Aardman Animation Is Giving the Company to Their Employees
themarysue.com
themarysue.com
But a coop MUST by definition distribute shares and dividends per member - if it does not then its not a coop
At Mondragon, there are agreed-upon wage ratios between executive work and field or factory work which earns a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. That is, the general manager of an average Mondragon cooperative earns no more than 5 times as much as the theoretical minimum wage paid in their cooperative. For most workers, this ratio is smaller because there are few Mondragon worker-owners that earn minimum wages, because most jobs are somewhat specialized and are classified at higher wage levels. The wage ratio of a cooperative is decided periodically by its worker-owners through a democratic vote.
Compared to similar jobs at local industries, Mondragon managers' wages are considerably lower (as some companies pay their best paid managers hundreds of times more than the lowest-paid employee of the company) and equivalent for middle management, technical and professional levels. Lower wage levels are on average 13% higher than similar jobs at local businesses. Spain's progressive tax rate further reduces any disparity in pay.
https://en.wikipedia.org/wiki/Mondragon_Corporation#Wage_reg...
How does this actually impact the day to day employee if at all? My wife is part of an "employee" owned company and all it really means is more responsibility without any real benefit other than a paltry profit sharing payout of a few hundred bucks each year. So I am a little skeptical.
- voting rights
- profit sharing (dividend)
- on leaving you would sell your shares back to the trust
- on hiring you would be granted shares (w/ cliff and vesting)
Its unclear how the trust is setup
You get your shares (there is no vesting) on day one of becoming a member - you don't automatically become a member there is normally a probation period.
Aardman is probably a fairly hot company right now. Probably prime for a purchase by one of the big studios. But then it would most likely just get broken up and turned into a mill for churning out look-a-like content. Or possibly even just a logo stamped on contracted out content. I believe the founders have been fairly clear in the past about not being interested in selling.
While the founders still own it they can just turn down these offers and stay independent, but soon they are going to retire and will have to give up ownership to someone. And that someone might just decide to take the big payout and sell. So this is their way of ensuring that the company continues to run as it is for the good of the employees. It can now only be sold if the majority of employees vote to accept the sale, and if they do at least they'll also be the ones to get any associated payout not just some profit driven owner.
If it's not hard, the studios don't need to buy Aardman. The IP they have is negligible, and no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway).
If it is hard, the studios would need to keep the employees who manage to do this hard thing, and it would be in the purchaser's best interest to manage it as if it were a butterfly.
Speak for yourself, I know I certainly do.
> it would be in the purchaser's best interest to manage it as if it were a butterfly.
Maybe so, but there is no guarantee they will do that. Remember that Disney fired the whole hand-animation department, despite the whole company being build on hand-drawn animation.
First the IP is not negligible, for a company like this the IP is their company.
Second Even if this mythical company buys them and has ever intention of "keeping the employees" and "allowing the company to run as before" a company that is consumed by a larger organization will over time loses its identity, it does not matter if both parties desire to "keep the magic" it never works. EVER. HR polices, Legal, management style etc from the larger parent ALWAYS makes it way to a subsidiary.
Pixar was able to disprove that with their franchises and I think the same is true for Aardman with Wallace & Grommet and the spin off Shaun the Sheep series.
Aardman have a look to their work that people know and love.
Edited: because I'm a nitwit who put down the wrong author. Should be this book by http://lawrencelevy.com/book/
Which book, please? Thank you.
I've corrected my post, thanks.
Which is either easily reproducible (my point A) or not (my point B). But the style of their movies is most likely not a protectable IP.
That's exactly why we took the kids to Chicken Run, having seen no trailer.
Note that we're not talking about just the style of how the movie and the figurines look like, because the assertion which we're discussing stems from the axiom that it's easily reproducible. If it is not, then it drops to assertion #2 which does not talk about IP.
That is the value of the IP of Aardman, and I'd wager it's not worth an amount that would make a transaction worth it for the big studios talked about by the grand-OP (>$100MM).
