The podcast studio Maximum Fun is blowing up its ownership structure. Nearly two decades after the Los Angeles company launched, CEO Jesse Thorn is selling the company to its workers as Maximum Fun becomes an employee-owned co-op this summer.
“I am going to become, along with all of my employee colleagues here at Maximum Fun, an employee owner of Maximum Fun,” Thorn said in a video announcing the move. Under the new structure, employees will have a say in who sits on the Maximum Fun board of directors and Thorn and Managing Director Bikram Chatterji will now report to that board. It will also decide on the company’s strategy.
The switch to a co-op will mean that employee owners will also split any profits. In a blog post announcing the shift, Maximum Fun says that it expects by not being a company owned by investors, it will have less focus on decisions that maximize near-term profits. It says the recent trend of staff cuts and cancelling some podcasts at some studios is a “natural consequence” of those “speculative investments.”
“Worker-owners have different priorities. They want to feel good about the place where they work. They want to feel like the work that they do matters. They want to know that they and their colleagues are being treated fairly. They want the place where they work to be around for a long time,” it says. “And because the workers are in control, they can ensure that the company remains independent, and able to continue to practice and espouse its values in the long term.”
Employees Will Need To Buy In
Thorn, who launched the business with his wife in 2011, told the Los Angeles Times that the process of converting Maximum Fun into a co-op took about a year and a half as they lined up financing for the buyout from the community development fund Project Equity. Employees interested in becoming part-owners will be able to pay a few hundred dollars to buy-in. That money then goes into a trust, and if they leave the company they will be paid back that contribution along with interest. About two-thirds of current employees have bought-in so far.
“In the end, this is the way to do it that won’t ruin everything and allows the company to be owned and operated by people who I trust who are doing it for the same reasons that I was,” Thorn told the paper.
Maximum Fun produces about 40 podcasts, including Bullseye with Jesse Thorn, My Brother, My Brother and Me, and Adam Ruins Everything. Maximum Fun reportedly operates in the black with millions of dollars of annual revenue through a mix of advertising and memberships.
While Thorn will not receive a big check as if he and his wife sold the studio outright, they will receive an undisclosed upfront payment and then take a percentage of the company’s revenue for a limited number of years. He will also get a non-voting seat on the board. While no numbers are being released, Thorn said that their return is substantially less than if they had sold the company outright. They reportedly had interest from several potential suitors, including iHeartMedia and SiriusXM.
“I didn’t get into this to be a capitalist,” Thorn told TechCrunch. “I wouldn’t necessarily call myself an anti-capitalist, but I have a lot of ambivalence about the accumulation of capital.”