WEBVTT

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We have talked before about how LMG makes money. The vast majority of our

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revenue comes directly from our audience through sales of our products or from

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watching our content either on YouTube or over on Floatplane where our

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incredible float goats subscribe for extra content, early access, and perks.

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The rest of it comes indirectly from our audience in the form of sponsorships and

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affiliate links. And that's why when we make a decision, you are our guide. We

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are laser focused on serving our audience with the products we develop

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and the content we create. Which is why it's time finally to have the talk. What

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happens to the money? How does Lionus Media Group spend money? How much of it

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does Lionus keep? I'm going to tell you all of it. But first, I'm going to need

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to get some money from our sponsor, Meter. They're here to help you build

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out enterprise level networks from scratch. Book a demo and start scaling

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your network now at meter.com/LTT.

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I really didn't want to kill our accounting department preparing this. So

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before we begin, I want to acknowledge that the data that they prepared does

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contain some rounding and some quick math. So take it for what it is. It's a

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big picture look at expenses for the last couple of years with Windows of

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insight into the smaller details. With that out of the way, let's begin. Across

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2024 and 2025, our largest expenses

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combining for 50% of our total were inventory purchases and [music] people.

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Now, when I say inventory, that doesn't include cameras and editing workstations

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and that sort of thing. I'm talking about the 4% we spend on apparel, the 8%

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we spend on backpacks and other gear items, and the 14% that we spend [music]

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on screwdrivers and other items to stock in our warehouses and ship around the

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world. It's kind of wild to think about, right? A quarter of our expenses are

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buying inventory for ltstore.com. Now, in theory, these are sound

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investments that should generate profit for us. So, uh, no big deal, right? But

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nothing is a guarantee. We've had our share of duds over the years and even

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for successful products, managing cash flow for a growing business can be

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extremely challenging. If you buy too little, your store looks abandoned. You

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buy too much and you might be short on money for payroll. The big loadin that

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we had for Black Friday this year required pretty careful coordination

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between Creator Warehouse and our accounting department. By the way, thank

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you for being part of it and don't forget to leave a review for your purchase. We do read them and we care a

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lot about your feedback. The next biggest expense for LMG is people, but

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we'll come back to them later because I want to dive a little bit deeper into that. So, first let's talk about product

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fulfillment. Why don't you guys have a European distribution center, you might

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ask? Well, because the distribution channels that we have now are already

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10% of our total company expenses. Guys,

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storage ain't free. And the people who pick your orders, they're not free

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either. Trust me, I hate giving couriers this 8% exactly as much as you do. And

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when the time is right for us to have distribution in regions like Europe and

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Australia, we will do it, but for now, we're just going to have to keep

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exploring other ways to reduce our shipping costs and improve our delivery

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processes for our global customers. Another thing that I'd love to reduce,

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but can't, is selling costs at 3%. This

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includes the fees that we pay for our Shopify store as well as the pound of

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flesh that we sacrifice to payment processors like PayPal and Stripe. Let's

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see what's next. Ah, yes, overhead.

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That's an expense. Yeah, okay. It's a pretty broad term, but there are a lot

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of things that need to fit under this umbrella. Our overhead category includes

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bank fees, insurance, as well as company

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events like sports nights, quarterly department activities, summer of fun,

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which is where employees get credits for group activities like meals, golf, arts

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and crafts, etc. And of course, our epic

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annual Christmas party. It also includes postage, mileage reimbursements, office

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supplies, janitorial services, security, building maintenance, marketing, and

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charitable donations. Utilities are also in here at about 3%. And then there's

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R&D, which I assume includes some of the wacky equipment that the CW team buys to

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develop new products. Travel comes in at about half a percent and production

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purchases weigh in at around 1%. So that's your cameras, lenses, lights, SD

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cards, and that sort of thing. I actually remember making a comment years

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ago about how cameras are not expensive, people are expensive, and people lost

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their freaking minds about how out of touch I was. But this is the context,

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folks. Yeah, cameras sting a little, but like software is substantially higher at

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1.5% of our yearly outlet. The biggest ones are Solid Works for CAD, Gorgeous

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for managing customer care tickets, and Adobe for well, you know, this Adobe,

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Google Workspace, Microsoft Teams, and Ship Station make up kind of the next

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tier. And then there's a bunch of smaller ones. The last two big ticket

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overhead items, totaling 1 and a half and 2% of our annual expenses,

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respectively, are foreign exchange and other, which I assume is just

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embezzlement, as well as rent. Wait,

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rent? Don't you guys own your buildings?

