Gawker founder and proprietor Nick Denton had this to say about Cablevision’s current plans to acquire Gothamist’s blogs for a $5 million to $6 million payoff:
People have a really distorted view of the value of these transactions. (I know I have a vested interest in this discussion, but bear with me.)
Sure, $5m sounds like a lot. But the sum has to be divided between Jake and Jen Chung, his partner. It’s subject to long-term capital gains — but also to New York State tax. So that’s at least a quarter off.
Let’s say Jake and Jen end up with $1.5m each. That sounds like a lot; but they’ve been at the job seven years. And my understanding is that the contract would require them to stick around for another three, making a decade in total.
So that works out as about $150,000 per year — plus any compensation under the employment agreement they get from Cablevision.
Not bad — but still better to be even a junior analyst at Goldman Sachs or a fancy Moveable Type consultant. And you don’t have to work for the Dolans.
So, Jake and Jen deserve congratulations for entrepreneurial stamina. They survived the downturn. And they haven’t killed each other yet — despite split ownership of the company. But hold off on the envy.
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