The Man Behind BIG Licensing Deals in CPG | Rhett Silverstein, Hegemon

Speaker: 00:00
Welcome to Shelf Help. Today we're speaking with Rhett Silverstein, founder and CEO of Hegemon agency that represents manufacturers, brands, retailers looking to grow their branded businesses through licensing, collaborations, acquisitions. Rhett started his careers and as an IP attorney, moved into the agency world as a sports agent for a bit, spent time at an Omnicom owned agency, is extending corporate brands into new product categories. Rhett and I actually met via the Angel Group, which is a pretty awesome angel investor community, really focused on the CPG space that's become pretty well known in the CPG world. But yeah, maybe just first off for the listeners, uh Rhett, maybe the ones that aren't as familiar with Hegemon, let's just get a quick lay of the line just in terms of kind of the bit more into the origin story and kind of the why behind the agency, types of clients you represent, types of deals you work on, and then uh we'll go from there.

Speaker 1: 00:48
Yes. Um well thank you for having me. Uh I've been listening to your episodes and I'm really impressed with who you have on, so I'm flattered that you asked. Yeah. Um, and I'm happy we intersected through the angel group um and found each other fairly quickly. Yeah. So I I guess to give you a quick background and and you covered some of it, you know, I've I've been kind of at the intersection of IP and consumer products my whole career. I think probably before I even started my career, I was always fascinated and very passionate about inventing products. And I think probably my dream job when kids were growing up thinking about, you know, uh pro sports, I was thinking about uh, you know, tinkering in my basement and and creating cool inventions. And so I've always been very product-centric. And I think that's, you know, probably one of the big reasons that I ended up being in the consumer product space, representing some, you know, incredible companies that are doing all different types of products and and and pursuing all different types of retail. Like you said, I started my career as an IP attorney. I was really papering a lot of these deals, mostly, you know, brand and talent deals, whether that was licensing, JVs, and you know, traditional endorsement deals. But it did seem like the agents were having more fun uh than the lawyers in these deals. And so I jumped ship. I was a sports agent for some time at a big French company called La Gardère. I I worked across a few different sports, and I ultimately launched their global MMA representation business back in 2009 when you know the UFC was the fastest growing sport in the world. Moved over to another agency owned by Omnicom at the time that specialized specifically in brand representation and extending those brands through license agreements with different manufacturers who had capabilities in specific product categories and distribution in specific retail channels where the brand uh had a right to win. So I spent a long time knocking on doors of different manufacturers, really pitching them on whatever was on my menu of options at that time. And my, I guess, aha moment was more like a groundhog day because it was over and over and over again in these meetings. I would notice that there was never representation on their side of the table to really, I guess, pursue licensing or brand partnerships in a strategic way. And what I mean by that is starting with what they're trying to accomplish and then having access to the full IP universe of options and really understanding what, you know, really what IP was out there and available, and then determining which one was the strongest fit to get them from point A to point B. The second piece of it, of course, was the fact that in most cases there weren't people in the room on the manufacturer side that were particularly well versed or experienced in negotiating these deals. And there are a lot of moving parts, and what would end up happening is that they would be looking to me to kind of really map out the deal terms, which is kind of a scary place to be when at the end of the day I'm I'm representing the other side at that time. So ultimately I decided to have take some action, I suppose, to uh level the playing field. And and I looked around them, really was no agency that was meaningfully representing the other side, which is wild, right? Like if you think about other industries where agencies play an important role. Like, could you imagine if real estate didn't have buy-side brokers? So that's really what I set out to build with hegemon. My goal back in 2014 when I hung out my shingle was to create the leading agency representing the manufacturers or the licensees in in these deals and to build a diversified roster so that I'm working across every island channel of retail and really being their hired gun to really understand each client's business and and and help them build an IP portfolio and leverage the strength of other brands and and and IP to uh to help them grow in in different ways. And I really do think that's the elegant way to go about it. If you're going to leverage third-party IP, it shouldn't be based on who knocks on your door. And and so starting with the manufacturer, their current business, tail, you know, headwinds, tailwinds, exactly, you know, exacting strategies that are really based on what they're trying to accomplish, and then having access to the brands and talent and and IP that's out there, and and so that you can actually intelligently prospect and and go with the strongest option that's available. I think that is a a really, really important thing when you actually look at the risk ratio between the manufacturers and the IP owners in these deals.