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Yes, we do. To give ourselves peace of mind and location security for the

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future, we've spent a considerable amount of money over the years owning

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and upgrading our workspaces. Some of these acquisitions have actually ended

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up being pretty solid investments, which is nice, but others haven't, which is

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all besides the point right now. The point is that Ivonne puts our offices

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into their own companies that for tax purposes have to be paid to cover their

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own expenses, like interest on the loans that we took out for those buildings. It

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does mean more paperwork, but apparently there are also liability advantages to

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doing it this way. I don't pretend to fully understand it. All right, that's

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overhead. Now, for a fun one, capital expenditures.

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Okay, that doesn't sound fun, but these are best described as large outlays of

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money that don't comfortably fit into any other category, including the Labs

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acoustic chamber, a fire truck, some upgrades to our sets and workshop, a

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three-stage Cascade CPU cooler, a 2020 Toyota Corolla for the Comet AI

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self-driving video, and the Yesest LED video wall that I bought on Craigslist.

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What's interesting though is that while these high-profile purchases get talked

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about a lot and have big dollar values in the thumbnails, they actually make up

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less than 1% of our total expenses. The

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same cannot be said about people. With a headcount of 120 now across our various

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teams, it shouldn't be a big surprise that other than the inventory we stock,

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payroll is our largest expense by a significant margin at about 25%.

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Breaking this down from there was a little tricky. See, many members of our

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team are crossfunctional. That's to say that one day they might be evaluating a

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material sample for a t-shirt and then the next day they might be appearing on camera explaining t-shirt materials to

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our flow plane subscribers. But the way that our payroll budget is generally

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broken out is according to the areas where people make their primary

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contributions. With that in mind, the largest department is called internal

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shared services. with multiple companies. We could have separate HR,

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accounting, events, infrastructure, logistics, and operations departments

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for each company, but that would be horribly inefficient. So instead, we

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share all of those departments. The biggest one is operations at a little

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over 11% of our payroll for 2025. That's

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so large because it happens to include multiple top executives and it also

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serves as a bit of a catch-all for things like events, community

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management, and HR. The other half is made up of accounting, IT

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infrastructure, and logistics. These are the folks who get our expense reports

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paid on time, keep our storage servers working, and who keep our shared office

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spaces equipped with peripherals. All three of these departments are absolute

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heroes, and we thank you for your service. Next up is developers.

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Developers. Developers, developers, no one else. Okay, fine. The point is we

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have a ton of developers now handling everything from Floatplane.com to

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ltstore.com to lttabs.com

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to internal tools and weird experiments.

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Hey, remember the time our dev team built a VPN product in a weekend and

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then we got cold feet around the legal and ethical concerns? These guys

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absolute heroes, too. It is worth noting that this one is a little funky though

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because Luke is in here and he is um not

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a developer. He manages developers, but

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then he also manages the lab's testing team and he appears on camera and is

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just, you know, generally a Chad. So, as you'd expect, he inflates the numbers

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here a little bit. The next several departments each land in the 10 to 15%

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range, starting with writing. These are probably the folks that you know the

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best. We call them writers, but it's kind of YouTube industry lingo for a bit

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of writing, a bit of production planning, a bit of hosting, a bit of

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Sorry, I'm doing what today? Okay. And then next up is production. Another

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department of unsung heroes. [music] Though with that said, I actually kind

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of love it when they sing a little. Whether that's our camera operators

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jumping in to ask the question that everyone's thinking or our editors

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adding their customary 15 pieces of flare to our videos for you guys to

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pause and [music] appreciate. Product design, which includes graphic design,

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fashion, and engineering, has become a major group for us over the last couple