Aardman had almost complete 100% awareness in the UK thanks to Wallace and Gromit, and use of a national treasure or two for voice acting. The Creature Comforts ads that must have run for a decade or more - and still get voted in the top 5 best ads 30 years later, along with their other shorts and films. So it's difficult to generalise for areas that don't have the same love and awareness.
After 30+ years of Wallace and others, along with their production values and including plenty for the adults make it a safe bet. Like you'd also expect from Pixar. Thoroughly good it was too.
Taking the kids to a Disney movie is far more likely to give nothing to the parents, or turn out to be one of their cheapie efforts.
Probably not, because we wouldn't know it is up to Aardman quality. In the UK particularly, Aardman is the Pixar of stop-motion.
I'm guessing you're outside of the UK? I'd put my money on you being to ask 10 people at random here and at least half of them recognise the name for Wallace and Gromit if nothing else
From a UK perspective I think you're pretty wrong here. Aardman cant be separated from the style they've built over the last 30 years, and it's incredibly popular. Even if someone didn't recognise the name, you could show most people a even a single frame from one film and they'd recognise what it was immediately.
But yes I think you're right Aardman are instantly recognisable and not easily copyable.
Maybe I'd be wrong, but I feel like it would be far easier to buy a company from a group of middle-class minority shareholders than a couple wealthy owners. A big payout sounds easier to refuse if you're already satisfied financially.
Are we sure that remaining independent is the motivation here?
Sometimes a company’s owners have no one to pass their ownership down to (not having kids or their kids not wanting to take on the family business, etc). So they either sell the business off or do layoffs and liquidate and move on.
There have been instances where companies that employed a good amount of people in a town shut down due to this.
Making a company employee-owned is one way to keep it alive and operational. Sometimes it’s a better option than selling the ownership to a third party.
But then again that was just their sales pitch.
Even if you start a company knowing you want it to be a co-op, the best practice is currently just make it a C Corp and keep it that way until it's profitable and stable and no longer growing quickly. Unfortunately there currently aren't really good ways to finance co-ops, so creating a traditional company and then later converting it via an ESOP seems to be the recommended practice. I think there are some people working on better alternatives, but I don't follow the space super closely.
It gets complex but membership in a coop and being an employee of the company the coop owns are two separate but interlinked things.
When I was a member of Poptel we had a 4 page document that explained how it worked :-)
https://www.windings.com/about-us/
> Windings is a leader in the design, test, manufacture and support of custom electric motors, generators and related components including rotors, stators, lamination stacks and insulation systems.
> Windings business structure was converted to an Employee Stock Ownership Plan (ESOP) in 1998 and we have been 100% employee owned since 2008.
What about the monetary value of the company, do the employees buy it (probably too expensive, cheaper for the employees to shut it down and form a new company with the same people) or is it usual for the founders to give away the companies? Do they just keep a good percentage of the shares to receive dividends?
It’s not unusual for employees to not have enough money to buy shares outright, which is usually why business owners don’t even consider this type of arrangement. However the good thing is that these arrangements are usually structured in such a manner that the employees gain ownership via transactions from future earnings. So founders aren’t giving anything away.
Personally, I think the employees have the right to get ownership. Nothing gets produced without human labour. They may have ownership of the factory (by some divine reason), but nothing gets produced without labour (including management labour).
Union-Cooperative Strategy: https://newsyndicalist.org/2017/09/30/union-cooperative-stra...
International Cooperative Alliance: https://www.ica.coop/en
Mondragon Cooperative: https://www.youtube.com/watch?v=Mwwq3ujkfkU
Mind you - considering who shops at our local Waitrose this is no real surprise.
Setting up an EBT is a common way that worker coops are set up - for a worker coop its one member one vote and the equity is split equally between th emembers / cooperators
Its not clear if they are converting to a worker coop or not unless the workers control the trust its not a coop.
One of the benefits of an EBT is tax advantages especially if the coop gets taken over - preferably not mondraggon :-)
Louis Kelso was "the inventor and pioneer of the employee stock ownership plan (ESOP)" [1]. Kelso wrote *The Capitalist Manifesto" [2] about employee-ownership in 1958.
I think most businesses would run better if their employees were more invested in their success.
