention, where I dont think its reinvention. I think it's its evolution and I think that it, oh, I think we need to instil that concept with these as with the other thing that they have available to them, is causes away phase. It is a business. You can also evolve from the content creator and being from one side of the camera to the other so you might be able to know their look. I think the one thing that a lot of you, Brazil aspire to be, is x, you tubers night it six, saying that, but, as we know, a lot of heat where he wanted you to the thing is that

actually hit on unleashing point which goes back to your three pronged rule about lakers supreme and am team at mtv. At a certain point, you a job it will be a vj at it and when you're playing professional basketball in the lakers you move on to becoming a manager or coach. Those are your two options. You go behind the camera. Do you worry that, as or you're just rich in your done. That's like another four guys or is already voicing their that's. Why not? If you're, certainly what, rich. Does it gives you the opportunity right? Who gives you flexibility to follow what you're in them it? What your passion might be outside of that, but I think part of what we don't know is: what does it look like? You know our guys the the oldest of our guys are in there like mid twenties right, so we just haven't explored that yet We know we don't know what that evolution is because even our oddy, there really young when our audience,

it's too to get older? What do they want and if it, if our team members can satisfy what that next adoration is of what their current audience wants. Then they are going they're gonna remain relevant. They might be relevant to a different. You know a different side of the demo right now. The demos pretty right, like for the moves you got, assign young players to we signed young thirteen fourteen youngest for twelve yes, our youngest mozart contracts, oclock, it's it's a minor contract its assigned would, with its done with the with the It's his dream! I need to put what about that. You may not be industry among you to come january. First, a new guidelines about what s right and look. We had an incident which, near of teeth, t threw out at one of our guys, is being under thirteen and eager kicked off a twitch and look new. Does that mean we shouldn't sign people under thirteen. Maybe you know this was

really know when we say hi sky due to be honest, it was wasn't a lot of deep thought about it. It was kid? We liked, we thought, was talented. We thought he was exciting and we were like: let's go. Let's do it because Part of the exploration of of What should we be doing? I don't know? Sometimes we have to try and go. Has that feel how does a fit within within we do is earned ecosystem of like entertain. Attorneys who have lived on that on their client side of the deal right like you know, you're you're gonna show up kids, twelve as parents like you and he paid money play video games, price tarzan eyes, but do they have a lawyer whose like negotiate with you six times already, who knows that they should give up all their march rights or all of their likeness rights or whatever, percent of so I think it too, I think, depends it depends on who they use and they're, not a lot of lawyers who were well versed in the space.

but also the one thing about especially minors, the steals or short deals right and for the most part we don't take a lot of rights, here where the good news for us is because we have the brand to commercialize. It's not. We don't have to mean a week we have to rely on the revenue that we take as up a portion of whatever the individual towns is. That's the ito. If we had to, if we had to build the business on kind of the percentage as a man you're, as the brand of of of our talent, we would be, would not be very illustrious business, but that's an as an aspect of it because it we're we're we're providing them with tremendous value. Take take I sky high sky, his first instagram post was. I join face today. Two and a half months later he had over a million flowers. We helped him create a real busy

in his at his business, to run on sponsored person with him and that's his business right. We take, we take a vague, we take twenty percent of the brain deals that we bring in, but that's his business. Those are his. He brings his own brand deals and he doesn't have to pay nope. That's not true, because we, you know if he brings on brandiles part of the reason. Why is able to get a deal's because using in phase clan and have had this conversation directly with with the talent not in his easy chair but without with our other talent, where they're, not kids there, their adults and I know and I'll have an honest conversation with them and say, and I will say I believe if you bring in a deal, if you get a deal directly, it is partially because of your pr spatially europe your membership in phase clan? And so I think, even if we don't bring it to you directly, we ve provided when percent value- and I would ask him directly- do you think the brandiles you get? Are they,

way per cent more lucrative, because a phased plan forget about whether they would be walking the door or not, but for phased plan, but are they more valuable so that open to question about this situation were currently on which we will deem the creator wars, which is what working happening, I love workers that are not actual workers. Creator work for more right, and this is also a platform. But what we are seeing is a lot of people decide if they want to take a deal and go to a company like microsoft, mixer, twit, amazon, switch Google you tube, relaxing to name youtube is now trying to get into it as well. If someone comes to a popular phase, member and let's say it's mixer and they say well can be ten million dollars stream exclusively on mixer does phase get a big portion of that and, if not, what can they walk away from face if they go? You know what I want to walk away from this entirely and I want to take this deal. Do they have the option to back out of their contract? If

