By Hernán Panessi and Javier Hasse.
Hundreds of millions of views, a barrage of new stars, the creation of unexpected jobs, rap materialized from an original side, a hobby that became a business. Professional freestyle rap is one of the most amazing phenomena of the last decade. And it’s big business too.
“The launch of the league was the consolidation of our years of discourse,” says Asier Fernández, director and co-founder of Urban Roosters, the most important freestyle platform in the Spanish-language (and probably the entire) world.
The Birth Of A Behemoth
Urban Roosters is the undisputed leader of the freestyle rap market in Latin America and Spain – and is already getting ready to conquer new markets including the U.S. However, the task of Fernández and Pedro Henrique, his partner, was not easy: the friends built a media empire where there was hardly an emerging cultural scene.
Their main vehicle? The Freestyle Master Series, a professional freestyle league that brings together the best MCs in the world, a league that managed to articulate the jump of freestyle rap to a more sporty world: ordered, syndicated, hierarchized.
Like a kind of FIFA or NBA but for rap, Urban Roosters manages FMS leagues in Spain, Argentina, Chile, Mexico and Peru, as well as an international league that faces the best rappers from each country.
And its strength partly derived from the generation of an invisible thread with the underground competitions: according to their relevance, reach and trajectory, each underground competition helps MCs accumulate points to one day get drafted to the highest category, the Rap Champions League.
Rap As A Raw Material
"Both my partner and I are rappers," says Asier.
Since the age of 15, Asier and his friends have been fans of freestyle. This love sealed an unbreakable routine: every Thursday they’d gather to improvise some bars.
“When I went to Madrid for work, I had to leave that routine. But I thought: Why not continue practicing that hobby via the Internet? ”
This led Asier to design an online platform to battle alongside his friends, no matter where they were.
“Pedro and I worked in an advertising agency. We launched this platform and, with many years on the circuit, we realized that, to grow, freestyle had to follow similar paths to skateboarding, surfing or the UFC ”.
– Why skateboarding, surfing, and the UFC?
“Because fashions perish but sports don’t.”
"When working in advertising, we came from creating campaigns for brands," he continues. “That was our background and we didn't know anything about the business world. In 2011 we set up this project as a 'trucho' [a project created to be shown without commercial purposes] to sell our book and get a job.”
The duo offered it to their clients to no success. After several failed pitches, their boss began to look at them differently: “The next time you pitch this, you’ll be out of a job!” – he told them.
But the seed was already planted. The vision of freestyle as a sporting discipline was fixed in the minds of Asier and Pedro. The challenge now was to find the intersection with the cultural side of it all.
And so, Urban Roosters was born. But not without hard work and perseverance; the last man standing is the one who prevails.
"We were convinced of what we needed to become what we are today," he says, convinced.
Pedro and Asier insisted with other clients, appeared in incubators, closed with accelerators, built synergies with various organizations…
"Competitiveness was well received," he recalls.
Meanwhile, the group of creatives continued to refine the idea during the weekends. "We got stubborn," he says.
“We submitted it to a contest and they chose us out of 900 projects. That gave us a lot of momentum. We quickly found a capitalist partner, an investor. We went to represent Spain at the Entrepreneurs' World Cup. Those trips blew our minds.”
– From a management standpoint, would you do something different?
"I think it wasn’t right to give so much equity to a business angel. That of ‘taking capital and giving a lot.’ Knowing what I know now, I wouldn't have done it that way. Our capital did not last long, the money was little and what we delivered was a lot. The equity partner at the time got a good deal.”
The First Steps Of A Fabulous Business
As time went by, the business fire was igniting. Ultimately, it would be a half-year pass through the famous Startup Chile incubator that would provide the missing wood.
“We started ranking different competitions. We checked if they had a prize in money, repercussion, trajectory. We categorized all of this and assigned points,” he recalls.
It was 2015 and the foundations for the Freestyle Federation were being laid.
"We professionalize the system," continues Fernández.
In short, the idea of a professional league had to be realized with the best competitors. However, they found that freestyle has a subjective notion. So, to organize competitions, they decided to innovate with two elements that are central to the differential of their business: voting and format.
“You had to objectify the discipline a bit. With the Freestyle Master Series we are looking for a more complete freestyle,” he assures.
With this in mind, the duo launched a first FMS pilot in Spain and it was, in his words, "the first that supported turning this into a profession." This first league lit the aspirational fuse for thousands of young people.
Following the Spanish success, the league traveled to Argentina.
"It was an uphill battle at first. But now Argentina is our flagship league, our battle horse," he voices.
The following year, Mexico and Chile arrived. And, in 2020, the Peruvian league was added.
— What was the key point of the success of the business?
