On Feb. 22, the Rhett & Link"s Mythical entertain agreed to buy Smosh in a deal that would certainly unite 2 long-running YouTube channels. V the deal, Mythical has expanded its business to over 70 million subscribers and also 250 million monthly views across 14 YouTube channels.

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There to be a period of months in mid-2013 as soon as YouTube comedy channel Smosh was on top of the world. Run by friends Ian Hecox and also Anthony Padilla, it had 9.7 million subscribers, much more than any kind of other on the streaming video site. During that time, they appeared in a video clip alongside other YouTubers Rhett McLaughlin and Link Neal, who were defined as an “older, less successful Smosh.”

Nearly 6 years later, as soon as Smosh to be in need of a lifeline complying with the abrupt shutdown the parent agency Defy Media, it was McLaughlin and Neal who uncovered themselves in a position to help. Top top Feb. 22, the duo’s Mythical entertainment agreed come buy Smosh in a deal that would unite two long-running YouTube channels. V the deal, Mythical has expanded its organization to end 70 million subscribers and also 250 million monthly views across 14 YouTube channels.

“Ten years ago, if you’d have actually told me we were walking to very own Smosh, ns would have said, ‘OK, this is a Smosh sketch,’” jokes Neal, who has been hosting the digital talk display Good Mythical Morning alongside McLaughlin since 2012.

The size of the transaction, i beg your pardon one source values at less than $10 million in cash, pales in comparison come the sky-high deals that occurred just a handful of years back in the digital room as Disney and DreamWorks animation scooped up multichannel networks device Studios and Awesomeness TV, respectively, at price in the numerous millions. Yet the transaction represents an alternative path for YouTube creators to build sustainable stand-alone providers amid the wrong of the once-popular MCN model.

“This landscape alters so quickly,” notes McLaughlin. “People obtain investments and then walk under and also hire a bunch the people and also then fire a bunch of people. We view all this chaos about us because the beginning. For united state we’ve simply in a an extremely practical way, concentrating on developing a great product that people get excited about and then reasoning of the next logical action for launching something out of the product.”

For a time, that looked choose Smosh could have to be the victim that the changing digital business. After number of successful years on YouTube, Hecox and also Padilla marketed the channel come Alloy Digital in 2011. Alloy later merged with break Media and became Defy Media, and Padilla eventually determined to leave the company and strike out on his own. Smosh had actually multiple channels and some 40 million subscribers in November once Defy suddenly announced that it would certainly shut down and lay off almost all of its staff. Hecox tweeted Nov. 6 that while Defy to be shutting down, Smosh was “already in the procedure of recognize a brand-new home.” A video clip posted come the main Smosh channel Nov. 12 educated viewers the although Smosh to be “homeless,” it would proceed to post new videos.

Behind the scenes, Hecox was searching for a route that would enable him to keep Smosh alive. He says McLaughlin and also Neal texted him about the time that the Defy shutdown giving their help, but he didn’t think lot of it. A few months later, together the bank that had actually assumed the Defy assets was nearing a potential transaction to offer Smosh, castle reconnected.

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“We to be considering good partners in the space,” Hecox reflects. “We had no idea that Mythical was also in this sort of ar when they got to out to us. What i really admire about Mythical is that it’s not owned through a big conglomerate, so they’re in finish control of the destiny the the company. Because that me, that’s yes, really exciting and really assuring. It renders me a lot more excited about the future than if we were to end up in the hands of a large conglomerate the doesn’t really understand or care about an net brand.”

For Mythical, which had grown into a 40-person company operating the end of a 17,000-square-foot studio space in Burbank without raising exterior capital, the chance to acquire Smosh came as executives were beginning to check out the following stage of growth. “Our next phase of development it felt choose there can be a concern of build versus buy, and also as we thought about buying, us weren’t certain which direction we would go,” claims Mythical COO Brian Flanagan. “This was an unanticipated opportunity. Us were quite distressed to check out Defy go down so suddenly since we knew the business well and we knew Smosh to be the crown jewel.”

Adds Mythical chief creative officer Stevie Wynne Levine, “They were wildly successful regardless of the failures of Defy. We’re talking around a brand the was trending on a weekly basis at the height of the YouTube charts. A small variety of people have been roughly since the start of YouTube however a larger number of people and brands have totally failed in that amount of time. To stay as relevant and also successful together a brand prefer Smosh has, it’s a real testament to their creative vision.”

Under the deal, Hecox has been able come bring back around 15 initial Smosh onscreen and also producing talent and build increase a team of approximately 30 that currently works out of Mythical’s headquarters. He says the agency is providing him “a high level that autonomy” to develop its own service plan. First up to be a podcast, which launched Feb. 22 v an inside look in ~ the trip Smosh required to Mythical. Next, there are plans to beef increase the programming throughout Smosh’s slate that channels.

“Smosh and also Mythical are exceptionally aligned on whereby we want to go in the future,” note Hecox. “We both desire to attract and foster new talent and also grow our brands from within. And also we both have actually a lot of of big ideas on just how to flourish the revenue external of YouTube AdSense. Us couldn’t have actually landed in a better place.”