- Jeffree Star, MrBeast, and FaZe Clan all received Paycheck Protection Program loans designed to help small businesses during the pandemic, according to a ProPublica database that tracks the disbursement of the federal loans.
- MrBeast and Star both received loans ranging from $350,000 to $1 million, and FaZe Clan confirmed they had received $1.1 million.
- Representatives for FaZe Clan and MrBeast defended the move in statements to Mashable and said they were concerned about the future of their financial situations and the loss of brand deals when they applied.
- The move prompted backlash from people who argued the money should have gone to small businesses that needed it to survive, not wealthy creators.
- Others, however, said that the government is responsible for who receives PPP loans. In fact, the program has received significant criticism in the past for giving loans to wealthy and politically connected organizations at the expense of small businesses in high need.
PPP Loans to Big Creators
Companies belonging to YouTube creators Jeffree Star and MrBeast as well as the esports organization FaZe Clan all received federal loans intended to help small businesses during the coronavirus pandemic.
The loans were given as part of the Paycheck Protection Program (PPP), which was signed into law under the CARES Act.
Reports about these specific creators were first reported on Wednesday by Mashable, which found the information in a searchable ProPublica database that tracks all the PPP money that has been doled out.
According to the database, Jeffree Star Cosmetics was approved for a loan ranging from $350,000 to $1 million on May 3. MrBeast YouTube LLC was approved for a loan in the same range about a month earlier on April 14. The PPP application for FaZe Clan Inc was accepted at the end of April, for a loan ranging from $1 to $2 million.
“MrBeast and Jeffree Star’s loans are particularly surprising because both YouTubers have built brands on luxury and extravagance,” Mashable reported.
“As thousands of small businesses struggle to stay afloat amid continued social distancing restrictions, YouTubers and other online figures are still able to safely churn out content. Immensely successful companies like Jeffree Star’s and FaZe Clan are hardly the brands hurting the most right now.”
Breakdown of Loans
To support those claims, the article goes on to give a more detailed look at the finances of each company and creator.
Staring with MrBeast, whose real name is Jimmy Donaldson, Mashable detailed the frequent and hefty giveaways the creator often holds.
“[He] frequently gives away cash prizes, cars, and most recently, a private island through outlandish stunts,” the outlet reported, noting that he has been described as “YouTube’s viral philanthropist,” and detailing some of his more recent big charitable giveaways.
In June, MrBeast pledged to split a $150,000 donation to organizations supporting racial justice and police reform as well as several small businesses. As for how much PPP money his company got, a representative who talked to Mashable did not say, but the outlet reported MrBeast YouTube LLC received a total of $377,000.
“Multiple sponsors pulled out of projects, our advertising revenue plummeted by 70 percent, and we had numerous finished videos we couldn’t post,” the representative explained to Mashable. “We didn’t have access to testing, so we also had no idea at the time when we would be able to produce new content. We felt this was the best avenue that would help us weather the storm.”
The spokesperson also said that that the company is different from MrBeast’s personal accounts, and added that “all charitable donations, including a $150,000 to Black Lives Matter and $250,000 to SpecialEffect of course did not come from company resources.”
As for Jeffree Star, Mashable points to the wealth he has accumulated from his makeup empire. In 2018, Star was listed on Forbes’ highest-paid YouTubers. That year, he reportedly brought in $18 million and Jeffree Star Cosmetics was worth an estimated $100 million.
The article does note that Star likely took a hit because Morphe cut ties with him, but that happened after he was approved for the loan on May 3.
Regarding FaZe Clan, Mashable reported that the organization is valued at $240 million and ranks fourth on Forbes’ most valuable esports companies. As for how much money they got, the head of communications for the organization confirmed that they had received $1.1 million.
Notably, the outlet also pointed out that in early April— just a few weeks before they were given that loan— FaZe Clan announced that they had “closed out a $40 million funding round that also secured an exclusive partnership with NTWRK, an e-commerce platform that also works with Nike and Puma.”
At the time, FaZe Clan CEO Lee Trink told Forbes that despite the circumstances, “we are fortunate we are in the right industry for a moment like this, when everyone is turning to esports and streaming, and we are positioned to be bigger on the other side of it.”
In a statement to Mashable, Trink defended taking the PPP loan.
“As a growing business, we continued to expand our staff in January. We are grateful for the PPP loan because it has allowed us to retain 100 percent of our employees despite having to reduce our revenue projection by many millions in esports alone due to the pandemic,” he said.