“The repercussion. And it coincided with the phase in which we were in the accelerator. We learned to focus. The best thing we had was that: learning to do what was necessary, just freestyle. With this, the FMS emerged and I think it was a key point.
Challenges And New Coordinates
Nowadays, professional competitions are becoming popular all over the world. "Freestyle competitions have existed since rap has existed."
Asier asserts: “In Japan they are just as developed as we are. In Brazil they are about to explode. And then we are seeing that it is going global. In Germany, a league came out with the same FMS concept. Deep down, everyone is competing for more views. We would like to re-introduce competitive freestyle in the United States, done our way.”
Among the main challenges, the FMS went through different stages. The first had to do with growing in audience, achieving repercussion and gaining recognition.
Then it was time to get funding. "They told us: 'good, but how will they monetize it?'"
It became necessary to validate the project with the support of mainstream brands. But which ones would be interested in freestyle?
“In the second year of the Spanish league we got JD Sports to join us as a sponsor. That confirmed that there were brands that were ready, ”he recalls.
With this, the conventions of street rap and its stereotypes began to be erased. A new hip-hop business narrative was beginning to be written.
“That was a major change. Other brands started to trust us and we got more financing ”, he explains.
— And what happened to the other players in the sector?
“We have competed hard with Red Bull because our resources are different. We have been able to take advantage of that momentum, get in the wheel and generate an impact with different campaigns at different times. We had micro battles that were taking their toll. It has been difficult because Red Bull is a giant.
— How did you manage to add Red Bull: Batalla de los Gallos, your competitor’s flagship, to your scoring system?
"It was evolution itself. Red Bull was always the competition, but it had a great talent exile problem. It offered you a showcase but, since you didn't collect a salary, once you won, there wasn’t much incentive to return. To do so was to lose face. We managed to create stability for the boys. We knew that this was going to have an impact on the competitors and on the discipline itself. It was strategically in the face of the competition. If all that hadn't happened, we wouldn't be here today. Everything also happened because of the competition with Red Bull, because we could have given up. It was a tough time, but it served us like gasoline.
Make It Real
Currently, Urban Roosters maintains about 250 stable jobs, plus all the fluctuations that appear with live events and other peripheral businesses.
"In 2020 we settled into profitability," says Asier. “After five years of uninterrupted growth, in 2019 we were on the verge of reaching that point. COVID turned us upside down. We were perfect and it was like erasing everything," he says.
Due to the economic crisis, Urban Roosters lost sponsors, stopped cutting tickets, and succumbed to its projection as a business model.
"We wanted to stop depending on ticketing, but 70% of our income as a company came from there," he acknowledges.
This shock made them reconvert, integrate with other types of contracts, sell television rights and content generation. They also raised more money.
And, it seems, the jump was qualitative. "It is a moment very important".
He expands: “Other producers see the business in the short-term. We are long-term oriented. But for that you have to invest.”
Urban Roosters’ growth is steady. However, despite being the largest in the market, compared to emerging verticals such as e-sports (another of the trend sports), the turnover is not exorbitant: “In 2016 we had a turnover of 16,000 euros. In 2017, 200,000. By 2018, 700,000. And in 2019 about 2.4 million.”
2020 and 2021 were tough years but the guys made it through. “In 2021 we’ll make around 2.4 million euros as well, but with only one in person show. In 2019, 80% of our revenue came from ticket sales, but now our model has pivoted.”
With the return to live, in person shows, ticket sales are expected to go through the roof, and with them, Urban Roosters’ 2022 profit.
The co-founders also promise new leagues down the line: Andes (for Venezuela, Ecuador, Bolivia and Colombia), Brazil, Portugal, Caribbean and the U.S. A second division of the league in certain countries is also in the cards.
– Why does everyone want to get involved in some way or another with the FMS?
“Because we have the repercussion and great reach. But something that characterizes the league is that it ends up being like a soap opera. It is a consumption that is dosed over time. And the spectators are accompanying everything that happens.
“In the past, content’s shelf life was about a month. Now, it’s more like one week.
“In addition, the FMS narrative has spectators following the “Warrior’s Path:” Someone who starts off badly and starts to grow. And from that merit they achieve success.
Meanwhile, that “Warrior’s Path” also had its exoduses: young people who showed their talent in the different leagues and made the leap to other disciplines. Or they simply retired.
“We are in a moment of transition, between an old vision and a new one”, Asier concludes. “There are guys who, although very young, have been in the industry for many years. And they have an ancient vision of being an Eminem succeeding in music. And there are guys who want to be freestylers and not musicians. There is going to be an exodus of talent, we know that. And, as with any sport, the great stars must accompany. Having a Messi is a fundamental part for him to connect with different generations. But the novelty is something that really captivates the public.”