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of years. These are the folks that bring the many products you enjoy on

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ltstore.com to life, obsessing over every detail from the sound of the

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ratchet to the hand feel of a design printed on one of our high-quality

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garments. In some cases, this team also gets tasked with taking our product

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ideas behind the barn. That was a fun video, by the way, and is totally worth

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a watch to get some insight into how these folks work. Finally, there's

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operations staff and management specifically for ltstore.com. These are

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more unsung heroes working on everything from customer care to compliance to

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supply chain management and marketing. These are the folks who helped us

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weather some major storms this year by

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rolling out a US-based warehouse in a matter of months after a certain person

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enacted a bunch of import taxes on Americans. And then they also had to

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manage the fallout around moving fast and breaking stuff. Huh. Our two

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smallest groups in 2025 at under 10% each are the Labs team who handles

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product testing and is quietly working in the background to scale up our

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processes while also making growing contributions directly to the content as

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well as our partnerships team which includes Disneyland who handles brand

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partnerships and brought you mega bangers this year ranging from AMD

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ultimate tech upgrade to that incredible tour that we did of Kyokia's Fab in

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Japan along with our amazing procurement team who I think can buy anything. I

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mean, they barely even raised an eyebrow when I asked for a fire truck. So, um,

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that's it. That's who gets paid. But how are they paid? Well, while we don't

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always get things perfect, what I can confidently say is that LMG delivers on

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our goal of median salaries that are well above what's typical for our

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region. in 2024, including only employees who were active for the full

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ltstore.com. In 2024, including only

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employees who were actually active for the full year, we landed at around

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$73,500 Canadian, [music] and that was higher

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than even the average income in our area at that time. Then in 2025, we increased

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our median salary to just over $80,000 Canadian. This 9% change was made in

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spite of actually flat revenues across those years to hire and retain key

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talent as well as to better support our valued team members through the current

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[music] cost of living crisis. It was also partly driven by the internal

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minimum wage guidelines that we have for entry-level positions. It is separate

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from the legal limit and instead is tethered to the published Greater

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Vancouver living wage which is designed as the hourly rate that a full-time

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worker must earn in order to cover essential expenses, avoid chronic

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financial stress, and to participate in their community. Furthermore, it is

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worth noting that unlike many gig- based productions, we hire the vast majority

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of our local team members as full-time employees, which here in BC affords them

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protections and benefits that are not the norm for contractors, [music] and

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for that matter, not the norm for anyone in many other parts of the world. We

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also offer a benefits package that includes retirement savings, matching,

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continued education, health and dental, and budgets for extras like counseling

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and physiootherapy. Also, now that more members of our team are having kids, we

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recently added partial coverage for orthodontics.

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I know that there will be many LMG team members, both current and former,

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watching this video. And I'm sure this talk of company compensation is going to

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raise some questions for some of you. But what I hope is that this degree of

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transparency will answer at least some of them. And if you still have concerns

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or you're looking for ways to improve your pay, it might be time for a

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conversation about either performance or a role change. We post all open

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positions on linusmediargroup.com and you can always speak with your manager

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or with HR about how to boost your total compensation. We're working on a system,

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by the way, for quantifying some of the previously intangible qualities that

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have led to people with similar job titles making different amounts and we're hoping to roll that out shortly.

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Moving on to average salaries. Naturally, these end up higher than

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median salaries since you're going to have outliers like top executives that

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skew the data. But they don't skew things as much as you might think. In

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the last year, we have focused on improving compensation for our

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individual contributors and have made only small adjustments to leadership.

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This is reflective of a recent period of flat revenue growth and hopefully is a

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trend that we can work to improve for 2026. Average salaries across our

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companies then were 114,000 Canadian and

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115,000 Canadian for 2024 and 2025

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respectively. Another key metric that people look at to determine fairness is

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the relative compensation of executives and individual contributors. [music] And

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I'm going to do my best to give you guys some insight here, but calculating this

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ratio is a little bit complicated for [music] us. See, Ivonne and I have each

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paid ourselves $121,000 a year for

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years. Why that number? I have no idea. But as [music] the also shareholders of

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the company, it's obviously not our entire take-home. So then we could

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remove ourselves as weird outliers, but

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then we'd be sharing an average of like four people, which is basically just

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outing their salaries. So what I've opted to do instead is to just semi-out

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one person, Taran. Our CEO to median pay

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ratio is somewhere in the range of 5:1 and 10:1. Okay, it's a pretty big range,

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but for the purposes of this fireside chat, I don't think that really matters.