Speaker: 05:48
Yeah, that's a great RV. That makes a lot of sense. It seems like you try to stay fairly under the radar. I figure there's maybe a reason behind that. Am I right?

Speaker 1: 05:57
I feel like uh I feel like I'm the Batman of uh the kind of brand partnerships world. I like to I like to be behind the scenes and you know, we are behind some really epic deals, and and you know, at the end of the day, there can only be one star of the show, and and I I like that to be the client. So we're very discreet. And there's you know, uh also kind of a commercial reason why you don't necessarily want to scream from the rooftops every time a license agreement is signed, and that's because you your your your client, our clients are are really looking to step into the shoes of these brands and represent themselves as these brands within their category rights. And so it it detracts from the authenticity if the consumer is you know acutely aware that this product is not actually coming from the brand. That so there's so much licensing that happens really across retail. And and and I think part of the mystique is the fact that uh when a licensee is doing a good job, it really does feel like a product that is coming from the brand itself. What prompted you to join the angel group is out of curiosity? Yeah, I mean, really, because um I'm doing so much work in that ecosystem that they invest in. You know, they're very focused on, you know, food and beverage and wellness. And, you know, some of our greatest success stories have come from that space. And and what I I like about it is that it's not just a place to deploy capital as an angel investor in in categories and verticals I'm very, very familiar with. And so I hope generally I'm making good investments with my own dollars. But I also have, and and this is this is already happening in just you know a matter of months of of being part of the group, is you know, the the I think the added bonus not only for myself, but also um the companies that we're investing in, is that in in in most cases, they they can directly benefit from the services that hegemon offers. And so it may be that I have already been working with a company that the angel group then invests in. And it can also happen in the other direction where I learn of a company, I invest in it through the angel group, and then ultimately cultivate and you know an agency relationship with that company. So I'm really helping my own investment grow by lending the services that you know I do all day long. So there just seem to be like a really, really good fit and and synergy there. And and some there's gonna be some really cool things already coming out of that that uh are still very, very you know, early days and confidential. But uh I'll be happy to come back and report, if not, you know, publicly at least to the group.

Speaker: 08:46
Love it. That's awesome. Yeah, I'll keep my eyes, my eyes and ears peeled. To kind of summarize brands and manufacturers that you were sitting across the table from before Hegemon, they never had represent representation on their side of the table. And you like, I don't know, one or two real-world examples of you might call it the negative impacts you saw because these brands and manufacturers didn't have someone on their side of the table.

Speaker 1: 09:06
Well, yeah, of course. I mean, first of all, I already alluded to the fact that the manufacturers are the ones that are taking the line share of the risk here, right? I mean, they're willing to take the risk because it's very hard to build a brand from the ground up, right? Brick by brick takes millions of dollars of marketing and and you really never know if you're actually going to break through and reach that kind of critical velocity. Licensing provides that kind of shortcut or that back door where you can you skip that whole process and leverage a pre-built famous brand. And when I say brand, that could be that could be a famous name and likeness from a celebrity or nowadays influencer or creator. It could be a a cartoon character, it could be a sports property. Really, what I'm alluding to is any type of valuable trademark that uh that would be really brandable in a certain product category. Really, the the danger that any manufacturer runs is the fact that there is a pay-to-play component to these deals, in that any brand worth anything is not going to pat you on the back and wish you luck and hope that they get a royalty check one day. You know, they're gonna really want you to have a business plan and they're gonna want you to guarantee a portion of that business plan. Uh, you know, there is a cash component to these deals. And and more importantly than than the cash that you're risking to work with a brand, it's it's your it's your overall business, right? You're also having to take that brand into your category and not only make the product, but sell the product and distribute the product and market the product. And you want to make sure that in that process, even if you're successful in doing all those things, that you're still profitable after you factor in the expenses and the and the royalties and such. So you really want to be make sure that one, you know, you're betting, you're making the best possible bet. No one has a crystal ball, but part of it is just knowing what your options are and analyzing which brand, you know, really has the best chance of moving the needle for you. And the second piece of it is you want to make sure that you're not just getting the right brand, but you're getting the right brand on the right terms. And and if you're not negotiating these deals every day, there's a chance that, you know, you're gonna leave you're gonna leave something on the table that you didn't need to.

Speaker: 11:27
Yeah.

Speaker 1: 11:27
Um, and and and so to me, you know, uh, if you're not if you're not doing this all day long, you should find somebody who is doing it all day long and uh and let them guide you through the process.