[0] https://en.wikipedia.org/wiki/Graybar
[1] https://en.wikipedia.org/wiki/Louis_O._Kelso
[2] https://en.wikipedia.org/wiki/The_Capitalist_Manifesto
[3] https://en.wikipedia.org/wiki/Category:Employee-owned_compan...
(now I can close those tabs: HN comments are much better for me to keep track of things I've read than bookmarks.)
- The economic activity of the 30,000 cooperatives in the U.S. contributes an estimated $154 billion to the nation’s total income. The co-ops have helped to create over 2.1 million jobs, with an impact on wages and salaries of almost $75 billion (Deller et al 2009).
- Cooperative businesses have lower failure rates than traditional corporations/small businesses: after the first year (10% failure versus 60-80%) and after 5 years in business (90% still operating versus 3-5% of traditional businesses) (World Council of Credit Unions study in Williams 2007). Evidence also shows that cooperatives both successfully address the effects of crises and survive crises better (Borzaga and Calera 2012).
- Since most cooperatives are owned and controlled by local residents, it is more likely to promote community growth than an investor-oriented firm. Since cooperative business objectives are needs oriented, cooperatives are more likely to stay in the community (Zeuli, Freshwater et al 2003).
- Cooperative businesses stabilize communities because they are community-based business anchors; and distribute, recycle, and multiply local expertise and capital within a community. They enable their owners to generate income, and jobs; accumulate assets; provide affordable, quality goods and services; develop human & social capital (Gordon Nembhard 2002, 2004b, 2008a; Fairbairn et al 1991; Logue and Yates 2005).
- Cooperative start-up costs can be low because: are eligible to apply for loans and grants from a number of federal and state agencies designed to support co-op development; are often provided relatively low cost loans from non-governmental financial institutions like cooperative banks because they are chartered or established to do so (Zeuli, Freshwater et al 2003).
- WAGES in Oakland CA finds that after owning the house cleaning co-op the worker-owners’ median income increased to over $40,000 (before the co-op the Latina owners had a median income of $24,000). Ownership in the co-op has put their income higher than the national average of $38,000 for Latinos/as (http://www.wagescooperatives.org/economic-empowerment)
- Food co-ops spend more revenues locally, buy more products locally, buy more organic produce, recycle more plastic, and create more jobs than conventional grocers. For every $1,000 spent at a food co-op, $1,606 goes to the local economy; for every $1 million in sales, 9.3 jobs are created (Yes! Magazine 2013).
Basically, the owner sells their shares to a trust, which then pays the owner and the employees gain ownership over a period of time as the financing is paid back.
---
I love this company. It was sad when they lost props in a fire.
Lord and Sproxton have no plans for retiring anytime soon, but they wanted to shift their priorities at the company. Lord said, “We’ve spent so much time building this company up and being so profoundly attached to it. It’s not a business to us, it’s everything, it’s our statement to the world. Having done that for so many years, the last thing we wanted to do was to just flog it off to someone.”
Sproxton added, “And we wanted to make sure they are all engaged in this employee ownership as well,” assuring their team that they won’t be in danger of a big studio buyout. Both men are committed to keeping Aardman’s uniquely close-knit culture. “There’s no real concern about the culture of the people, it’s just an asset that can be sold on in years to come,” he said of a corporate acquisition.
The studio is located in Bristol, U.K., where a team of 130 staffers run the beloved stop-motion animation company. During production, that number can swell to nearly three times that size for a feature-length film. Aardman is currently in production on <em>Farmageddon: A Shaun the Sheep Movie, which will be followed by the long-awaited Chicken Run 2.
Sproxton and Lord will join director Nick Park on Aardman’s new executive board of directors. Park, who has been with the company since its early days, directed the Oscar winning Wallace & Gromit shorts, which include The Wrong Trousers, A Close Shave and the film The Curse of The Were-Rabbit, which won Best Animated Feature in 2005. Park and Lord co-directed 2000’s Chicken Run, which remains the highest-grossing stop motion animated film of all time.
