A Playboy in Lockdown, Dan Bilzerian Pushes Party Brand From a Social Distance
(Bloomberg) -- Before much of the world shut down, Dan Bilzerian threw one last party.
On Valentine’s Day eve, the social media entrepreneur hosted 2,700 guests at his mansion in Los Angeles. There was a lingerie contest, a tattoo parlor, fire-breathing bartenders and a neon-illuminated sky diver who jumped from a helicopter onto the driveway. Celebrities in attendance included Chance the Rapper, singer The Weeknd and Blink-182 drummer Travis Barker.
Bilzerian used the bash to launch his latest venture, a premium vodka containing alkaline water, which like a lot of things he sells these days comes emblazoned with a brand name based on the allure of his steamy lifestyle: Ignite. Photos from the event, including Bilzerian dressed in bright blue gym shorts and surrounded by scantily clad women, were quickly blasted across the Internet.
Such images have helped turn the 39-year-old bodybuilder and former professional poker player into one of social media’s biggest celebrities, with 31.2 million followers on Instagram and some 13.8 million on Facebook. Following in the footsteps of other social media stars, most notably makeup mogul Kylie Jenner, Bilzerian is now aiming to build a branded consumer-goods business around his online fame.
So far this year, he’s introduced Ignite mineral water and Ignite energy drinks. He also sells Ignite CBD gummies, Ignite bath bombs, Ignite sports creams and Ignite pet products, such as CBD chew treats and coat sprays. Where it’s legal, Ignite also sells marijuana goods, including prerolled joints, buds and vape pens.
The vehicle for all this is Ignite International Brands Ltd., a publicly traded company based in suburban Toronto that is listed on the Canadian Securities Exchange under the ticker symbol BILZ. It has a market value of C$74 million ($52 million). Bilzerian is chairman and chief executive officer.
Believers in the business describe Bilzerian as a marketing genius. But building a consumer brand around the behavior of one individual can be risky, in part because people tend to be more vulnerable than abstract branding ideals to the pratfalls, temptations and hazards of human existence. Ignite offers a case study in the costs and benefits of such an approach. Recently, Bilzerian’s nonstop, high-flying Bacchanalian lifestyle has been grounded, face-masked and brought to a standstill by the coronavirus pandemic, trapping the business in a sobering, off-brand moment. It’s unclear if and when Ignite’s style of unfettered partying will be able to resume.
At the same time, a look into the company’s regulatory filings by Bloomberg News reveals a repeated blurring of the line between Bilzerian’s personal and corporate expenses—a pattern that suggests Bilzerian’s outsize appetites could not only enliven the vitality of the brand but also, over time, eat away at it.
Over the past two years, according to public filings, Ignite has raised tens of millions of dollars. Ignite lost $35.4 million on sales of $7 million in the first nine months of last year, the most recent results it has released. On May 13, the company said that its chief financial officer was stepping down and it had hired an unnamed replacement. At some point, the cost of footing Bilzerian’s epic revelry could become a drag on the company, according to Subodha Kumar, a professor of marketing and supply-chain management at Temple University in Philadelphia, who has looked over Ignite’s results.
“As long as he can pitch it as marketing expenses for the company, that’s fine, but it’s very fuzzy,” Kumar said. Investors may grow disenchanted if the company continues to show losses, he said, and no longer want to fund the business. Bilzerian, through a spokesperson, declined to comment.
Ignite has delayed putting out its annual report for 2019, citing the Covid-19 crisis. In the past few months, the company has announced deals to supply CBD drops to Circle K convenience stores in the Carolinas and skincare creams in the U.K. On April 28, Ignite said it was also making masks, gloves and hand sanitizer to fight the spread of the virus, while donating 5,000 tubes of its CBD-infused lip balm to the needy in the U.K. So far this year, Ignite’s share price has tumbled more than 50%, falling to 70 Canadian cents from C$1.43.
Jim McCormick, a former British American Tobacco Plc executive who served as president of Ignite for 10 months last year, said that Bilzerian has a core following of 20-to-30-year-old men who are attracted by his excessive, immoderate adventures. Among other things, Bilzerian’s Instagram posts have shown him jet-skiing off the Italian coast, lying on the white-sand beaches of Phuket and celebrating International Women’s Day in a hot tub full of topless models.
More recently, the photos have included plenty of prominently displayed Ignite products. In a photo of Bilzerian playing chess with superstar DJ Steve Aoki, a bottle of Ignite water sits conspicuously in the foreground.
“It’s a pretty effective route to market,” said McCormick, particularly for products like marijuana that often can’t appear in traditional ads. “He’s a super-intelligent person, a kind of second-level chess-player type. He really plays things out in his head.”
Like Playboy founder Hugh Hefner, who lived in a mansion owned by his publicly-traded company, Bilzerian’s personal and corporate expenses are commingled. In May 2018, Ignite took out an option for as much as $65 million to someday purchase the 12-bedroom house where Bilzerian hosted his Valentine’s Day eve party. The mansion has five bars, a commercial-grade elevator and a bowling alley. The company currently rents the property, which Bilzerian lives in, for $200,000 a month in a lease that extends through May of next year.
According to public filings, in June 2018, the company issued a promissory note for Bilzerian to purchase a house in Las Vegas for $8.5 million. Five months later, Bilzerian repaid the loan by selling 2.5 million of his Ignite shares back to the company for $4 each while collecting an additional $1.3 million in cash. Records show that Bilzerian has used his personal credit card to pay for company expenses, including charges for “general consumables, fixtures and travel related to sales and marketing initiatives.” At the end of September, he was owed $1.48 million.
Bilzerian may have developed a strong taste for opulent, sunny real estate at an early age. According to a 2017 profile in the British edition of GQ magazine, Bilzerian grew up in an 11-bedroom mansion in Tampa, Florida, with an indoor basketball court and batting cage. His father, Paul Bilzerian, was a corporate-takeover artist who in 1989 was convicted of fraud, conspiracy and making false statements to securities regulators, which resulted in a $1.5 million fine and a four-year prison sentence. After a stint in the U.S. Navy, Dan Bilzerian attended the University of Florida, where he studied anthropology, but he didn’t graduate, according to the school. For a while, he played poker professionally, claiming in a 2016 podcast that he made $54 million from one player.
Now Bilzerian may be staring down the most difficult hand of his career. The coronavirus pandemic poses a problem for most businesses, but it would seem especially challenging for one built around the glamorous social life of a guy who can no longer socialize. According to his recent social media posts, Bilzerian has been working on a book about himself. For some of his time in isolation, he was accompanied by Hailey Grice, a 21-year-old Ignite model and influencer, who can be seen on Instagram bouncing around on the mansion’s trampoline.
Other videos show Bilzerian padding around his home in quiet solitude. He strolls past a bar stocked with bottles of Ignite water. A cat skitters away. A giant portrait of Bilzerian hangs on the wall like a glittery memorial to our pre-pandemic freedoms. Outside, cars sit idly in the driveway. It is still unclear when Bilzerian will be able to reopen the house for business and reignite his signature lifestyle. For now, the playground remains shuttered.
©2020 Bloomberg L.P.