Speaker: 11:37
Ghost was one of your first hegemon clients. Um you helped them create a partnership with Warheads, which I think turned out pretty well to say the least. Yeah, tell me a bit about how that deal came together.

Speaker 1: 11:48
Well, I mean, there's a whole backstory. Uh, you know, the the the founder of Ghost, Dan, and I met at uh our previous employers. He was working for a very big sports nutrition company um that also ended up uh selling to Keurig later on. And I was working still at uh that Omnicom agency that was representing a different IP for for licensing. And at the time, I was representing Blake Griffin, the basketball player, who was interested in getting into some nutrition products. And so I had Dan on speed dial, and I was, you know, ringing his phone off the hook to see if we could put something together with Blake. And, you know, finally, you know, finally I I had a sit down with Dan and he really gave me an incredible education on the sports nutrition industry and everything that's been tried before, you know, brand and talent, and and really outlined quite a few failures in terms of how to take outside IP into this particular category and and make it work. And one of those things that really seemed to have promise and then fail over and over again was, you know, just really branding nutrition products around uh a person. And so ultimately we didn't do any business then, but we did cultivate a friendship and ended up starting our businesses fairly close together. Mine was in 14 and he was already working on some things in 15. And I remember he was uh he he came into to my office at the time, which was a sublet single office on a big, you know, a building in on Broadway in New York City. And he sat in front of me and he basically gave me his vision for Ghost and that, you know, he had identified, you know, a strategy that had never been done before. And it it did actually happen to be a licensing strategy, more specifically, a co-branding strategy. And and he needed he needed my help. And so he described to me, he said, look, everyone's selling these these powder products in GNC and and trying to make them look as delicious and sound as delicious as possible with these generic descriptions, whether it was, you know, sour watermelon or chocolate chip cookie. And and and what if we could be the official brand partners with the biggest candy and cookie brands in the world. And when everyone else is selling a generic chocolate chip cookie protein powder, we're the ones selling it with Chips Ahoy. That's a powerful thing and had never been done before. So, you know, with some convincing, I ultimately decided to take it on. I mean, I knew that you know, Ghost was really had wasn't on the map yet, and and so it was gonna be difficult to talk the talk these really big brands into sharing packaging with a small brand. That's always a challenge. And then on top of that, you know, sports nutrition did have a level of stigma to it just in terms of the ingredients. And so we there were very foreseeable headwinds, and we experienced those. What made warheads the right deal? Uh, well, mainly they said yes because we we needed a guinea pig, you know, we need a proof of concept. And, you know, props to the warheads team at Impact Confections and their agency, you know, they they took a bet on us, and and Dan executed it perfectly, and it really blew the rock the roof off of GNC. And it started to lead to other brand conversations with other very, very big brands. And, you know, over a period of years, we ultimately rolled up, you know, a six property deal with Mondeleese across Sour Patch Kids and Swedish Fish and Oreo and Chips Ahoy and all the other great all their great properties. And uh, you know, and and then you know, well, I can either say the rest is history or I can I can take you through it.

Speaker: 15:41
Start with warheads, then it was you mentioned Chips Ahoy, Oreo, Sour Patch Kids, Swedish Fish. Like, well, I'm um one question I had was you kind of answered it, but it's like, what was the the good fit, what did the good fit checklist look like for who was felt like was the right partner? Yeah.

