Group Black's Pre-Asset Commitments
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Sam Parr shares a story about how Group Black cleverly positioned themselves to acquire media companies by first securing massive advertising commitments.
"Group Black saw an opportunity after 2020 when major ad agencies like WPP committed to spending a certain percentage of their budgets on black-owned media companies. The problem was there weren't many black-owned media companies at scale.
So Group Black went and talked to Procter & Gamble, WPP, Interpublic - all these huge media companies and said 'commit to spending money with us and we're gonna help you deploy it.' They secured $500 million a year in ad commitments from these companies.
But here's the interesting part - they didn't own any media assets at the time. Now they're out there trying to buy companies like Bustle, which does about $200 million a year in sales, and they're reportedly in talks to buy Vice. They basically secured the demand before they had the supply.
They went to Blackstone or some other private equity firm and said 'Hey look, we have $500 million of commitments, partner with us to go and buy these 5 media companies.' It's like a guarantee that they're gonna have increased revenue. It's basically like a coup where they saw this opportunity and pounced on it in a really big way."
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.