if your sign to our contract in me, that's what country enable nearby it out, though, can I say I don't wanna be part of israel if they buy out banks. Listen, I guess when somebody to us with their conversation, the answers book if somebody's unhappy and doesn't want to be in phased clan, we were not in oh, I want to put a gun anybody's head, but it also doesn't mean that you get to walk away from the country. May I see that's the tv situation. all they wanted was to be out of the contract, which is convenient when we helped build. From when we signed em in is total social were four hundred thousand and in one it's time he went to twenty two million, are you guys having conversations with the platforms themselves to do exclusivity deals like have faith had conversation with, and so are you would you? Would you signed to an exclusive every few members to be be only on which? No, I don't think we don't think we would do that. I don't think we can, I think, would be a bad move for us first war. I dont want to drag more players, kicking and screaming anywhere

It is a bad luck is bad idea. I don't want to. I don't want to see a you know, so the seeds of a vow of acrimony, ah come by would we look to do a deal where we say? Ok, we'd we'd like to come in and offer maybe Will that we sign newt mean a newly side. I could see us. Now where we go to a mixer twitter, caffeine in sales. Everybody knew that, once assigned to phase they are not an existing deal has to sign, but then that'll be open. If you be a part of phase. You go into this deal and to me it's all about if you're transparent, if you're open about it, if you're open about the the commercial part of it its business, I mean you know there's when when when we sign somebody to phase clan, there is some cause for what is a cost of what we do to support that that talent theirs in their indirect costs. What we do on the east port side right, which is which is not not a lucrative part of the business

actually it's it's an expense to the business. What wheezed, all that money that we spend on sports helps all of our content creators because it makes the word phase in front of their name make all of us more powerful. So that's an interesting point. I I was going to ask. I want you to respond, saying mark you been said and will mark you been biggest make investor hasn't sports team. He said in aggregate it's a good business exports, but is a growing yes, but domestically here in united states, it's an awful business and for his easel point was that exports works internationally, really well, specifically in the asian regions, not so much in the. U s: work is growing, but it's not where it should be. You guys are possibly exploring asia as scuffle exploration. So talk me through is esports me that you want to grow in asian territories where it is a business. It is a lucrative business, we're going to grow esports globally, we're going to grow the brand globally. We are going to grow the content globally.

in a week. We are the most well recognised gaming work globally, sort of by accident by us moses all. All of our members have just been making content any english and you know not with them with not with any eye towards how do I tap into that asian market? How do I build more asian fast? They didn't even thinking about that they're just doing their thing, you know which is, I think what incredible about where phased plan is now all of the growth has been organic. All of it We don't have ahead of marketing, we'll do marketing we have had a social media? Now, that's not to say we're not go. to do it. A part of you know. It's part of turning phase into being. Fully operational organisation, a fully operational company any worse still, you know

a year ago we were I dunno twenty five people or twenty people now or seventy five and we're still young. I can't hire people fast enough to fulfill that the business demands that I that I need. I think the question on the gaming side. People who are listening are and are very anti sports very into gaming is right. Now phase is not in league of legends or starcraft, I believe correct, looking into developing the asian market Whirling legends is arguably the biggest game. Wist aircraft is the idea, then, to partner with local talent and and and have people working overseas working directly with them. Setting up the steamer houses that are so common in asian markets is that's when you guys want explore entirely where really say we're gonna commit to this. We are committing to global expansion. We are going to be built. on the ground in a lot more countries. In asia in europe, in latin america, where com We are we ain't, a we're, just getting warmed up right that the you know we,

running, we ve been running. Everything were we, we figure, What the hell do you do for the most part right and just trying to down to the size of the brand and catch up. You know it's a huge brand and with a small business that which to build a business into the brand kind of an unusual corner, gee. Normally the brand in the business get to group together, but I theirs out of opportunities, Asia is lot opportunities in the rest of the world. We are countered, if the team is in one of the best counter strike teams in the world with with you know some of the most popular esports players in the world, and we don't take advantage of it properly because we don't have we don't have infrastructure in order to monetize it, but we're going to fix that. So it's funny, you said you don't usually a begging and build a business. I think that's true for most companies in my corner of the world, the tech industry,

that's very common right are you. You got a search engine and all of a sudden you're like Google. I gotta go I guess we're just show that shrug raises until they die that's what they that is common scale story on the tax at other texts idea, and so there, some points of scale here asking about one at some point, you, you, as a ceo, actually have to exert way more control over your sprawling global business. Then a bunch of kids and ass. We are begging start taxed. At some point you have, you know you have to do that. are you saying that already figuring out where those boundaries are and were figuring out, but also on batteries? You're gonna find people and in say, maybe you're. Only unmixed, circus microsoft paid paid to come and I that as an idea like like your area- but I it's not here- I do it right, but what I would

