The logistics of dividing and awarding Smogon.com in a dissolution of marriage

fx

moon tourism
is an Artist Alumnusis a Forum Moderator Alumnus
Hello Smogoff,


Today I would like to use the expertise obtained from my career specializing in essentially the destruction of holy matrimony by attempting to figure out how Smogon (this website) would be divided and subsequently awarded in a divorce proceeding. Now, keep in mind that I can only speak to the provisions of property division as set forth by az law, so this knowledge may not apply in other regions. That being said, let's get into some of the basic concepts and vocabulary you'll need to familiarize yourself with in order to tackle this challenge.

First off, it should be established that az is a community property state. What this means is once you get married, the property you and your spouse acquire during the course of the marriage will be subject to division upon getting a divorce. Property, in this context, can be anything from bank accounts to real property⁠— it's all game, baby. Of course, this is a very minimal definition, and truthfully there's a lot that goes into calculating the extent a piece of property should be divided.

For example, let's say you owned a house prior to the date of marriage. You bought it with money you earned yourself, right? So you would think your spouse should NOT be entitled to any of it, yeah? That would make sense, sure, but here in az land, your spouse would be entitled to half of the increased value of the house.

Going back to the concept of community property, a business is also subject to division upon divorce. Therefore, Smogon.com would be subject to that same division. But there's a bit of a challenge here: in order for a court to legally divide property, it needs a value, and with Smogon not exactly being transparent with its generated revenue and overall net worth, it would be almost impossible for a court to do so. Typically, when you want to find something out from an opposing party in a divorce, you can use several methods of discovery to obtain information or documentation that's relevant to the divorce, such as business records, profit-and-loss statements, expense reports, etc.

Unfortunately, because I am not married to the legal owner of Smogon.com (unless... Chaos ), I am unable to file for divorce and, subsequently, propound discovery upon them. Therefore, we'll need to do some research and come up with rough figures, which we can hope will be close enough to the actual numbers. Accordingly, the research should yield answers to the following questions:
  1. How does Smogon.com generate revenue?
  2. Based on the question above, what is the gross revenue generated by Smogon on a monthly basis?
  3. What are some of the necessary and reasonable expenses associated with operating Smogon.com?
  4. What is the profit generated by Smogon.com after subtracting the gross monthly revenue from the monthly expenditures?
  5. How can the overall value of Smogon.com be determined using only profit?
  6. What is the value of Smogon.com?
Now keep in mind one thing: I am by no means a financial expert, so all of you finance guys may be yelling at your screens by my lack of knowledge on the subject. I am simply using what I know as a layman. Anyway, let's start with the first question:
  • How does Smogon.com generate revenue?
Right off the bat, this one is pretty easy: ad revenue. Though we do know, at some point, Smogon.com initiated a merchandising campaign, however I cannot say that is a consistent source of income for the site. Because of that, we'll stick to ad revenue as the primary source of income. To put it simply, the website will generate revenue when a user clicks on an ad displayed on the site. Advertisers will use what is generally referred to as a CPC (cost per click) ad, and that seems to be most common way to generate revenue for the website, so we'll go with that when determining the method by which Smogon.com generates revenue.
  • Based on the question above, what is the gross revenue generated by Smogon on a monthly basis?
Alright, so we know Smogon.com uses ads to generate revenue, but how can we calculate just how much is made monthly using this knowledge? Seeing as I don't have access to the financial inner-workings of Smogon.com, I'll have to use this online ad revenue calculator to figure it out. To use the calculator, I'll need to find out:
  • the number of site visits per month;
  • the page views per session;
  • the geographic value of audience;
  • the value of niche; and
  • the level of frequency ads appear for users.
While Smogon.com doesn't boast its monthly visit stats, this site does, allowing us to see how many visitors the site gets. Here's a graph showing the figures for December 2021 through February 2022:

Picture1.png


Excellent. Based on these numbers, I’ve calculated the average number of site visits to be 5,900,000. That’s the number we’ll begin to plug into our handy little calculator here.

What about pageviews per session? I think that’s the average number of pages a user will visit during their visit to Smogon.com. That site I referenced earlier actually gives us a number for that: 5.6 pages per visit.

Next, we have the geographic value of audience. Let’s look at our site results:
Picture2.png

Hmm. Based on this map, there is quite a diverse geographic visiting Smogon.com, but to the extent the audience of Smogon.com is “valuable” to advertisers? Not so hot, given they value audiences from the USA, Northern and Western Europe, Canada, and the UK. Because of this, we’ll select “Medium.”

And now we have the value of niche of Smogon.com. Once again, I’m not confident what this means, but according to the calculator, the value of niche is defined as the level of commercial opportunity available to site visitors. In layman’s terms, I take that to mean to what extent users can spend money on the site. We’ll go with the “Very low” option, in that case.

Lastly, ad placement. Based on my own browsing experience on Smogon.com, it feels like the ads aren’t super aggressive thankfully. In fact, it isn’t even guaranteed that an ad pops up when you refresh the home page of Smogon.com. For these reasons, I shall go with the “Conservative” for ad frequency.

Bingo. We now have a calculation of the monthly AND yearly revenue generated by Smogon.com. Check it out:

Picture3.png

These figures make sense, and align with the estimated annual revenue range Similarweb gave us. Because of this, I feel comfortable moving forward using these numbers.
  • What are some of the necessary and reasonable expenses associated with operating Smogon.com?
Sadly, this question will require a less calculated approach since there is no simple way of determining Smogon.com’s expenditures. We do know that some of the expense categories associated with running a large website, such as server costs, web hosting, CMS hub, Xenforo, etc. So, from there we can guesstimate the cost of monthly expenses, and I’ll be doing so using this website to give me a frame of reference. According to the cost breakdown chart, large “Multimedia Entertainment” websites range from $300 to about $2,500 per month. Since Smogon.com is as big as it is, we’ll go with the higher end of the spectrum; in fact, we’re gonna add an additional $4,000 just in case. That gives us a base of $6,500 per month in expenditures.

