If there is a recurring theme across the many businesses that Patriot Media chairman Steve Simmons has run over the past four decades, it is: ownership is everything.
Ownership has a lot of different meanings to Simmons. In an interview, he said it can mean the obvious, equity participation; or the abstract, the sense that people who work for a company have a say and a voice in what a business does. While financial gain can be a big motivator, Simmons said the abstract definition can go a long way to not only motivate, but to inspire.
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Make no mistake, equity is important to Patriot Media, the company Simmons started in 2002 after selling his first cable company (Simmons Communications) in 1994, and it has been a recurring thread through all of the cable companies Patriot has managed. But ownership doesn’t just mean holding onto a piece of the action. For Patriot, it is a strong sense of entrepreneurship that is one of the main drivers of its success.
“Feeling like this is our own company, that we can move quickly and react quickly to things as needed — that we’re not just cogs in a huge machine, but that this is ours — has been another guiding light,” Simmons said.
That entrepreneurial spirit is driven by empowering managers, down to the regional level, to make their own decisions and do their own analysis of which pricing, programming and marketing moves make sense in their respective areas. That in turn helps the business and its overall value grow.
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“The most important thing for us in terms of our financial interest is the equity, the upside, the value of the business,” Simmons said. “It’s not in the day-to-day salaries that are taken out and it’s not the quick flips. It’s growing the value of the business by growing the customer base, seeing that they're happy, and growing the financial metrics. With this formula, we’ve been able to grow our companies at close to 8% annualized EBITDA growth over the years. That’s a pretty spectacular run.”
Simmons wouldn’t say whether Patriot has a target level of equity participation in its deals, adding “I'll just say we have a significant interest in the company’s value increasing.”
And in the grand scheme, equity, like ownership, is a means to an end.
“Sure, equity is something that is important and has been an important financial motivator, but it's more than that,” Simmons said. “It’s the kind of environment they work in, the kind of entrepreneurial spirit they share and the pride they have in building the company and playing such meaningful roles in doing so.”