Is I'm going to explore all of the I'm gonna to look towards business practices that can help me create enterprise value for face clan and figure out? What's the right format, but what what what is always the backstop is the audience in the fan base and what's what's interesting what's been a real education for me is you know even though I was present of cap records, which is. Is it has a name recognition the fans dont comment on my business decisions and or business decisions of cabaret mean, with rare exception, whereas the inner the fans really due care, but it in its part of being in this community and so I think that even

the exploration of for conquering new frontiers in and looking at new business opportunities and it's all about beings are sensitive to the players and what and how how it impacts them, and and also in how it impacts the fence which just which makes it a little harder to get to work. Want to get to the next challenge. In scaling, I mean we backed into a media company organization like it was like me, and twelve of my friends started the version that we have a company. I guess he's not exaggerating very confusing situation. I don't really understand it, but you need to have an orange chart. Decide who is going to do? What is your org chart? Look like funny enough. It did, doesn't look dissimilar to a record label

so mick Jagger? Nigeria was ever use all my letters surprise. But but to be honest, I I don't think that's. Cause, I'm personalizing- I think it's because it makes sense, I think, depart mentally? We do a lot of the same, and if you, if you pull the lens back a bit and you know and and almost the subject matter out. What are we doing with this? We are. We are discovering talent we are trying to develop, tell it into being popular, we are trying to make sure that talent has long career and were true, commercialized the talent in a way that doesn't kill the joy that people have fired. That's the same thing that you'd that if I may that statement, you know, and nobody knew my background of what I'm doing. You would know whether I am talking about a musician or whether I'm talking about a gamer. That's the same for the fundamental format.

difference between what we have in cap records is ill, when you sign to face when the day you signed to face clan. You are much more famous than you were the day before and the veto. When you sign it, but records or any any record label. Ye may be your friends, your beer famous, but in the end, the outside world. You just not isn't this out two things. Why record. Labels are not universally blinded by artists right there. necessarily even right now universally bothered by fans. Fans are much more aware of the dynamics between labels, artists, right now Thank you too. I was joking right, that's true, but I didn't brad, I'm prince, like there's a long history of fans being aware that a national labels to the reason they think a famous when they signed, because they hadn't made the asset yet or they had made the single they had made the album. Ok, your players are the set right. That's it's a very different gibbet

I would say, is when you put the name phase in front of your name what we do is we shine of very bright spotlight on you and we bring our immense fan base to your doorstep and so that its the it's the story. how, in a left, when we signed a moose eleven year old kid went to a million, followers on inscribed in two and a half months. Listen week. He we wouldn't have. Not in there, and he wouldn't have got near unless he was compelling personality. But We also gave him stage yet we put him on a stage of our I'll. Tell you this worry about about when we signed him. So we sometimes take our We see talent where there is part of it is not even having a row of somebody in charge of recruitment lightweight its. Ghana, every every which would have it your game. They aren't apart. No, we have been watching you tube important wedge just people who

in the context of sort of their everyday lives and they see somebody or the place they play with some may not like it. With this. Kid is good and that's how it started. You know there was one of our one of our talent managers and one of our founders were like a check get out a. We will talk about an occasional, and then we like ok, let's go sign him in word got out and another org came in and started throwing money around. We have a luxury of you know with our content creators. We we, we don't pay the content creators, we give the content creators a platform to to create a business. That's that's our model and because we can bring so much attention to them, and so you know they had gone dark. The dad had gone darkened and near the kid on stream and we're like china sign him, so we weren't. One of the founder sent sent out to the guy's halo, we're trying to sign this kid. Somebody can go host the stream, The kid abnormally high skate got you two hundred three hundred people watching a stream.

so our guy started hosting the stream went from his normal three hundred one thousand two thousand ten thousand thirty thousand forty thousand sixty thousand people watching this kid stream, because phase clan pointed the spotlight on him, The kid in the middle of the stream walked. Austria put our face clans, shark, and that was in it and that's how in who was lying around we, but that's the power of phase and so it is, you know It is the combination of us bringing our fan pick very on fan base to your doorstep. Coupled with you know us picking great talent right. We ve been really adept at picking people who are compelling great game. His great personality, great entertainers, and that combination is explosive but ass. He strode up cause it cause. I think your answer.

