According to Inc, Smosh founders Anthony Padilla and Ian Hecox have successfully bought back their YouTube empire and quadrupled revenue over the past two and a half years. The creators originally sold Smosh to Alloy Digital (later Defy Media) in 2011 when the channel had approximately 3 million subscribers, making it the first well-known YouTube channel acquisition. After Defy Media’s sudden 2018 shutdown nearly destroyed the brand, Rhett McLaughlin and Link Neal’s Mythical Entertainment purchased Smosh for less than $10 million in 2019. The founders reconnected in 2022 after years of estrangement, repaired their friendship, and officially repurchased Smosh in June 2023, appointing Alessandra Catanese as CEO. Smosh now operates five channels with nearly 53 million collective subscribers and has grown to 70 staff members. This remarkable turnaround story highlights broader shifts in the creator economy landscape.
The YouTube Maturation Cycle
Smosh’s journey represents a complete lifecycle of digital media maturation. When Padilla and Hecox first sold in 2011, they were part of YouTube’s initial wave of professionalization, where creators sought stability beyond platform dependency. Their concern about YouTube “flipping a switch” on their income proved prescient, as the 2018 Defy Media collapse demonstrated how vulnerable even successful digital media companies remained. The current buyback signals a new phase where established creators are reclaiming ownership after learning hard lessons about corporate structures, audience relationships, and creative control.
Founder Dynamics and Creative Leadership
The Smosh story reveals crucial insights about founder partnerships in creative industries. Their communication breakdown during their late teens and early twenties reflects how personal development timelines can collide with business success. What’s remarkable is that both founders used their separation to develop complementary leadership skills—Padilla through building Pressalike and his viral interview series, and Hecox through navigating corporate crises and learning to lead under Mythical’s ownership. Their reunion worked because they returned as evolved leaders rather than reverting to their original dynamic.
Mythical’s Strategic Stewardship
The role of Mythical Entertainment in this story deserves particular attention. Rather than treating Smosh as a pure acquisition, McLaughlin and Neal operated as strategic caretakers who understood creator needs better than traditional media companies. Their willingness to eventually sell back to the founders—while maintaining minority stakes and advisory roles—represents an evolved approach to media ownership. This model creates alignment between original creators and investors that traditional media acquisitions often lack, as the original 2019 acquisition coverage hinted at but couldn’t have predicted would lead to this outcome.
Business Model Evolution
Smosh’s revenue quadrupling demonstrates how mature creator businesses are diversifying beyond platform dependency. While their YouTube channels remain central, their revenue mix now includes branded content, live shows, and merchandise—the hallmarks of an established media company rather than a creator channel. Catanese’s implementation of structured business practices like the Entrepreneurial Operating System and employee incentive programs shows how creative companies professionalize without sacrificing their core identity. The emphasis on promoting from within and creating safe creative environments addresses longstanding industry issues around creator burnout and turnover.
Broader Industry Implications
This buyback signals a potential trend of creator reacquisitions as the digital media market matures. Early YouTube stars who sold their brands are now experienced enough to understand both creative and business dimensions, while the original corporate acquirers face valuation pressures. The successful transition reported by Variety’s coverage of the 2023 buyback suggests that structured ownership transitions with founder-friendly terms can create win-win outcomes. For investors, this model offers partial liquidity while maintaining exposure to successful creator-led businesses through minority stakes.
Future Outlook and Challenges
The real test for Smosh will be sustaining growth now that the emotional buyback story has concluded. Their current success leverages both nostalgia from original fans and new audience discovery, but maintaining 4x revenue growth requires continuous innovation. The appointment of a professional CEO allows the founders to focus on creative work while ensuring business discipline—a structure that has proven successful for other creator-led companies. However, the pressure to continually evolve content for changing platform algorithms and audience preferences remains intense, particularly with 70 employees depending on the company’s stability.
The Smosh story ultimately demonstrates that successful digital media companies must balance creative authenticity with professional business operations. Their journey from teenage creators to corporate employees to owner-operators mirrors the broader creator economy’s maturation. As more early YouTube stars reach similar career inflection points, Smosh’s model of strategic partnerships, structured leadership, and diversified revenue could become the blueprint for sustainable creator-led businesses.