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The point is that it's reasonable. [music] Even by 1970s standards, before

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executive compensation went cray cray at the expense of the worker, that kind of

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a ratio was common place. Now, it is worth noting that Taran's been on the

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job for a few years now, and there are plans to tune his comp package in the

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near future if we execute well on our plans for 2026, but I can only tell you

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guys what [music] is, not what maybe will be. Which brings us to the 5'1 in

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elephant in the room. This guy. At this

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point, I'm addressing our team as much as the audience. So, I'll be direct. In

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2025, our tax installments were just shy of 8% of our total expenses. And the

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last 15 or so percent is [music] our net profit. Is it a lot of money? Yes. But

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from an objective standpoint, it's not outside of the reasonable range if you

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consider the whole picture. And if anything, my intention is to find new

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revenue opportunities or efficiencies that will push that into the 20% range.

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[music] Why? Well, because that bucket isn't just fund money for Lionus and his

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family. For starters, it includes setting aside any capital that Ivonne

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and I, with consultation from our executive team, [music] might put aside

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to invest in new projects, such as the upcoming series, buying and renovating a

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tech house, as well as another yet to be disclosed big content related

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acquisition [music] for 2026. It also includes maintaining our operating cash

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flow as well as our rainy day fund which

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okay memes about my financial irresponsibility aside, Ivonne and I

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have been extremely careful with our resources over the last decade plus.

00:16:38.800 --> 00:16:45.519
We've weathered multiple major storms that have had serious business impacts

00:16:43.440 --> 00:16:50.160
with zero layoffs and that includes both COVID as well as the 2023 controversy.

00:16:48.000 --> 00:16:54.639
Now, it is worth noting here that layoff has a very specific definition. It means

00:16:52.399 --> 00:16:58.240
a reduction in force due to like a restructuring or like a shortage of

00:16:56.480 --> 00:17:02.480
available work which might happen someday but it hasn't yet and [music] if

00:17:00.959 --> 00:17:07.439
anyone tells you that they were laid off here they either don't know or fully

00:17:05.039 --> 00:17:10.880
understand what happened or they are not telling you the whole story. The [music]

00:17:09.039 --> 00:17:16.400
last thing that our careful financial planning has enabled us to do is never

00:17:13.360 --> 00:17:18.480
bring in outside investors which can be

00:17:16.400 --> 00:17:22.640
okay but it can also carry the risk of initifying our jobs and our content.

00:17:21.120 --> 00:17:27.360
Finally, yes, this pool does include paying

00:17:25.280 --> 00:17:32.480
dividends to our shareholders. That's me and Ivonne. And this is where the lines

00:17:29.440 --> 00:17:34.720
get really blurry. For one thing, if I

00:17:32.480 --> 00:17:39.360
were to issue a dividend to myself, for example, I can't just give myself money

00:17:37.600 --> 00:17:43.280
from that bucket. I'm going to have to pay personal income tax on top of the

00:17:41.840 --> 00:17:48.080
corporate income tax that I already paid. So, that slice of the pie, it's

00:17:45.840 --> 00:17:51.440
not actually as big as it looks if I wanted to use it personally. [music]

00:17:49.919 --> 00:17:56.400
And then the other thing blurring the line is that any shareholder dividend

00:17:53.760 --> 00:18:01.280
that I wanted to issue to myself, it wouldn't just be a payout for the

00:17:59.039 --> 00:18:04.880
ongoing investment into the company. It would also include whatever the company

00:18:03.039 --> 00:18:07.679
decides that I'm worth for being our primary on-screen talent, creative

00:18:06.559 --> 00:18:13.840
director for our physical goods business, as well as a top level executive. How do you quantify what each

00:18:11.919 --> 00:18:18.080
of these is worth? How do you quantify what they're all worth together? Am I

00:18:15.919 --> 00:18:22.320
worth millions of dollars a year? Could anyone be worth that much? I don't know.