The criticism of the now behind this conversation is fast. It even universe show that so the criticism of the music industry is a huge and beautiful young people. You milk for money, any kicking the curb if I had to describe uncharitable charitably as possible the power of a huge gaming brand. Can shine a spotlight on twelve year old for twenty minutes and then move on. I would say that that would be the biggest risk of that business model. Is that you'll make people stream until they burn out and they'll move on and you'll? You will always ready supply people want to play video games for money. How do you? How do you avoid that? And he will look? You can't stop bird or you can't stop somebody who doesn't want to do it anymore. Did the contract specify explicit at a set of our time that they after minimally stream obsolete number of videos. They have to produce absolutely not in a special. If you're talking about are minors we spend

lot of time with the parents really trying to educate them on the fact that the can't put pressure in these kids. They're going to have inherent pressure they're going to feel it they're going to want they're going to be excited. You know, look happens to be like a kid like heist, guy, I've never seen a kid nonplussed is this by everything going. He is cool as a little cucumber right had ha. That happens to be his personality, but it's really important for to talk to him or his parents are sways. Parents, or you know, are meg his parents, and to to make sure they understand that the kid needs balance. The kid needs to be educated, a kidney. You know that that don't put pressure on him, that's actually going to do more more harm than You know we'll keep it as an opportunity, help and build it, and- and

and support him and listen to me. You know to the feedback so so that kid doesn't have burn out. Introduce honoured came at these their protected by unions that their kids have to work certain that their specific successfully Kid actors can work in what they knew, that that's actors, not musician, but do you think, looking league, as as talent for gaming in sports and strewn becomes a younger and car companies like phase clatter interested and pour in pursuing a scientist. Kids, do you worry about a chance where people and I think of an l, a court and saying we're going to look at protecting kids, who are now working for companies and are generating income for companies and are working they're producing content? I would be totally open to that. I have now many out myself and a minute, if it was because this subject- and I have I have brought it up in in meetings- I have sort of Maybe uniquely position to understand this, because I was a child actor so

really understand. This is the breaking news. I understand some of these data so I have a real sensitivity to it and look anything that protects these kids whether it's coogan law, I mean the dilemma with cooking as long as it's only in new york in l a it should be national that you know, like anything, that's going to going to protect It's also even about kids. A lot and you've referred to your your crew. His kids because only on the old man at the companies not fair but like okay, this makes sense for an eleven year old makes sense for a teenager. You can talk to the parents, you can say be a good parent. You got a twenty three year old. I mean how every sports team in the world from a twenty three year old, they got a bunch of money for being talented, it a thing their parents, don't stop them from making missed We are working to harder burning out a parting too hard for breaking out for their girlfriend and instagram or whatever happened the face

like how do you manage at a time when someone is that something you're thinking relic, I need to have clear, is indeed had always our homes loudly clauses, everything in a morality clauses. There are gaps in a way. there is a code of conduct is not everything We have it, as I am sure that you are if we As a morality clause, but we have a code of conduct So how do you respond something like what in eulogist reference, which is that there's this ongoing drama between phase banks who is facing phase and allegations regarding abuse in the past relationship? Nothing proven allegations, but it's very public. It's all on twitter! It's all! I think on instagram, it's everywhere online. How do you respond? Do you? Do you get calls again from investors who are like what is this story cause now you're breaching that for that is concerning means, I would say in this particular one: no, we did we didn't, but we ve certainly gotten calls for investors about certain things really, when the teeth