“It has always been our intention to repay the loan in full and we plan to as soon as it is safe to do so.”
Many peopled responded to the news on social media and expressed anger that these companies had received money set aside for small businesses.
Others also took specific aim at MrBeast, asking why he would take money from the government that had been designated for struggling companies if he had enough personal wealth to be giving away his own money.
“Small businesses desperately applying for PPP loans and shutting down after not receiving it are victims of the actions of Mr. Beast and others like him,” one Twitter user wrote. “He has no right to take govt money and then re-give out to those he deems worthy. That’s simply powerful ppl playing with $$”
On the other side, some people also said that MrBeast deserved the loan because he helps people. Others still argued that these companies and creators are not directly to blame and that its really on the government to decide who the loans go to.
From early on, the Trump administration has received significant backlash over its handling of the PPP loan disbursements, specifically in regards to who has received them and who has not.
When the money was first being sent out, massive outrage spread over the fact that Shake Shack received a $10 million PPP loan, which it eventually gave back. Since then, there has also been anger around other big recipients like Ruth’s Chris Steakhouse, Potbelly Sandwich Shop, the Catholic Church, and the Lakers.
Companies owned by wealthy celebrities like Khloe Kardashian, Kanye West, and Reese Witherspoon have also drawn ire for receiving PPP aid.
Problems From the Top
While some have argued that those people never should have applied in the first place, there is also hard evidence showing tons of issues with how this money has been allocated from the top down.
Earlier this month, a House oversight committee concluded that thousands of PPP loans were given to companies that should not have received them.
According to a report released just last Tuesday by the Select Subcommittee on the Coronavirus Crisis, the Trump administration gave hundreds of loans to companies that did not even fill out complete applications, as well as nearly $100 million to companies that were ineligible for the loans because they had been banned from working with the federal government.
Other studies and reports have found that many large companies got loans before small businesses, who were largely left out of the first round of loan distributions despite needing the money the most.
For example, economists at the University of Chicago and MIT found that just 15% of companies in the areas “most affected by declines in hours worked and business shutdowns” received PPP funding, but in areas least affected, 30% of companies received PPP funding.
Even beyond all of that, there are a ton of problems with the data and records of the loans that not only call into question how the program is managed but also how effective it has been in helping companies keep employees on their payroll.
According to a recent report by The Los Angeles Times, out of the roughly 4.9 million loans awarded as of July, over 550,000 approved applications listed zero jobs retained, and over 320,000 left it blank entirely. Seven loans even listed negative jobs retained.
The Times also reported that many small businesses were approved for loans much bigger than what they actually recieved and that there was no explanation for the discrepancy in the data.
Both Democrats and Republicans have pushed for another round of PPP funding in the next coroanvirus stimulus bill, but without a massive overhaul to the system and increased accountability measures, many are concerned the loans will continue to be improperly allocated.
See what others are saying: (Mashable) (Insider) (The Los Angeles Times)
Triller Sues H3 Podcast for $50 Million Over Jake Paul Vs. Ben Askren Fight
- Triller is suing Ethan and Hila Klein’s H3 Podcast for $50 million, alleging that the YouTubers unlawfully broadcasted its boxing match between Jake Paul and Ben Askren on their show.
- The video-sharing platform previously filed a larger lawsuit against several outlets, including H3 Productions, for the same reason, but a court dropped the majority of the defendants from that suit, still giving room for Triller to refile against each platform individually.
- Triller did not specifically cite when the H3 Podcast aired the fight; however, Ethan gave a statement to Rogue Rocket claiming his utilization of clips from the event fall under fair use copyright laws.
- “It’s a huge media company trying to suppress fair use and undo everything we worked for [with the] Matt Hoss case,” he said, referencing a landmark fair use case he previously won.
H3 Podcast Sued for $50 Million
Video sharing and streaming platform Triller filed a $50 million lawsuit against the H3 Podcast on Monday, accusing the show of unlawfully airing its April 17 boxing match between Jake Paul and Ben Askren.
H3 Productions, owned by YouTubers Ethan and Hila Klein, was previously included in a massive lawsuit Triller filed against a number of platforms for the same reason; however, a court dismissed all but one of the defendants, FilmDaily.com, from that case. The court did give Triller room to refile against each outlet individually, prompting this new suit against H3.
