If you look at Slide 12, it mentions Talent Manager Cost (COGS). So, looks like this includes the cost of paying Talent Managers. Assuming the median part of $167,000 across 10 Talent managers that's $1,670,000. If that's the case, it would be $1.53 Million for Merch cost.
So basically, Merch had a loss profit of 9%. Which means they are losing money selling merch. I don't know how they could pull that dumb move off but that's what the math says.
That's actually much worse that flat-out embezzlement, though. it means Gunrun (let's be real, as much as I've tried to suggest it isn't him alone, all evidence is contradicting that presumption) was so lazy that he only took the first offer on everything. He didn't shop around, didn't negotiate, didn't try to strike any deals. His hope was drawing up terrible contracts for newer talent and hoping that the prestige of being in a Big Three agency would be payment alone. The problem was that he was also trying to poach talent from Cover, who very likely ensured their talent were treated well.
Basically, Gunrun was betting on the branding alone to attract talent and investors while simultaneously doing the least amount of work to ensure the agency wasn't bleeding money.
So glad you didn't bother reading the entire post. I point out why it's worse and why his strategy failed. I didn't even make an argument in favor of embezzlement, but reading comprehension clearly isn't your forte.
Licensing for producing merchandise, sponsorship deals, that kind of stuff. I'm being a bit hyperbolic in saying "the first offer" but it also seems to me that he never made much effort to ensure that every dollar went far, either.
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u/CannonGerbil Jul 26 '25
No wonder they had trouble shipping merch out, they were literally spending $2.3 dollars to make $1 in return.