Speaker 1: 15:56
Uh well, you know, collaborations now are happening in all different product categories, and and the right fit for for one brand is not necessarily the right fit for another, even in the same category. What what I think Dan did a really good job of is he really knew the identity of of his own brand, even though it was young and and and really not particularly well known. He he knew what what Ghost stood for. And he was taking uh a category that had traditionally been a very bodybuilder-centric and turning, you know, introducing a brand that stood for lifestyle and work-life balance, and you know, not taking it too seriously and and speaking to that wider audience that's just looking for something better for you and and a way to experience some of their favorite cookies and candies from childhood in a healthier way. Um, and so he he identified his audience and then we leveraged the brands that stood for that nostalgia and those flavor profiles that work really well in in those product categories. Um and he he said to me, I I have to I have to give him credit on this one too. When we signed, when we signed Mondelez for some of those cookie brands, he decided that the formulas were gonna actually include real pieces of Chipsahoy and real pieces of Oreo ground up into the protein powders, but that meant that the product wasn't gonna be sugar-free anymore. Right. And we're gonna have to represent that, you know, even in small quantities, some of these, you know, frowned upon ingredients were in these products. And I said, doesn't that put us at a huge disadvantage with these other brands that are marketing zero sugar? And he said, if if you can't have any sugar in your diet, then we're not the brand for you. It's okay. There's alternatives, but I know out, you know, the folks that are are gonna buy our product are buying it because they really want that authentic experience. Okay. And they're and and so what I learned in that conversation is that you don't need to be all things to all people to win as a brand. You need to know exactly what your audience wants and you need to give it to them. And I I just thought that was a really, really interesting learning for me and that I've carried forward, you know, uh, and and and I've seen it come to life in in other cases. But that was a really interesting early days conversation where I think knowing your audience is a is a huge piece of it. And and that helps me as as an agency partner when my job is to go out and find you the strongest possible IP to execute on your strategy, right? So the better the client knows their business and the more, you know, the more strategic they are with the rest of their vision, the the better I can, you know, the better job I can do to help supercharge that with the right IP.

Speaker: 18:54
Totally. In terms of deal economics, from what I know, I've done a few of these deals in my previous uh company I built in the cannabis space, and it's definitely a pay-to-play business to think generally the brands asked to build projections, you know, sign a two-year, three-year deal. Often, usually there's some type of minimum guarantee, whether you make a sale of even one product or not, you owed some guaranteed minimum every year. Give me just kind of a high-level breakdown of the key variables involved in a typical deal and what the numbers typically look like, as much as you can share.

Speaker 1: 19:20
Yeah. So uh I love this question because I'll tell you how it should work, and then then I'll tell you how it typically does work. So, you know, the question I get all day long from clients is how much does that how much does that license cost? And, you know, it's funny because the way it should work is they should tell me how much it costs based on, you know, their their rock solid forecasts. And we should be building the proposal right off of a real a real business plan with with projections that are tied to something. In reality, you you'd actually laugh at the percentage of clients that say they delegate the entire thing to me and they're like, you know what? We love the brand, we'd love to take a shot at it, but it's a you know, it's a black box, right? Um, you just tell us, you know, what what's it gonna take to get this license? And and I can never answer that question, you know, with with you know, with absolute certainty, because it's not an open marketplace. You can't comp shop the way you can go buy a house and know what your neighbor sold for. And so these deals take all different shapes and sizes, and there is a negotiation to it. There's some art and there's some science in terms of, you know, well, I I guess what one of my heroes, Donald Dell, who who really started the the this the first sports agency that that represented tennis players, he he wrote uh he wrote a great book called You know, Never Make the First Offer. Unfortunately, in in the licensing industry, it's always incumbent upon the licensee, the manufacturer, to make the first offer. And so that's that's always like task number one for me. And as I said, most of our clients say, you, you handle it. Like you come up with the projections. You you know, tell us what you think the royalty rate should be. Tell us, you know, how the minimum guarantees should should lay out, and and also let us know what other key terms we should include to kind of mitigate our risk. And so, you know, really, you know, that there is a little bit of an advantage in in that I am doing this all day long. And so I do have I do have a sense of where deals can get done in in in certain product categories. And the other thing is I do a lot of repeat business with the brands I work with and the agents I work with on the other side.

Speaker: 21:38
Yeah.

Speaker 1: 21:38
So there's also, I think, it it tends to be a smoother ride when you've you've also worked with the other side on on many occasions. And the the whole key is when you're coming from our side of the table, is put the most compelling proposal on on the table that you can without giving too much away so that you can create the right, you know, floors and ceilings. throughout the negotiation. Yeah. And really, you know, trying to turn a disadvantage into an advantage by writing that, you know, writing that first offer, include, include what you need in there, right? And and then, you know, hopefully there's a there's enough wiggle room to make a deal.

Speaker: 22:16
Yeah. And I at a high level, I understand that it's it's not a an open, transparent market where it's free close and there's not a big, you know, ability to to comp and get look what the comps are. But as over the years as you've been doing this, have the economics of these deals generally trended in one direction or the other? And if so, like more to the benefit of the brand and the and the the licensor or more to the benefit of the manufacturers and the ones that you represent? Or maybe it's just remained pretty steady.