The podcast is being accused of copyright infringement, conversion, violations of the Federal Communications Act, and violations of the Computer Fraud and Abuse Act, according to the complaint filed in the Central District of California
Ethan Klein previously denied broadcasting the fight but did admit to watching an already available pirated link.
What’s in the Complaint?
Triller said that H3 “acted knowingly, willfully, unlawfully and with blatant disregard to Plaintiff’s copyright in the Broadcast by uploading” the boxing match to YouTube. The company claims it “never authorized its respective copying, downloading, uploading, public display and/or distribution of the Broadcast,” but that H3 “continues to engage—and unjustly benefit—from its infringing conduct.”
“Defendant’s calculated and reprehensible infringement, theft, and other unlawful acts—committed in knowing violation of the law—has resulted in damages suffered by Plaintiff in excess of $50,000,000.00, by stealing and diverting upwards of 1,000,000 unique viewers of the illegal and unauthorized viewings of the Broadcast from Plaintiff,” the complaint says.
The lawsuit does not specify when H3 aired the fight, but on an April 22 episode of the H3 Podcast, Ethan did briefly play the knockout from the event while giving commentary. During an April 25 episode of H3 After Dark, Ethan and Hila also played clips of Pete Davidson hosting the showdown. Neither episode aired the entirety of the event.
Ethan Klein Responds To Complaint
“It’s fair use,” Ethan said in a statement to Rogue Rocket. “Read their complaint. It’s 1mil x 50 dollars per [view.] It’s literally a fair use lawsuit and anything else is just a distortion.”
The couple previously won a landmark fair use case against YouTuber Matt Hoss. That case stemmed from the Kleins using footage from one of Hoss’ videos to make their own video response and commentary. Hoss argued this was copyright infringement. A judge ultimately sided with the Kleins, who believe Triller is aiming to reverse the progress their previous case made.
“It’s a huge media company trying to suppress fair use and undo everything we worked for [with the] Matt Hoss case,” Ethan said.
Still, a Triller spokesperson gave a comment to Insider saying the company is “confident” in its legal pursuits.
“We are confident H3 will be settling and paying a substantial penalty (in the millions) in order to avoid the $50 million+ liability,” the spokesperson said. “People can try to joke about it, but it is stealing, no ifs, ands or buts about it.”
See what others are saying: (Insider) (Torrent Freak)
James Charles Breaks Silence Over Lawsuit From Former Employee
- YouTuber James Charles posted a video on Monday claiming he has been dealing with a wrongful termination lawsuit from a former employee for two years.
- He said her claims are not true, but he is refusing to settle for the “hundreds of thousands of dollars” she is asking for because he feels he is being “blackmailed.”
- He claims the former employee is making “defamatory” allegations about him to the press in an attempt to push him to settle for a higher amount.
- Insider reporter Kat Tenbarge later posted a tweet suggesting she is working on the story and that it will come out “soon.”
James Charles Addresses Lawsuit
Beauty influencer James Charles posted a seven-minute-long video on Monday claiming he has been dealing with a wrongful termination lawsuit from a former employee for two years and feels cornered into speaking out about the situation.
James, who has been taking a social media break for the last several weeks following a series of sexual misconduct allegations, broke his silence to share his side of the story. He said this is his first time publicly speaking about the matter because the litigation is ongoing. However, he feels he has to speak out now because he says that the former employee is speaking negatively about him to the press and he feels he is being “blackmailed.”
Reports have identified this former employee as Kelly Rocklein. James said he hired her first as an editor and then promoted her to a producer with a salary of $72,000 a year, but she was let go after six months. He says the allegations in the lawsuit he filed are false.
“It basically alleges that she was wrongfully terminated, overworked, and underpaid, all of which are not true,” he said before adding that to him, his employees are “family.”
According to James, the suit is worth far more than lost wages and totals hundreds of thousands of dollars. While he claimed these kinds of suits are common in the entertainment industry, he said they rarely make it to court because they are so long and expensive and usually result in a settlement. James, however, said he refuses to settle.
James Says He is Being Pressured to Settle
James said he was contacted to give a comment for an upcoming article about what it is like to work for him. He claimed the former employee was making “defamatory” and ridiculous comments about him, which he believes are an attempt to pressure him into a higher settlement offer.
“These claims range everything from, I was so lazy she had to force me to get out of my bed and brush my teeth, and without her I would have never made a single video or a single dollar,” James said. “And other things that are much more serious and disgusting such as that I used to say the n-word around her all the time.”
