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The Daily Wire's MasterClass in Failure
Jeremy Boreing botched negotiation with Steve Crowder is a MasterClass in how NOT to negotiate a multi-million dollar deal with talent.
MY THOUGHTS:
Steven Crowder shouldn’t have taken his contract negotiations public.
The Daily Wire shouldn’t have outed themselves and publicly discussed their offer.
The deal the Daily Wire offered Steven Crowder was horrible.
‘You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals’. ~ J. Paul Getty
To understand the ‘Steven Crowder vs Daily Wire Saga’ is important to understand that first and foremost Steve is ‘talent’ - i.e. an actor, comedian, and writer. He got his start in Hollywood at the age of twelve as a voice actor for the children’s television series Arthur and acted in small roles in The Covenant (2006), Greek (2008), and To Save a Life (2009). With his acting career on life support, Crowder was hired by Fox News as a contributor in 2009 and stayed with the network until 2013. Crowder then began posting political commentary and comedic content on YouTube and by 2016 had more than 170,000 subscribers. In 2017 Crowder signed a deal with CRTV aka TheBlaze to produce the Louder with Crowder program.
Steven wasn’t in a position to demand much from TheBlaze when he cut his original deal but it is safe to assume that between 2017 and 2022 he ultimately made millions of dollars after growing subscribers by over 3400% to more than 6,000,000 on YouTube alone. While I haven’t seen his agreement with TheBlaze it is clear it contained multiple onerous terms that Steven would never agree to now. For example, there are over 300,000 subscribers who paid around $30,000,000 a year to see his exclusive content on TheBlaze - and yet Steven has no ownership of that list. It is estimated that TheBlaze was generating around $50,000,000 a year on Crowder with sponsorships and ad revenue. With production costs between $3,000,000 and $5,000,000 a year, Crowder likely cleared about $2,000,000 to $3,000,000 last year - about 7% of what TheBlaze made.1
With his contract with TheBlaze ending in December, Crowder began talking to various companies about a new deal - a deal he assumed would be his BIG deal. Reportedly the offers he began fielding were NOT close to what he had expected. There is a reason that creative people like actors hire agents to negotiate their contracts—it is all but impossible to have an open and creative relationship with someone you’ve been in tense negotiations with. By October Crowder was at the end of his rope after receiving, what to him, was an offensive offer from his friends at The Daily Wire.
Jeremy Boreing, Co-CEO of The Daily Wire provided Crowder with a term sheet that proposed paying him $9,500,000 per year net of production costs (about 19% of TheBlaze’s estimated gross profit). The term sheet also included a number of terms that would have significantly reduced that amount in various circumstances if they weren’t negotiated out (Jeremy has indicated that he was willing to remove them as part of a negotiation process - an admission that proves he isn’t skilled in direct negotiations with ‘talent’).
UPDATE: Robert Barnes had a great take during his podcast with Viva Frei pointing out that the term sheet was a missed opportunity to show Steven how The Daily Wire was going to help him grow his brand. Instead, Jeremy blew it explaining how he was going to exploit Crowder.2
While $10 million dollars a year is nothing to sneeze at, Steven Crowder knows that his brand could generate as much as $100 million dollars a year if properly monetized. The only question is how much of that he deserves.3
So what is the disconnect? Like Steven Crowder, Jeremy Boreing is more of a creative type than a businessman. He fell into The Daily Wire after a relatively lackluster career as a screenwriter/director/producer and pastor. Today The Daily Wire aka Bentkey Services LLC generates around $100 million in revenue. The addition of Steven Crowder to the company could likely double Bentkey’s revenue. The problem is that Jeremy and his partners might be out of their depth when it comes to exploiting the opportunity Crowder presented the company. It isn’t clear Bentkey has the scale or experience to handle Steve Crowder’s career. But it is VERY clear Crowder lacks the scale or experience to exploit his own brand on his own — he needs a partner.
The BIGGEST mistake Jeremy made was sending the term sheet to Steven in the first place. Under the circumstances, Jeremy and his partners should have invited Crowder to their offices to understand what sort of revenue Crowder believes he could generate. They needed to find out just how big Crowder thought he could get - and of course attempt to understand how he planned to do it. Presumably, they would have their own ideas to complement Crowder’s and together come up with top-line revenue potential. Then and only then should they have discussed a fair split of the profit - would 80/20 be fair? or maybe 50/50? Sitting together in a room (no tape recorders) they should have had a meeting of the minds before making an offer.
Steven Crowder’s BIGGEST mistake was not engaging a talent agency to handle his career. Turning his life over to a company like The Daily Wire or TheBlaze is likely a mistake as they don’t have the capabilities of Endeavor EDR 0.00%↑ with revenues north of $5 billion. Steven is an actor and he needs the sort of representation that can shield him from the sort of hamfisted offers he fielded from companies like The Daily Wire and TheBlaze. Talent should NEVER handle their own deals if they want any hope of having an open and creative relationship with their employers/partners in the future. Steven needs a talent agent - period.
As for the back and forth between Steven Crowder and The Daily Wire - they’re both in the wrong. Steven was hurt and decided to rail against the ‘system’ by publicly discussing the confidential terms of one of the offers he received — he didn’t name the company or the size of the offer but most people in the industry assumed it was The Daily Wire. There are a million reasons why this was a mistake.
Inexplicably, The Daily Wire decided to out themselves and defend their offer publicly. They attempted to shame Steven by revealing the $50 million contract value. Presumably, they assumed this would eliminate any of the sympathies for Crowder — and to some extent they were right — but they should have known Steven would respond — and he did.
Both Jeremy and Steven succeeded in generating millions of views on YouTube but they did so by putting their individual brands at serious risk. Proving the point that he’s more of an actor than a businessman Steven escalated the drama by releasing an audio recording of his negotiations with Jeremy. While he may have felt better he only succeeded in making his future negotiations with ANYONE far more complicated.
At the end of the day, both Steven Crowder and Jeremy Boreing gave the world a masterclass in how NOT to negotiate a deal. The deal Jeremy offered Steven wasn’t great (I would argue it sucked) and Steven’s response was likely a reaction to ALL of the offers he was receiving - not just The Daily Wire offer. If they’re smart they’ll meet in a neutral location over coffee, apologize to each other, and count up how much money they made on all of the drama. Steven needs to get an agent and/or a CEO and Jeremy needs to stop making offers directly to talent. They’re each running 9-digit businesses and it is beyond time for both to grow up…
BONUS
So what does Joe Rogan make on his brand annually?
Spotify Deal (for the JRE - non-exclusive)… $100,000,000 per year (+bonus)4
UFC PPV Commentary… $2,000,000 per year (+/- based on availability)5
Comedy Shows/Tour… $20,000,000 per year (+/- based on no. of shows)
Product Sales (Onnit)… $5,000,000 per year (+/- based on current $30M revenue)6
YouTube Content (ads and sponsors) $50,000,000 per year7
GRAND TOTAL: $177,000,000 Gross Revenue
Based on Steven Crowder’s current reach compared to Joe Rogan’s (assuming his brand was equally as well exploited) Steven could expect to make $113,280,000 or 64% as much as Joe.
It is estimated that TheBlaze generated $44,000,000 a year in gross profit on Steven Crowder while he cleared approximately $3,000,000.
All numbers are estimates from sources in a position to know.
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@amuse (formerly Politique Republic) is a newsletter dedicated to the political issues facing America from a conservative viewpoint.
I think your suggestion of getting in a room and having a face-to-face conversation makes the most sense of any idea I’ve heard. It seems like a lot of talent and companies aren’t interested in that sort of vulnerability though.