Speaker 1: 22:42
I mean look, I don't have perfect visibility into every deal that that gets done. I will say I think uh I'd like to think that the the deals have gotten more favorable for the licensee since you know since hegemont has come into the picture and we you know we we really take every single deal seriously whether it's you know big dollars or small dollars. We want to really make sure the client's protected and there's definitely some pro tips in there that are kind of go beyond the the numbers in the deal and and really get into some of the some of the other really important I guess safety measures that you can put in place so that so that clients clients can mitigate their risks as much as possible.

Speaker: 23:26
Yeah. I'm a bit curious about the difference between what you might define as a more straightforward straight up you know licensed deal versus something that's a bit more looked at as more of a co-branded collab type thing. Like how do you view the differences between two between these two? Where's the crossover? Yeah what are the kind of key differences?

Speaker 1: 23:43
You know the truth is is that in in many cases a a collaboration uh which is really just a term of art you know um a a a co-branded you know partnership versus a traditional license which is a a mono branded product can look exactly the same on paper from a deal terms perspective. A lot of these collaborations are structured as as license agreements. Some are not certainly you know there's freedom of contract you know parties can negotiate all different arrangements based on what they're looking to do together. But I would say in in most cases the ones that I'm working on are multi-year agreements where my client is looking to grow their own brand and and root by cross-pollinating audiences with you know different uh collaborators that hopefully are bringing more people under the under my my client's brand under their tent uh and and that's really a very it's a very cool way to leverage licensing in a in in a in a different way right so like traditional licensing is a company that makes X, Y, or Z. They make luggage and there's only so much space at Walmart for luggage, right? So who it comes down to who has the strongest brand on their luggage. They're all sourcing it from the same factory in China. It's just who has the strongest brand that you know works for the Walmart consumer. That's traditional licensing you know and we we've had a lot of success you know doing that kind of work and including that that example where our client is now I think in year 10 of a license agreement with Wrangler which is the biggest lifestyle apparel brand in Walmart and their our client's goal was to to grow a a a branded luggage line at Walmart. So you know sometimes the the answer is obvious. Other times you need to get you need to get more creative but on the co-branded side on the collaboration side I you have to do that same exercise except what's cool about that is one you even though you are paying licensing fees to use other IP you're ultimately throwing equity in your own brand because every product the primary brand will be yours. And what you're and the other the other fun thing is that you know a collaboration strategy almost by definition is one where you're doing multiple collaborations because you are trying to reach different audiences and each brand that you're working with is bringing something else to the table whether it's a different flavor profile or a different demographic or even you know a different retail account. So a lot of our clients are going in that direction at all different stages of brand growth. And we also have many clients that are taking a dual approach where maybe there's a a really strong brand that makes sense as a mono brand as a standalone new brand in their portfolio. And at the same time, you know they're building they're building their own brand through these these co-branded collaborations which has really become just a really a proven blueprint for success these days if you do it the right way.

Speaker: 26:42
Yeah. You mentioned most of these deals are multi-year deals I'm curious about what the actual SKUs look like. Are there are there sometimes where you're doing initially more of like a you know limited edition special edition limited time offer where maybe the deal is a bit shorter to kind of test the water see how the market responds and then if it seems like it's got good response, yeah the two parties will look at a more extensive longer term deal or is it pretty much always making a long-term commitment right from the start?

Speaker 1: 27:07
Yeah I mean there's a place for those buzzy LTOs and a lot of our clients and and and and ghost is a is a great example of of of one that does a great job with evergreen like evergreen skews that you can get you know 365 and then sprinkling in you know seasonal drops or limited editions going going just for the the limited edition like the Kith play those those arrangements I think make more sense when both brands have already scaled and they're really just trying to do something buzzy for their audiences. Where in most cases our clients are leveraging collabs it's really to put their own brand on the map and that takes more time and that also needs to generate more royalties in order for it to be worthwhile for the bigger brand to even take that risk. So I will say um for at least in terms of like really what we're working on is helping our clients scale and and drive brand awareness and trial and usually those co-branded SKUs end up being the long-term bestsellers as well. So it it it can really drive you know long-term revenue but there's always a place for those limited drops and sometimes if a client is working with a portfolio they'll use some brands as their you know kind of pillar everyday SKUs and then you know sprinkle in um you know the the make ribs once a year.

Speaker: 28:36
Yeah who actually typically owns creative direction on this and and ultimately who has really final sign off and say yes you know from at least from a say packaging and label standpoint as an example yeah who has that final sign off and says yes we approve this is good to go.

