Everyone who has worked at Football Addicts for at least a year will be offered ownership in the company.
Previously, only three of the employees have been among the owners, the founder Patrik Arnesson and two of his colleagues. But now, a separate holding company for employees has been given 10 percent of the shares in the original company. So far, 9 out of 25 employees have bought shares in the holding company.
“Every time we hire someone we have to ask ourselves if that person makes the team better. That’s the criterium for co-ownership. If the answer to that question is ‘no’, we don’t want to hire that person”, Patrik Arnesson, founder and CEO of Football Addicts, says and adds:
“The company is the sum of its employees, so when the staff is more engaged, the company is better off.”
The new ownership system has been a long journey judicially speaking. The company has hired both experienced lawyers and accountants to make sure that the system is legal.
Here’s how it works: Football Addicts gives the employees a loan for buying shares. The employees then pays market interest on the loan. Paying interest is mandatory and unrelated to company profits, so there is a risk for the employees. It is very much like a regular bank loan.
Is there a risk that this triggers higher taxation for the employees?
“No, we’ve talked to the law firm MAQS and PWC about this, and they have said that the system shouldn’t affect the taxation of the employees. The employees have already payed a market adjusted fee for the shares”, Patrik Arnesson says.
What is the difference between giving out stock options and the system that you are using?
“With stock options you’re not getting anything back until the company makes an exit. Since we’re not planning that, stock options would be completely worthless. We want the employees to partake in the company profits, and this allows them to do just that.”
How did the employees react when you told them?
“There are positive reactions of course. Everyone who has worked here for over a year are equal owners now. It seems to be highly appreciated that we don’t separate employees from one another and say that some are worth more than others”, Patrik Arnesson says.
Football Addicts’ first app, Forza Football is the worlds second largest football app with 3 million users world wide. The app covers 560 different leagues and divisions, and user can find information about lineups, goals and video highlights, among other things.
Venture Capital firms have been trying to get an opportunity to invest in Football Addicts, but Patrik Arnesson has kept his distance. Last summer he did let Creandum buy pre-existing shares for 10 million SEK (about $1.2 million).