Lawsuit happened. We got calls from a lot of investors. We lost brand deals because of it. deals. There were closing or basic closed about large and ages. The brands got cold feet because nobody wants that kind of attention and look. It's part of management, you as somebody who manage artists in I looked. I manage kid right. I was a handful like you that was a that was a crash course in utero managing too complex. It personalities which we have the same, you know let's look at the banks, a complicated personality, but but you know really compelling individuals tend to be complicated and- and you know we leamy, we talk a lot about about you, know personal issues. We do we we do get into personal issues partially. We want to help our guys and we All in all. We want to make sure that our guys are on the right path. Like there

is some feeling of responsibility and to you know to the to the team members and to to each other, like that's part of how we talk about it, a lot it's like we were all inextricably tied right like we're in there. Well, it's like he's for life. For for all of us, and I should be living house together, that's right here in the house. I do not live in and there's another house beside it, you're, not ass. I do now So I ask you what you this several times you ve called them our guys. It's mostly all guys. It's actually guys. Gaming is not, I would say, the most progressive culture, especially in some online games, It is very male dominated it's a bunch of young eyes. Were making mistakes have access to money in,

grandma, like all of the mistakes, are there to be made for the wrong kind of culture to develop. Are you thinking about how you might use this platform uses influenced, actually change it without without a doubt, and I think that you know, maybe first step in the first of many steps, is you know when we signed a walk this summer first theme all too to phase also happens to be a a deaf gamer and a week we have do you know, I think, citing female gamers is really important to us with something we talk about. A lot You know the challenges you don't assigned. Somebody just cause their female right. Like what we want to look for great female gamers fitted. what we're doing- and we know, and hopefully in an even iraq herself is- is who is really

interested in becoming a role model for other female gamers, and so it starts with the first one and its like we don't want to do it as like a stunt We do want a sign and other one is still like its. We we have it. and see to be slow about signing in general, but we need to say more females. We need to sign a more diverse, roster and power. More global outreach also enable us to do that. Are you prepared for cultural issues that arise? I think I think of a bunch of mid year olds in a house together or almighty other all hanging out a bunch of dude sperience gaming and I think of fraternity that never Does anyone is there? He found, I think, of returnees. They think if I was a she's, great she's, phenomenal player, and I think if I was a woman coming it,

I am what I hope is gonna hear if I'm coming into the situation. There is a part of me where my guards media, because that is just society, its life. How do you approach that we are like we want make this person will control, and we also acknowledge that we have this very pro we dynamic, which so the lot of shirts head on and without transparency, that's it it's like and look Maybe this is why I have a tendency to overshadow even in in in. comes as like this, because we can't be afraid of what what is we ve got up. We ve gotta admit the things that we ve gotta do better. We ve gotta, look at where we know we know new horizons to conquer, but we gotta be In the end, we were open with e walk him and her family but a lot of time with with with her and her and her family is really important, is important for them to understand who we are

chile are, which is also not necessarily the same as the persona that exists on my right, like you know, look back he's supersensitive guy, he really is and he's full bravo oh and he's using he's rockstar the guys, like a veto, trust me I speak from experience. When I call on us, like its, he he's cut from the same cloth, a lot of rock stars that I've that I've worked with but he's also really sensitive guys. Really. An emote is an emotional guy which, which also comes through in social media. So I'll ask you to mark russians wine to bachelors tack on a scale things the things you said about, diversifying your roster same thing. Google would say to us same thing: amazon, potato as their mistake was. They started with late right, but they said a lot of the same things and one of the mistakes they made was they didn't actually have recruiting organization built into the company was going out looking for people you just said arrive. We have this right, panic.

Read, this is one of those like you got a scale. You install the hierarchy, unita recruiter! You need a head of marketing, like all our telling people. What to do. Can you preserve that spiro professionalized organization in saying to a head of recruiting ahead of talent. Go find me a more diverse candidate pool that meets meets our needs yeah. Well, I mean we we have to get on with it I mean you know. This is a mistake. The tech companies all mate. No, no! I I and I and I agree like they're like if I could hire these. If I could put the the the the the people in the chairs tomorrow, I would two things are also hiring that head of a job. We have we might hired or we might have iron ore yesterday so ass. I am. I am more breaking news child I I think now I may. Hopefully we close the deal but yeah I mean that's one and that's been part of the obstacle ammo. It's also, challenging biz? To hire people for, because woods interesting is because it so youth culture so

bleeding edge that you know you you have The EU have this kind of the dates sophisticated. You are, as an executive, is sort of inversely proportionate your understanding of the subject matter. and so it's it's search for the sweet spot between people who were grown. they do need more grown ups in there in the in the building, perhaps in the room yeah like people who have not just a majority, but I'm I'm talking about a business maturity. I'm I'm I'm talking about people who really understand how to balance these very complicated issues and eve you sort of depends and what the rules are. Sometimes you lean towards our for this role. I need somebody, you understand the subject matter and I'll have to work on their seasoning verses, some rosy go. This is one made the seasoning and I believe that they are going to I themselves to really learned the subject matter around its answer to my questions.