Speaker 1: 28:50
Yeah well if you're asking about in the context of licensing the the licensor the brand owner will will always have final approval final approval over anything their IP is attached to um and and in often cases they'll have a style guide or or some some type of some type of kind of guidelines for for the licensee to follow so that it's not total guesswork. If you know what I'm saying like if if the licensed IP can't can't make contact with you know your brand it needs to be placed over to the side like sometimes that'll be or if you can't change the color of this that'll be in the style guy. Well you know it's a partnership you're you're you're working together with this brand to make sure that the the packaging looks good for for for both you know the licensee and the licensor but you ultimately do need to get that final approval to go to market from the licensor. In a in a uh in more of a brand building joint venture where let's say a client of ours partners with uh a celebrity and and we're going to start a brand from scratch and the brand is not going to be the celebrity's name it's going to be a new brand and my client's gonna obviously run the business and make the product and sell the product and then the talent is hopefully going to promote the brand but at the end of the day the brand is new and and the IP around the brand is new. Well that gets a little that gets a little more complicated right you know then then it's uh sometimes co-owned sometimes it's owned by the talent and then licensed into the new co as operating the business there's different ways to set it up but those are more those are more complicated more complicated deals where there really needs to be a big size of the prize because you are still building a brand from scratch and you're relying on on the talent to really put it on the map.

Speaker: 30:42
One another thing I was curious about was underpriced undervalued IP yeah when we chatted a month or two ago you told me about the Teddy Ruxpin example where I think a client of yours under art this IP you built the brand with some technology and did I think it was like an infant toddler toy and end up being like the the toy of the year in like infant toddler category. Yeah.

Speaker 1: 31:02
Yeah yeah that was a while back I think they they won toy of the year in like 2018 or something like that. Yeah I will say you know reviving reviving an old legacy brand is uh it's a big undertaking but it really can work if you if you do it the right way and and I think doing it the right way is is having I think it's it's looking at telling the story of what this brand meant to consumers back when during the heyday but don't I wouldn't I think the mistake could be relying on that nostalgia exclusively because kind of by definition when you're bringing these brands back there's a whole new uh generation if not multiple generations that you need to market this to and win with in order to build a sustainable business and they may have never heard of the brand. So so I think really the the secret sauce is is leveraging the nostalgia and the authenticity of this brand that once existed in the category to those people who you know know it and and and missed it but also having you know uh the other side of the barbell figured out which is what's your marketing strategy to consumers what's your what's your proposition to consumers that have never heard of it before. And so you know Teddy Ruxpin was one where it you know it it was a toy from the 80s a talking teddy bear that would tell you stories and sing you songs with a little cassette tape in it. And and I think you know my clients did a great job of trying m trying to modernize that and make it into you know a cutting edge toy that had an app with downloadable stories and LED lights and and and it did it did a great job and obviously the industry uh recognized that and and you know I know since since we're we're mostly talking to a a CPG audience I mean you know we're seeing we're we're seeing like success with this strategy all over the place. It's just it's difficult to identify and unearth and secure rights to these brands that have gone away for a while but like Coca-Cola for brought back Mr. Pibbs this year that was a brand from the 1970s and you know that's not a great nostalgia play. I don't know how many people are still around that were drinking Mr. Pibbs so they had they have to kind of rebuild the brand for the the modern day and so I think they added some more caffeine to it or whatever. They brought it up up to speed and it's it's the fastest growing beverage in 2026. We have a client that's trying to do that same thing with Joe Cola. You know Joe Cola was the first energy drink ever right and it was irreverent and and they bragged about their slogan was you know twice the sugar and all the caffeine right that's not going to work with today's consumer. No even the people who remember Jolk don't want to drink that anymore. So you know it you have to kind of dust it off and reimagine it. And you know so now it's coming back in you know several flavors you know as a modern energy energy drink that you know uh holds up against the other set of you know better for you energy drinks and and and it's got a marketing campaign that looks backwards but also looks forwards and and I think that's really the way to do it. Our client another client of ours is bringing back Certz mints and and you know I mean I grew up on CERTs but you know if you ask if I asked you know our our our 20 year old babysitter she has never heard of it. And so you know there needs to be a dual strategy when you bring these things back and and some of it has to do with the product formulation and then you know the other piece of it has to do with the with the actual marketing strategy.

