When a 33-year-old Todd Wagner quit his job as a lawyer to follow his entrepreneurial dream, the corner-office partner told him he would be back in a few months, “begging for a job”.
Fast forward two decades and Wagner is one of America’s most influential dot-com billionaires. Aged 53 with an estimated net worth of US$1.3 billion according to Wealth-X, Wagner made the bulk of his fortune through selling his first business, Broadcast.com, to Yahoo in 1999 after setting it up just five years before.
Today, Wagner has interests in a range of industries from movies to digital technology to a top NBA team, and even finds time to maintain his top-scoring golf handicap of five. Philanthropy has always been a part of his life and to date he and his foundation have pledged around US$50 million, mainly to US children’s charities including the Inner City Games Foundation, After-School Stars and The Boys and Girls Clubs of America.
But he always felt frustrated at the inefficiencies inherent in the non-profit industry. America is considered the poster child of global philanthropy, but charitable giving in the US as a proportion of GDP has hovered around a surprisingly low 2 percent of GDP for the last 40 years. And despite the prominence of the Internet, online giving is only about 8 percent of total giving. This presents a huge opportunity, according to Wagner.
“I’ve written a lot of cheques in my time and will continue to do so, but I realised there had to be a more efficient way to raise funds,” he told Wealth-X. “There is a limited pool of wealthy individuals and people do get donor fatigue when they get invited to a hundred fundraisers and approached by hundreds of different charities who may or may not have done their research, year after year.”
Last year Wagner hatched an idea for a novel way to raise money through leveraging the power of social media, technology and celebrity, which puts the emphasis not on the wealthy, but on the mass market.
Chideo – a combination of the words charity and video – is a digital video network that operates a bit like Twitter, but with a practical marketing purpose. Wagner has invested tens of millions of dollars in the Los Angeles and Dallas-based firm which is one hundred percent owned and funded by him.
“In everything I have done I have always sought to challenge the status quo,” explained Wagner. “Chideo turns giving on its head because the primary driver is not philanthropic. The draw is for fans to interact with their favourite celebrity or personality, which rightly or wrongly, is what motivates a lot more people than just donating to charity.”
The way Chideo works is via a video platform featuring personalities from the worlds of sport, music, film and culture. Fans can sign up and “follow” these individuals for free, and can ask their favourite personality to create a video –for example suggesting Bradley Cooper do a tour of his house or Ian Poulter share his tips on preparing for the US Masters golf competition. Other members then vote for their favourite suggestion and when votes hit a certain point, the celebrity is obliged to create the suggested video. To view the video, members must pay a small fee that goes to a charity of the celebrity’s choice.
He said: “Rather than going after the wealthy, we are trying to reach the other 99 percent of the people in an efficient way, who would like to be a part of the process and who can reside anywhere in the world.”
It may sound unfashionable to create a philanthropy offering that has celebrity marketing at its core, but Wagner believes this method will be a more successful way to raise funds than any offering to date.
“This is a brand new way for a fan to truly interact with a celebrity or personality,” said Wagner. “Fundamentally we’re trying to entertain people and at the back of their mind they know they are giving to a good cause.” He added that since launching six months ago the site has attracted 80 celebrities from Morgan Freeman to Debby Ryan, and gets hundreds of thousands of impressions a day, a number which he hopes to snowball.
Last month, Wagner appointed an advisory board of celebrities, fundraisers and ultra high net worth (UHNW) industry luminaries to identify more opportunities through their individual networks. These advisors include the ultra wealthy co-founder of TriBeCa Film Festival, Jane Rosenthal, and co-founder of movie giant Miramax, Harvey Weinstein, who has US$210 million in assets according to Wealth-X. Wagner also hopes to expand the platform to Europe and Asia by featuring more international personalities. And in the same way that Bill Gates has a professionally-managed, profitable Africa fund instead of just giving donations, one day Wagner hopes to turn a profit. “I call Chideo a for-profit with the long-term goal of breaking even. Obviously I’ve started this for different reasons than a typical business, but I would just like it to be sustainable,” he added.
Wagner has strong family values and is secretive about his child and his wife Kari, although he says that they are both involved with his business. He grew up in Gary, Indiana, an upbringing that he describes as “pretty blue collar.” “My mum was a home-maker and my dad fought in World War II. They always insisted on me getting the best possible education,” he commented. An obedient son, Wagner obtained an MA in business from Indiana University and a law degree from The University of Virginia. He went on to practice law at Dallas-based Akin Gump Strauss Hauer & Feld until he realised it was not for him. “I couldn’t envision doing that for the rest of my life. I felt I had more in common with the clients than the lawyers.”
After he left, he co-founded Broadcast.com with his college friend and now fellow billionaire Mark Cuban (who has a net worth of US$2.8 billion according to Wealth-X). After selling Broadcast.com, Wagner was offered the role of COO of Yahoo. But with entrepreneurialism in his blood, he turned it down. Instead he and Cuban formed another venture, 2929 Productions, and now own entertainment distributor Magnolia Pictures, the Landmark Theatres cinema chain and two high-definition cable networks, HDNet and HDNet Movies.
And did he ever dream he would one day become a billionaire? “At age 33 I pooled all my savings, including my 401k (a US pension fund) and everything I had ever made as a lawyer, into a start-up. For a while I had a negative net worth. Five years later I was on the Forbes 400 list. Life can be crazy.”
Wilkinson is Editor in Chief Wealth-X