James added that the last claim is “perfect timing” because a Twitter account he has not used since 2016 was allegedly hacked recently and posted a tweet using the n-word.
James said he knows the employees allegations would go away if he just agreed to settle, but he does not want to do that.
“Contrary to popular belief, I have never ever paid anybody to speak or to not speak about me and this will not be the first time that I do it,” he stated. “It just won’t.”
James said he feels no choice but to fully pursue this legally and felt compelled to post this video in the meantime as the situation remains in the court of public opinion, which is already falling out of his favor. He also said he did not want his fans to be blindsided when the upcoming article is published because he knows it will not look good on his part.
Insider Reporter Tweets About Upcoming Article
In April, Rocklein tweeted something that appeared to be about James and the misconduct allegations against him.
“Watching the same people who screwed me over massively end up in deep scandals isn’t news to me, it’s karmic debt,” she wrote.
She also previously posted another tweet that seemingly referenced her lawsuit against James, as well as a lawsuit she allegedly won against internet personality Erika Costell.
“Won 1, going 2 for 2 because im all about law and order,” she said.
Insider reporter Kat Tenbarge, who broke the story involving a rape allegation against the Vlog Squad’s Dom Zeglaitis, responded to James’ video in a series of now-deleted tweets. She shared his video and said, “Absolutely not, story coming soon.”
“Literally cannot believe this,” she continued. “Okay, well, yeah. You paid your creative director $72k. AFTER a raise. We’ll start there, since you’re the one putting it out! More soon.”
“BLACKMAIL is a criminal allegation, and a really crazy and stupid one to make.”
After taking those posts down, she shared a new tweet saying “We’re reporting everything out. Story will be coming soon!” That post was retweeted by Rocklein.
See what others are saying: (MTV News Australia) (Just Jared) (Daily Dot)
Tana Mongeau Seemingly Defends Talent Agency After Backlash
- YouTuber Tana Mongeau officially launched an influencer management division on Monday called Tana’s Angel’s Agency.
- She wrote on Instagram that she is regularly asked for advice about how to build a following on platforms like OnlyFans and said this new venture will allow her to help people break into the business.
- Mongeau quickly faced backlash from those who believe she is not qualified to teach people how to build an audience from the ground up and from others who think the agency is a “scam.”
- In response, Mongeau said she “hired an amazing team” of successful people and will only sign creators “that I truly feel I can benefit, and that I believe in & resonate with.”
Tana Mongeau Launches Management Division
YouTuber Tana Mongeau launched an influencer management agency on Monday named Tana’s Angels Agency.
The division is part of Unruly Agency, a social media marketing and management company owned by Tara Electra, who will be leading the launch alongside Mongeau and her manager, David Weintraub. Mongeau said she wants to use the agency to help aspiring content creators because when she was just starting out, she could have benefited from a mentor.
“Throughout my career I’ve been taken advantage of more times than I can count,” she previously told Us Weekly.”I am starting TAA to teach people how to not make the mistakes I made early on in my career.”
In a Monday Instagram post, Mongeau wrote that she regularly gets messages from people asking for advice about how to get started and make money on platforms like OnlyFans. Mongeau said that by starting this agency, she can now use her “experiences, platform, connections, knowledge and creativity” to help these small creators find her same success. She also said that the same people who helped her make millions of dollars on OnlyFans will be part of the TAA team.
“I brought on those people to TAA to finally be able to share their expertise, marketing knowledge, and much more with authentic creators I believe in- big, small, or starting today,” she wrote.
TAA Receives Backlash
However, this pursuit has not come without a fair amount of backlash. Many people have shared Mongeau’s tweet announcing TAA and criticized her for the venture. Among other things, many believe she is not qualified to teach people how to build a following from the ground up because she was already famous when she started her OnlyFans.
Others accused her of taking advantage of OnlyFans users and sex workers who are already struggling enough, while others accused her of being a pimp and running a scam.
Mongeau seems to be aware of some of this criticism, as she joked in a tweet early on Tuesday saying, “Someone commented ‘how she gon have a talent agency with no talent’ on my post i’m screaming.”
She then further explained the intent behind TAA.
“I hired an amazing team of lots of individuals who have helped me earn millions on OF and with other opportunities to help me alongside this project. I’m also only signing people onto Tana‘s Angels that I truly feel I can benefit, and that I believe in & resonate with.”
The backlash also does not seem to be slowing her down. Mongeau said that within the first 10 hours of the launch, 100,000 people applied to be part of TAA.