But wait, what about wages? Thankfully, that’s not something we need to concern too much over, seeing as Smogon.com relies on volunteer labor. But, who knows? Maybe some or all of the Senior Staff (“SS”) receive a salary. For the sake of computing a total monthly expense cost, we’ll give all of SS a salary.

Before we get into the numbers, we first need to see who we’re paying. For brevity, SS will consist of anyone who is currently a Super Moderator and Administrator. Here’s a list of everyone (as of April 20, 2022) who is SS:

Picture4.png


Based on this list, there are fourteen Super Moderators and six Administrators. For the Super Moderators, we’ll calculate their monthly income based on the az minimum wage of $12.80. Realistically, they probably don’t work 40-hour work weeks on Smogon.com, so we’ll only calculate their monthly wages based on a 20-hour work week instead. Therefore, we will attribute each Super Moderator’s monthly income to $1,109. Times that by the fourteen Super Moderators on the team, that’s an additional $15,526 being added to the total monthly expenditures.

What about the Administrators? Well, we’ll give them a higher hourly rate to account for the increased responsibilities. I like to think of them as leads of the moderation team. So, in my experience, they would probably make around $16 an hour. We’ll go ahead and give them a 30-hour work week, since I doubt Smogon.com is compliant with full-time employment labor regulations. That gives us an individual monthly income of $2,080 for each Administrator. For six Administrators thence, we’ll go ahead and add another $12,480 to the monthly expenses.

That should conclude our estimation of the cost of monthly expenses. I’m sure there are things I’ve missed, but for the sake of continuing, I feel confident in our calculations thus far. Accordingly, the total cost of monthly expenditures is $34,506.
  • What is the profit generated by Smogon.com after subtracting the gross monthly revenue from the monthly expenditures?
This one is straightforward. We’re just doing a simple subtraction using our gross monthly revenue and monthly expenses. That’s $269,755 - $34,506. That gives a net monthly profit of $235,249.

We’re so close to figuring out the value of Smogon.com, but we aren’t quite there yet. The next question is very important.
  • How can the overall value of Smogon.com be determined using only profit?
Typically, net worth is calculated by subtracting the total value of assets by the total liabilities. It’s not so clear in the case of Smogon.com, as we aren’t aware of any additional assets being held by the company. It’s also generally difficult and time-consuming to get into the complexities of calculating a business’ value, and, to be quite honest, I’ve already spent more time than what its worth on this. So we’re going to take the easy road and calculate value based on the long-term Treasury bill rate, as demonstrated by this site.
  • What is the value of Smogon.com?
What we’ll do is take the current 20-year Treasure rate of 3.01% and divide that number by our annual profit, which, based on our monthly figure, is $2,822,988. That gives us a valuation of $91,064,129 worth of T-bills (please don’t ask me what this is), which seems big and inflated, but given Smogon.com’s reach and influence in the Pokémon community, it is no surprise it’s valued as high as it is.

That brings us back to our original question: how would Smogon be divided in a dissolution of marriage? In a vacuum, it would be a 50/50 split, but that isn’t accounting for potions of the business value that is held by shareholders. Given Smogon’s affiliation with Pokémon Showdown, there’s undoubtedly a financial interest in the site held by Showdown’s owner. In terms of the divorce then, whatever portion held by the owner of Smogon (Chaos) minus the value held by relevant shareholders is what will be subject to division.

This quickly becomes a question not about the broad or vague, but rather the personal and individual. Chaos is the creator/owner of Smogon.com, so ultimately none of this concerns anyone more than it concerns him. Any chunk of $91,064,129 is no little amount, so it can be said that precautions should be taken for you, Chaos, decide on engaging in the historic legal binding of marriage.

It is for this reason that I ultimately recommend you have a prenuptial agreement prepared and signed by you and your future spouse before deciding to officially marry. I understand that love snatches the rationality from us all, which is why I am here to perform my civil duty in cautioning you against this future loss. Please do note that I am not authorized to practice law, and ultimately you should consult with the attorney above all else, but as a representative of the concerned lay man and constituent of your site, do me a favor and act in accordance to your best interests.
 
This is informative and all but I didn't see you mention the importance of artists anywhere in your OP so let me speak on behalf of the community and say that we LOVE our artists and stand with you as allies.
 
I don't know why you're so materialistic. It's not all about money. There are other ways to solve problems.

Here are two alternative ways to equitably divide smogon that I just came up with.

QZDiPkM.png

This way makes a lot more sense to me than your weird fiscal fiddlings and monetary muddling. Just split it right down the middle. It's your choice whether or not you want to have that red text appear on screen too. It makes it more clear but it might hurt the kids' psyches.

2HfyNjf.png

The other way is to give every other forum to your ex.
This way is also significantly better. It's crazy to try to assign monetary values to subforums when priceless posts are made on smogoff everyday. (Here I mean priceless as in too valuable to assign a price to, not too worthless to assign a price to. (Even though there are some of those too.))
Smogoff is clearly the best, which is the only unfair part of this method. To make up for it you can give two of the lesser used forums, like OU and tournaments, in exchange.

I hope you consider my more holistic approach to the separation of assets. It's a more whole way of approaching the issue; money makes things more complicated, not less. Anyways, I think you have bigger fish to fry: How are you gonna split up the beanie babies?
 
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