Speaker: 34:47
Totally. On the flip side in terms of these say tier one bigger name celebrities when we were chatting I think you mentioned to me that oftentimes when one of your clients wants to do something with one of these A-list names oftentimes they want to be an owner often can can lead to actually setting up kind of a new entity to being formed to reflect some of this shared ownership.

Speaker 1: 35:03
But I'm curious like what yeah what what is what do these kind of deals typically look like what does a realistic ownership split like split look like yeah so so so that's a good question and and they really can look so different from one another it really has to do sometimes with just who's representing the talent on the other side you know the the talent talent reps don't necessarily know what they're looking for in a deal they just know to ask for more and so it's really important that when when you're the manufacturer in these deals who again is still going to be the one putting in the capital is still going to be the one building and running the business day to day I mean you need to make sure that you're getting enough out of the deal and and that uh and at the same time you're creating enough upside potential to to motivate the talent partner. And but you know when when we talk about these kind of joint ventures between a manufacturer and and and uh a celebrity it's not just two partners coming together and deciding on the equity split. Yeah of course that's part of the negotiation but a lot of times there's still a big check that's cut. There's even you know sometimes royalties on top of that. So you've got to have a pretty strong stomach to go into some of these things unless unless you know unless you you're lucky enough to find a celebrity partner that really just wants to build this business and and it's not it's not a money grab. It's uh it's it's really a partnership and and there's some great examples of that and and really those are the only ones that that work. I mean there's a whole graveyard of celebrity brands that have have died because they're only doing the minimum marketing deliverables that you negotiate for and and that's never enough. And what you want is you don't you don't want to have an ironclad contract that holds the celebrity's feet to the fire. You want somebody that that that you don't have to monitor you want somebody who's going above and beyond because they really believe in the brand and and they want it to succeed and I mean I'd say you know Jennifer Garner deserves you know her flowers you know with once upon a farm and you know she she really saved that brand she didn't start that brand and and you know now look I mean everyone's made a fortune you know you know with the IPO and and it's a it's a great case study to look at I think totally yeah totally agree.

Speaker: 37:34
I guess for before we close out I'm curious I'm curious in terms of how you typically structure deals at at hegemon because I think you told me you don't young entertainers yes I'm kind of curious in terms of like why that is and then how you typically kind of structure your engagements in general that's kind of a win-win for everyone.

Speaker 1: 37:48
Yeah I mean it's it's exactly that it needs to be a win-win for everyone and what I love so much about licensing and and even even the other types of deals we put together you know if there are these the these more complex JVs that we were talking about you know everything's tied to sales and whatever IP is is in that contract is going to be utilized on the product itself. So you know the the kind of notorious unsolvable issue with endorsement deals where you're just paying somebody to give your product a thumbs up is that you can never actually measure the ROI because even if your sales go up you're not really sure it's because of that. You know you're doing a lot of different things to try to grow your sales what's what's great about licensing is that you're using this third party IP on your products and so you can measure how much or little it moves the needle down to the penny because it's based on sales. Is this brand on my product giving me a lift or is it not? And and other you know and as long as you negotiate the deal well enough where you're not actually coming out of pocket if if it's underperforming, you're really cutting royalty checks to the brand based on performance. And so there's a vested interest from the brand because the better the product sells which is the better our clients do, the better the brand does. And we get compensated that same way tied to sales so that you know everyone's rowing in the same direction and trying to build a successful sustainable business. And so you know taking retainers from clients and you know I I'm not I I rather than put that those dollars into the best possible license that they can secure.

Speaker: 39:31
Sure totally yeah makes sense that totally makes sense. Well yeah Rhett this has been awesome it's been super insightful in terms of how all this all these deal structures work um I know you again you try to say three under the radar but uh if if anyone does want to get in contact with you maybe it's a you an IP holder licensor that has an interest in in chatting with you or whatnot it's what's the best place for people to get in touch with you.

Speaker 1: 39:50
Yeah of course I mean I'm not I'm not on like on the socials except for LinkedIn but you can yeah I have no problem with you you know providing my email address and and and and website and yeah please please reach out if you if you have a a brand that you're looking to extend into new category we represent you know strong manufacturers that pretty much touch every product category and and if you're if you're trying to build your own brand or your own brand portfolio and you'd like to have more access to kind of the IP world you know reach out and and we'll see if we can help you.

Speaker: 40:24
Awesome. Sounds good sounds good I appreciate the time has been awesome. I think that's the pod

‍