Why am I so working inside what I would defeat? The platforms So we have to do that. So you world, where most your cousin is distorted by other people's platforms, also the world island in some very sympathetic to it, but you ve got Youtube's rules, twitches rules, yet instagram's rules. Yet twitter is a lot of big companies that have a lot of ideas about how people should make money on their platforms. Yet how are you managing all of that? I'm back to the one day at a time. But do you have a preferred platform? Do you play them off against each other? Do you want to start your own instagram be everywhere? No, I'm not going to compete with instagram, I'm not going to compete with any of those things. Now are there other options that are available to us, that that we talk about, for sure you need a move, your audience to those I may I can do both. Maybe I can I it. Did the exploration of howard, developing the business right like I wouldn't say: ok, you know

in january, first, we're moving everybody to o t t taken everything off the plan that that sounds like a terrible idea. companies doing just sell like streaming service bus, but bus, does my lead. I wanted to point out to you guys, like you, do business twenty percent of that it's my butt Exploring all of these options right. There be an app where you can explore deep, rich world a phase. Maybe we just launched our merch app seen how that is, and you know that my job is only you know, is gonna be more than a merch app. I Does that mean I'm gonna? Take people off of twitch in that probably not, I think that, but where explore, exploring what those those you know, what the different options are. Do you think of the platforms as

marketing opportunity like instagram for many companies is a marketing channel is an extraordinarily effective marketing channel, but they want to own your relationship directly or these revenue platforms or marketing platforms. Some weird combo of both both in the difference being for us. Is our product? Is social media right that the actual things that people consume are the are the promptly underlining product, but there also marketing so but these things are inextricably tied when, when we put out a you know, a an inn, grand post, that's a photo that it can be to things or can be. Multiple things can be something that is content that are fans want to consume. They love that content. I'll, give you an example of something: are fans loved and it was a marketing message, but it was more than that. we decided. We dropped a pair shorts. We came up with we sold shorts for the first time.

We did, it was an animated, is still any behaved from an engagement standpoint like a piece of content right, so people are fans loved the count, and it delivered the message that we were also selling this new product. So it is, you know, use we use social for doesn't need to be. one or the other in in a perfect world. It's all of the above. The same way that when we have brand deals for you know when work of promoting g fuel or nissan ah more burger king when we're doing it right, quoting quarrel, Are we doing it best practices that those content, peace? should stand on their own on their own merits that our fans will watch it and the brand messages sort of incidental to their experience and their it's done, in an elegant enough way that I would watch that just because it's it's entertaining content,

You happen to be telling me a brand message: cool gordy, doing our ghana, glee stream on twitch than the vetoed egos on youtube and out to video, encourages the twitching to german courtesy to beauty with when word rollings, prime ads on each part of the business Poor to the other side of the. I can only ask you're going to kill me. I'm gonna ask you this. I promise for you to ever put that phones on that. I'd. Ask you this question: okay, It's a very beginning, a business? What is an exit for face clamour like us, peo, are you gonna, sell your shit to Google and I don't, I don't think we're going to to google out that I don't know that amazon phase by youtube? I I actually think that there are a lot of potential buyers ver for somebody. Let somebody like because we're in so many different things. I think we certainly could ip. Oh that's! That's that's an unreasonable exit. I think that we could see to a company that owns multiple sports franchises, I think we could say to a media company. I think we could sell

in agency we have assets that work for all of them. I did dinner last night with with friends and what things we're talking about- is a weirdo. About some of the sum of the traditional sports teams and we're thinking these. We're losing young audience right. When talk about tradition, sports and young males key demo, they're losing them they're they're fleeing in droves. That wouldn't be. Interesting to tap. Innovation like ours to take over their entire content strategy in a key to these bans in a way that really understands how they want to be communicated to. So I think this to get farmer, you gotta bring bomber to the clippers the buccaneers eve honours its own phase, mortally machine. I really thank you so much upsizing greenhouse gas region alright. My thanks to lead shrink ceo faze clan for coming on again just one of the most interesting conversations. I've had shown a long time. My thanks also to Julia for joining me

I would have been lost without her. She knows all about this stuff. You can follow her and her coverage on the verge. You can obviously find face Clinton on every platform in the world we back later this week with the chechen back on a tuesday with innovation, we got some big ones coming up, so keep an eye out for those who can tweeted MIA reckless and love your feedback season.