Lord said of his and Sproxton’s future with the company, “We’re not quitting yet, we are doing this because we love the company and because we love it we think this will be the best things for it. This is not about David and I leaving. It is a continuity deal. We always believed that independence was our strong suit. We didn’t have to dance to anybody else’s tune and could make our own decisions.”
This move towards continued independence and self reliance follows Aardman’s carefully hand-made approach their projects. Their films are beloved for their handcrafted aesthetic and their commitment to British humor and culture. Their latest move to share ownership ensures that Aardman will remain as charming and unique as they always have been.
[1] href="https://www.theguardian.com/film/2018/nov/10/wallace-gromit-...
What's wrong with being stable and providing a decent livelihood?
As an example, I believe there are some car manufacturers who have stated that rather than diversify into electric cars they intend to stick with internal combustion engines for as long as there is demand, then close down. It seems like a reasonable plan to me. Some investors will be happy with the larger short-term profits that derive from not having to invest in a struggle to go electric, which they'd probably fail at anyway. Other investors can sell their shares and reinvest elsewhere.
They are experts in successfully fantasizing their way to results.
As far as being risk averse or having poor growth, their employees are animators. It is not a trade you take up if you tend to be risk averse.
Growth will be judged a frame at a time, but growth is only vitally important to investors and is not that sane a metric of success.
If your idea of a company's success is how much profit it accrues, maybe it's time to question why it is you think that's a good thing.
The free market has also brought us widespread electric cars, solar panels, gas power plants. The very things with which we will combat climate change.
Socialism has brought us expanding populations globally, by offering free food to people who are not productive enough to buy it. The biggest threat to the planet now are the expanding populations of countries who still have their fertility rate above replacement rate.
Electric cars and solar panels won't save us. You're not fooling anyone with that. Solar panels are not nearly efficient enough to replace anything major any time soon, and electric passenger cars will certainly help, but they are not hitting the pavement fast enough to have any kind of impact in the timelines we need to see to avoid apocalyptic catastrophe.
Also how will gas power plants help climate change? Unless this is a different use of the word 'gas' than i'm used to, I think you're referring to natural gas, aka: one of the largest contributor to carbon emissions.
And damn, I've heard a lot of dumb anti-socialist arguments before, but "people who are not able to provide labor to a market economy should starve to death" is a new one.
Horrible indeed. The callousness of it reminded me of this exchange, loosely recalled, in the "Conspiracy" HBO movie about the Wannsee conference:
Some nazi bureaucrat: - "Hard labour? But many haven't picked up anything heavier than a pencil in their entire life?!"
Heydrich: - "Yes, and subsequently most will perish of natural causes." casually moves on the the next point
Some nazi bureaucrat: leans back visibly shaken.
Massive government investment brought us each of those.
>Socialism has brought us expanding populations globally, by offering free food to people who are not productive enough to buy it. The biggest threat to the planet now are the expanding populations of countries who still have their fertility rate above replacement rate.
If we are attributing threats, I'd look closer to home.
I view a carbon tax in the same way. It's an easy way for companies to continue with whatever their doing and they replace any guilt they may have with an easy payment. It certainly isn't going to solve much, because it removes any real chance of accountability. It is not a significant enough incentive for them to implement impactful change.
The free market may help create solutions, but it will not sustain them. Reversing climate change will not be a profitable endeavor in the short-term, and unfortunately market success is a greedy algorithm.
It's a complete contradiction that a free market could ensure conservation, since it relies entirety upon consumption, and market success is about who consumes the most.
Link to article about Israel day cares: http://freakonomics.com/2013/10/23/what-makes-people-do-what...
Too right. If the USSR had come to dominate we wouldn't be using fossil fuels.
https://www.economist.com/business/2013/11/09/trouble-in-wor...
We live in the bubble in the technology sector because growth is easy (data can be redistributed cheaply and we can work on an international scale right from the off). But for an animation studio that would mean having to write more scripts and thus potentially diluting their brand with inferior stores.
When You think about where Aardman began (stop motion animation that could take years just to produce one half hour TV movie), you can really see that the company is built around the love of animation rather than being a mass producer of family content.
You say this like it's a bad thing?