00:18:20.559 --> 00:18:27.039
I could compare against other recognizable hosts where yeah, okay, it

00:18:24.799 --> 00:18:31.440
doesn't look that ridiculous. But then realistically, I'm not as good as them.

00:18:29.600 --> 00:18:35.120
But then on the other hand, Ivonne and I provided our own seed capital for this

00:18:33.440 --> 00:18:41.120
company without even so much as a bank loan. They didn't have to go through that. So, it's a tough question to

00:18:38.559 --> 00:18:45.840
answer. On the one hand, it sounds like a lot because it is. But on the other

00:18:43.440 --> 00:18:50.000
hand, this is it. This is the pot at the end of the rainbow in a capitalist

00:18:47.440 --> 00:18:54.559
system that we didn't choose but do have to operate in. Ivonne and I took a big

00:18:52.240 --> 00:18:58.160
risk both providing capital to grow this thing and working our butts off

00:18:56.480 --> 00:19:02.799
alongside the worldass team that we build. We beat the odds and we're also

00:19:00.559 --> 00:19:06.400
making concrete efforts not to pull the ladder up behind us. If you did the same

00:19:04.799 --> 00:19:11.520
thing, I'd want you to have the same reward. It's a hard truth to swallow,

00:19:08.559 --> 00:19:15.440
but a wage will always have a ceiling. the ceiling of how much someone's

00:19:13.360 --> 00:19:20.160
willing to pay, which is dictated or at least strongly influenced by a market

00:19:17.679 --> 00:19:24.240
that is cutthroat by its very nature. By contrast, the ceiling for

00:19:21.600 --> 00:19:27.600
entrepreneurship, that's however high you can build it. It is worth noting, by

00:19:26.400 --> 00:19:32.720
the way, though, that while entrepreneurship is a great way to elevate your earnings, I am not saying

00:19:31.039 --> 00:19:36.160
anything about what it'll do to the quality of your life or your peace of

00:19:34.400 --> 00:19:40.240
mind. There are pros and cons to every path. And over a decade of being

00:19:38.559 --> 00:19:43.760
self-employed, I've learned that there is nothing wrong with choosing

00:19:42.080 --> 00:19:46.799
employment either. Whatever path our team members choose, we want to be part

00:19:45.280 --> 00:19:50.480
of their road to success, though, and we're putting that desire into action.

00:19:48.320 --> 00:19:55.120
Recently, we've taken steps to relax our policies around content creation side

00:19:52.240 --> 00:19:59.520
hustles, even in competitive verticals. And we've even taken the unprecedented

00:19:56.960 --> 00:20:03.903
step of directly sponsoring former team members who we feel are doing great work

00:20:02.080 --> 00:20:09.520
and who have strong brand synergy. [music] I am so proud to be a part of

00:20:06.640 --> 00:20:13.600
the teams that work here. But I don't know, recently I've begun to think that

00:20:11.760 --> 00:20:17.200
maybe my greatest legacy could end up being the incredible [music] pipeline

00:20:15.039 --> 00:20:22.080
that we've built for developing talent and then the future success of ex

00:20:20.400 --> 00:20:26.400
LMGers. Whatever it ends up being, I'm excited

00:20:24.400 --> 00:20:30.400
to build it together as long as it can be done while also respecting the

00:20:28.799 --> 00:20:34.400
company's need to [music] grow and protect both its own people and its own

00:20:32.400 --> 00:20:38.400
interests. Though it's important to note that with that in mind, we've reserved

00:20:36.000 --> 00:20:42.559
the right to re-evaluate our policies as things evolve. Constant change is just

00:20:41.120 --> 00:20:47.440
part of the game, you know. And you know what else is part of the game? The segue

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If you guys enjoyed this video, why not go check out how does LMG make money if

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you missed it. It's changed a lot over the years, so it's kind of worth watching the whole free video