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How G Fuel’s toxic working environment made the energy drink brand’s influencer marketers jump ship

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How G Fuel’s toxic working environment made the energy drink brand’s influencer marketers jump ship

On June 16, the gaming and esports energy drink company G Fuel let go seven of its talent managers, one day after five of them contacted HR to report their CEO’s use of offensive language to describe both current and former employees during a meeting.

According to former G Fuel staff members, the comments were simply the straw that broke the camel’s back, following months of toxic behavior from senior executives that they said spanned abusive management, nepotistic hiring practices and inappropriate conduct.

These claims were supported by 11 current or former employees at the company who spoke to Digiday, many of whom requesting anonymity due to fears that speaking out could hinder their future employment opportunities in the relatively insular esports industry. When reached for comment, G Fuel spokesperson Mark Botnick told Digiday that the employees had been terminated for “lack of performance” as part of a departmental reorganization. Some staffers received six weeks of severance pay. (Editor’s Note: This Digiday reporter wrote articles for G Fuel on a freelance basis between 2019 and 2020.)

Their departures have had notable ripple effects on G Fuel’s business: after the news went public, over 75 partnered creators — who were paid monthly fees or commissions by G Fuel in exchange for promoting the product — ended their relationships with G Fuel to protest the brand’s treatment of employees that they viewed as the face of the company. “My partner manager is the person who is my G Fuel,” said Nathan Kays Burden, a streamer who ended his partnership with G Fuel following the staffing changes. “I see G Fuel how I see my partner manager.”

In the past, some esports companies have managed to weather controversies without experiencing a significant hit to the bottom line. But the outpouring of negative sentiments toward G Fuel that followed the talent managers’ exit has the potential to hurt the brand, particularly given the nature of this tight-knit industry, in which consumers’ opinions about brands are increasingly dictated by prominent individual influencers.

Some observers have tied ill-timed marketing to the company’s culture — noting that, around the same time as the terminations, G Fuel and Marvel Studios Thor had worked on a campaign centered around Love and Thunder, a film highlighting female empowerment.

“That product launch now sits in feeds where streaming partners are distancing themselves from G Fuel and sharing screenshots of how they’ve been banned for asking what they should do now that their female partner manager has been sacked,” said Michael Baggs, strategy director at the social media agency The Social Element. “In the future, when brands look for partners who represent and reach gaming communities, it’ll be impossible to not see the current conversations around G Fuel and ask themselves if they really reach those communities in a positive way.” Of the seven fired talent managers, three were women, as were at least 34 of the 75-plus partnered creators who chose to break with G Fuel.

Founded in 2012, G Fuel is headquartered in the diminutive Long Island hamlet of Hauppauge, New York, although most employees currently work from home. The privately-owned beverage company has flirted with controversy in the past: it promoted the YouTuber Daniel “Keemstar” Keem, who has been accused of racism and misogyny numerous times, as one of its marquee partners for years, only dropping him after he was accused of exploiting another YouTuber’s suicide in 2020; earlier this year, the company dropped an NFT project after a wave of fan complaints about its high carbon footprint. “Keemstar’s behavior did not align with our values,” Botnick said. “This partnership was terminated by mutual agreement.”

In 2019, G Fuel’s own CEO, Cliff Morgan, came under fire after writing a tweet describing a prominent Twitch streamer as a “lying [expletive].” Each time, G Fuel experienced few, if any, consequences to its bottom line — according to its own numbers, at least. The company reported six consecutive years of revenue growth between 2016 and 2021, with 119 percent growth between 2017 and 2019.

This time around, the brand feels less untouchable. Since the March 2021 press release linked above, G Fuel has not shared any of its revenue figures publicly.

Prominent creator partners, including NFL quarterback Kurt Benkert, have walked away from G Fuel after learning about the terminated employees. As a result, the company’s total social media following, which forms the bedrock of G Fuel’s marketing strategy, has gone down by more than 50 million in recent months, according to the gaming and esports data platform GEEIQ. “The data is showing their presence within gaming and esports is decreasing,” said GEEIQ CEO Charles Hambro, “as their partnerships have fallen over the past six months.”

G Fuel’s social following still far exceeds those of competitors such as Fusion Energy Drink and Mountain Dew Game Fuel — but these rivals are starting to gain ground, according to GEEIQ.

A culture of toxicity

The seven terminated employees were all members of G Fuel’s talent management division, acting as liaisons with the multitude of paid influencers who were contracted to promote the energy drink on their streams and social feeds in exchange for monthly payments or commissions.

G Fuel partners, which included prominent names such as Felix “PewDiePie” Kjellberg and Félix “xQc” Lengyel, created their own custom flavors, among their other integrations, in exchange for payments that sources told Digiday could range up to tens of thousands of dollars per month.

“It was a fairly good chunk of my revenue across YouTube, Twitch and everything like that,” said Joseph “demonjoe” LaFrance, a content creator who ended his contract with G Fuel after learning about the internal changes. “I am giving up a pretty decent amount.” He told Digiday that G Fuel had allowed him to end his contract without any punishment or protests, though he described the week-long process of requesting termination paperwork as a “headache.”

The personnel changes occurred after a meeting between G Fuel’s talent department and Morgan, the CEO. During the meeting, a regularly scheduled check-in video call, Morgan repeatedly blamed G Fuel talent managers for the company’s declining sales, calling out specific previously laid off staffers as “lazy motherfuckers.” He proceeded to call the staffers on the call “retards” and pressured them to step up their work, ending the call by halfheartedly promising that nobody would be fired, according to several former staffers on the call.

