# The TRUTH about How LTT SPENDS Money

Source: https://www.youtube.com/watch?v=omCWNO7Jbnw
Recap page: https://rapidrecap.app/video/omCWNO7Jbnw
Generated: 2026-01-15T19:05:46.114+00:00

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## Quick Overview

Linus Media Group's 2024-2025 projected expenses are dominated by Inventory Purchases (26.5%) and People (25%), totaling 51.5% of expenses, while the company maintains a significant 15.5% profit margin and reinvests 1% into Capital Expenditure, reflecting a business structure where merchandise and payroll are the largest costs, rather than external factors like media group competition or high executive pay.

**Key Points:**
- Inventory Purchases (26.5%) and People (25%) account for the largest portions of LMG's projected 2024-2025 expenses, combining for 51.5% of the total.
- The company projects a 15.5% Profit margin for 2024-2025, indicating strong financial health despite high operational costs.
- Product Fulfillment (10.25%) and Overhead (10.5%) are the next largest expense categories, showing significant costs associated with the Creator Warehouse merchandise business.
- Capital Expenditure, which covers new equipment and facility upgrades, is projected to be 1% of total expenses.
- The CEO's median compensation ratio to the median worker's salary is estimated to be between 5:1 (~$400,000 CAD) and 10:1 (~$800,000 CAD) for 2024, significantly lower than the 331:1 ratio cited nationally.
- Internal departments like HR, Accounting, Events, Infrastructure, Logistics, and Operations account for about 2.5% of total expenses combined.
- The company actively reinvests in its team, noting that median salaries are well above the local living wage in British Columbia (e.g., Greater Vancouver average income was $64,200 CAD in 2023, while LMG's median employee salary is projected to be over $80,000 CAD).

![Screenshot at 0:06: The pie chart illustrating the Linus Media Group 2024 Revenue breakdown, where Creator Warehouse \(55.4%\) is the single largest source of income, overshadowing YouTube Adsense \(11.6%\) and Sponsored Projects \(12.5%\).](https://ss.rapidrecap.app/screens/omCWNO7Jbnw/00-00-06.jpg)

**Context:** This video breaks down the projected financial expenditures for Linus Media Group (LMG) across its various operations for the 2024-2025 period, following previous discussions about how the company generates revenue. The presentation aims to provide transparency regarding where the money goes, moving beyond mere revenue streams to detail operational costs, staffing, merchandise fulfillment, and executive compensation structure in response to audience curiosity and prior controversies.

## Detailed Analysis

The video details Linus Media Group's projected expenses for 2024-2025, showing that the largest expenditure is Inventory Purchases at 26.5%, closely followed by People (payroll) at 25%, totaling over half of all expenses. Product Fulfillment (10.25%) and Overhead (10.5%) are also substantial, reflecting the costs of running the Creator Warehouse merchandise operation. Tax Installments are projected at 8%, Profit at 15.5%, Selling Costs (like payment processor fees) at 3.25%, and Capital Expenditure (new equipment/upgrades) at 1%. The video addresses concerns about executive compensation by presenting the CEO's pay ratio relative to the median worker's salary, estimating it to be between 5:1 and 10:1, significantly lower than the 331:1 ratio cited nationally for comparable companies. Internal supporting departments (HR, Accounting, Operations, etc.) collectively account for about 2.5% of expenses. The speaker emphasizes that LMG pays its employees well, with median salaries projected to be over $80,000 CAD, significantly higher than the Vancouver living wage average of $64,200 CAD in 2023, demonstrating a commitment to talent retention. The video concludes by highlighting ongoing efforts to improve operations, such as opening international distribution centers and managing internal vs. external projects transparently, acknowledging that while perfect financial management is elusive, the company is actively working to optimize its spending.

### Revenue Sources (2024 Projection)

- Creator Warehouse at 55.4%
- Sponsored Projects at 12.5%
- YouTube Adsense at 11.6%
- FloatPlane at 7.2%
- In-Video Sponsor Spots at 9.2%
- Affiliate Links at 3%
- Other Revenue at 1.1%

### Key Expenses (2024-25 Projection)

- Inventory Purchases at 26.5%
- People at 25%
- Profit at 15.5%
- Product Fulfillment at 10.25%
- Overhead at 10.5%
- Tax Installments at 8%
- Selling Costs at 3.25%
- Capital Expenditure at 1%

### Executive Compensation Ratio

- CEO-to-Median Worker pay ratio estimated between 5:1 (~$400,000 CAD) and 10:1 (~$800,000 CAD), much lower than the 331:1 national average.

### Internal Support Costs

- HR, Accounting, Events (Whale LAN), Infrastructure, Logistics, and Operations combined account for approximately 2.5% of total expenses.

### Employee Compensation Context

- Median salary projected over $80,000 CAD for 2025, significantly exceeding the Vancouver, BC, living wage median income of $46,300 CAD (2023).

### Operational Focus

- Efforts are focused on internal optimization (talent retention, infrastructure upgrades) rather than seeking outside capital, as demonstrated by avoiding external investment and reinvesting profits.

![Screenshot at 0:06: The pie chart illustrating the Linus Media Group 2024 Revenue breakdown, where Creator Warehouse \(55.4%\) is the single largest source of income.](https://ss.rapidrecap.app/screens/omCWNO7Jbnw/00-00-06.jpg)
![Screenshot at 1:28: The pie chart displaying the Linus Media Group 2024-25 Expenses, highlighting that People \(25%\) and Inventory Purchases \(26.5%\) are the largest cost centers.](https://ss.rapidrecap.app/screens/omCWNO7Jbnw/00-01-28.jpg)
![Screenshot at 2:52: The speaker holds up the LTT-branded water bottle while humorously questioning the need for European distribution centers due to high shipping costs.](https://ss.rapidrecap.app/screens/omCWNO7Jbnw/00-02-52.jpg)
![Screenshot at 4:43: A shot of the tech/equipment storage area with '1%' overlaid, representing the small portion of expenses allocated to Capital Expenditure \(new equipment/upgrades\).](https://ss.rapidrecap.app/screens/omCWNO7Jbnw/00-04-43.jpg)
![Screenshot at 11:53: A job opening listing for a Full-Time Camera Operator at Linus Media Group in Surrey, BC, showing salary ranges between CAD $60,000 and $71,400 per year for entry-level roles.](https://ss.rapidrecap.app/screens/omCWNO7Jbnw/00-11-53.jpg)