"The creator economy gives, and it can also take - suddenly. That's one lesson behind the abrupt exodus of talent from the esports and marketing company FaZe Clan last week. Building a business led by an influencer or celebrity can make you a boatload of money. Just ask the teams behind Kim Kardashian's Skims or George Clooney's Casamigos tequila, which both crossed $1 billion in value."
"But starting a company where the product you're selling is the influencer - such that you make money primarily from their social-media reach, content, or ability to do brand deals - can be risky. If a YouTuber or TikTok creator loses popularity due to a scandal or a sudden algorithm change, the revenue dries up. If they become burned out from posting or simply decide they no longer want to work with an intermediary company, then poof!"
"That's the situation FaZe Clan appears to have found itself in this week after all six creators its website listed as its talent roster announced they were leaving the company in separate posts on X (formerly Twitter). Company investor Matt Kalish, who cofounded DraftKings, told Bloomberg that the current financial structure of FaZe Clan is "unsustainable" and he had offered talent the option to go independent or sign deals with his company, HardScope, which they declined."
FaZe Clan experienced an abrupt exodus when all six creators listed on its website announced departures on X, removing the company's most famous talent and their millions of followers. Companies that monetize primarily through influencer reach face revenue risk if creators lose popularity, face scandal, suffer algorithm changes, burn out, or choose independence. Investor Matt Kalish called FaZe's financial structure "unsustainable" and said he offered departing talent alternatives through his company HardScope. FaZe Clan plans to lean into esports revenue streams such as league participation, player transfer fees, and IP licensing. Influencer-led business models can generate rapid value but carry concentrated talent risk.
Read at Business Insider
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