After five of the attending staffers individually reported the call to HR, all of them were terminated, as well as two more staff members who had been present at the meeting but hadn’t complained to HR. “‘Restructure’ was the word that they would not stop using,” said one former employee.

That phone call with Morgan led the staffers to file their HR complaints, but former staffers told Digiday that Morgan’s use of problematic language was par for the course and that he had used derogatory language in other conversations. When reached for comment, Botnick acknowledged that Morgan had used colorful language while speaking to subordinates, but said that comments such as the aforementioned “lazy motherfuckers” outburst had been intended as broader descriptors of the employees’ work rather than insults targeting specific staffers.

Although the public has been aware of Morgan’s problematic actions since at least 2019, when he authored the aforementioned controversial tweet, those revelations did seemingly little to damage G Fuel’s revenues or brand partnerships, according to the company’s self-reported figures.

Morgan is not the only G Fuel executive who engaged in questionable behavior. Several former G Fuel employees pointed to Rob Kligman, G Fuel’s vp of marketing operations and talent management, who they said had been reported to upper management for sexual harassment after making inappropriate comments about female influencers’ physical appearances. G Fuel hired a third-party legal counsel, Westerman Ball Ederer Miller Zucker & Sharfstein, LLP, to investigate the matter, which found that the sexual harassment claims were without merit, according to Botnick. “Rob Kligman vehemently denies ever using the terms described,” he said. Digiday repeatedly attempted to reach Kligman for comment, but did not receive a direct response.

Former staffers also said nepotism contributed to the company’s toxic workplace, making it more difficult for rank-and-file staff to come to management with their grievances: Morgan’s wife and daughter work for G Fuel in customer service roles, and the company’s legal counsel is married to its HR director. “Many companies have relatives that work in the organization, and like any other company, we have taken measures to avoid any potential conflict and no family members have a reporting relationship,” Botnick said.

Perhaps the most jarring situation for the former G Fuel staffers was a July 26, 2021 incident involving a C-suite executive of the company, who accidentally exposed his backside to colleagues while using his phone to participate in a 40-person weekly marketing call while taking a shower, according to a video recording of the call viewed by Digiday.

“We’re about 10 minutes into this call, and [the executive] had his phone on the floor of his shower, taking this call, and his camera turned on. I don’t know how, I don’t know exactly why — but someone on the call yelled at him to turn his camera off… He was sudsy, but you definitely saw an ass cheek,” said an anonymous former staffer.

Neither G Fuel nor the executive issued an explanation or apology for the incident to the staff, despite the significant controversy generated by recent similar situations at media organizations such as CNN and The Believer. When Digiday contacted the executive for comment, he passed all queries along to Raquel Colby, G Fuel’s chief administrative officer and general counsel, who then directed Digiday to contact Botnick, who confirmed that the incident occurred, but pointed out that no employees had lodged an official complaint with HR following the call.

A brand safety reckoning

With its history of problematic partnerships and unsavory executive behavior, G Fuel is not necessarily the kind of wholesome brand that attracts prospective partners in the gaming and esports space. Yet the energy drink company continues to be one of the most prominent endemic brands in esports, signing partnerships with high-profile teams such as Sentinels as recently as April 2022. It remains a household name among many streamers and YouTubers, whose relationships with the brand were supported by the now-laid-off talent managers.

“Our team kind of shielded G Fuel from a lot of the bullshit and issues, just based on the creators we signed,” said a former staffer. Former staffers said some talent managers logged sales of more than $1 million per quarter, although they were unable to provide more specific figures regarding the company’s valuation and the scale of its partnerships. When asked for specific numbers, Botnick declined to discuss G Fuel’s financials.

Now that seven of G Fuel’s talent managers are no longer around to provide a more friendly face for the company, its lurking brand safety issues could become more visible.

For example, G Fuel execs are reluctant to address social justice in its front-facing messaging; social posts that did champion feminism or LGBTQ issues were the result of pressure from talent managers, not higher-level staff, sources said.

“G Fuel just feels afraid to take any political stance, any polarizing stance that can divide their community,” said another anonymous former staffer. “That’s what it boils down to.”

G Fuel is far from the only endemic gaming and esports company to have brand-threatening skeletons in its closet. Even the popular esports organization FaZe Clan, which went public last month, continues to struggle with issues of homophobia and misogyny among its membership. For a reckoning to truly come, it seems the culture of the entire industry needs to change — not just one energy drink manufacturer.

Despite the economic downturn, non-endemic brands show no signs of slowing their partnerships with gaming and esports companies. But the revelations about G Fuel’s toxic work culture is merely the latest news to demonstrate the problematic issues lurking beneath the surface of the industry.

When news of Activision Blizzard’s sexist company culture became public in 2021, the company’s brand partners responded by pulling away; these days, the Overwatch League has no major sponsors. As brands step up their scrutiny of potential gaming partners and become more selective with their marketing dollars, companies like G Fuel could find themselves in dire straits.

“I think the brand has to make sure that it’s happy going into a relationship, it’s done the due diligence, it knows who it’s working with and it knows the potential risk profile, as well as the size of the reward,” Baggs said. “You can’t just go after people and go, ‘they’ve got massive audience; this is the right way in.’”

It’s been over two month since the G Fuel terminations, but those involved say they have not forgotten how things went down. The talent managers will continue to work in the industry — many have already secured new jobs at other endemic firms — and the talent they worked with will continue to build their communities and fandom.

Their continued presence means the industry won’t forget what happened any time soon.

“I know some people, including myself, are very frustrated that they still haven’t spoken about it; there’s never been a statement, there’s never been anything like that,” said Stallion, another G Fuel partner who ended his agreement with the company after learning about the personnel changes. “I find that very disturbing, and also very reflective of what the company’s values are like.”

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