PodcastOne Paid Brendan Schaub $1.6M, While Other Kast Podcasters Were Asked to Accept Pay Cuts

Since LiveOne announced plans to acquire Kast Media in May, CEO Rob Ellin has not budged on his offer to compensate the podcasters to whom Kast owes millions of dollars. Ellin’s best offer: one-third of the money Kast Media owes them in cash, one-third of what they are owed in promissory notes to be paid over two years and one-third of what they are owed in stock from LiveOne subsidiary PodcastOne. In exchange, the podcasters must sign a multi-year agreement with PodcastOne and agree to reduce their cut of ad sales from 80% to as low as 60%.

“We’ve spoken to every podcaster. We’ve offered really fair deals — equity in our IPO to help them,” Ellin told Podcast Business Journal on Aug. 11. (Technically PodcastOne wasn’t actually going public via IPO, but making its shares available through a direct listing on the NASDAQ.) Podcasters had a tough choice ahead, Ellin explained — dig in their heels or take the settlement offer. “No other platform is going to pay them for the past,” he said. “They’re only going to work with them in the future.”

PodcastOne and its parent company LiveOne were, however, willing to pay at least one podcaster what Kast owes them in full — even if it meant taking out a high interest loan. Records obtained by Billboard show that in early August, LiveOne borrowed $1.7 million from CapChase, an online bank based in Madrid. That money, Billboard confirmed, was borrowed to pay UFC fighter-turned-podcaster Brendan Schaub what he was owed by Kast Media, the Los Angeles-based podcast company launched in 2016 by founder and CEO Colin Thomson. Kast Media, like PodcastOne, is a podcast network that provides a variety of services to podcast creators like production assistance, show distribution and, most commonly, advertising sales. Among its top shows are Logan Paul’s Impaulsive and Theo Von’s This Past Weekend.

In February, Schaub and other podcasters noticed that Kast’s payments on advertising money were becoming irregular, before falling off all together by the end of the month. By August, Kast Media owed Schaub, an accomplished podcaster with three successful shows – the Golden Hour, The Fighter and the Kid and the Brendan Schaub show – a whopping $1.6 million in unpaid revenue. A month later, Schaub and his co-host Bryan Callen announced on the Fighter and the Kid podcast that they were leaving Kast Media and joining PodcastOne.

“Brendan spoke to a number of agencies, and the company that gave us the best deal when we were out this money was a company called PodcastOne,” Callen said at the time. “PodcastOne has been the agents of a lot of people we know, and they have been very happy with them.”

A rep for Schaub declined to comment for this story. LiveOne did not respond to requests for comment.

After announcing LiveOne’s plans to acquire Kast Media in May, Ellin revealed that the deal would only close if 70% of Kast’s podcasters would join LiveOne under the proposed settlement terms. To date, PodcastOne has not announced the closing of the Kast Media acquisition. On Sept. 8, the day PodcastOne was listed on the NASDAQ, LiveOne released a statement increasing its revenue and earnings guidance for the year that included Kast Media’s revenue and adjusted earnings and assumed “the previously announced Kast Media” acquisition “would have taken place at the start of the fiscal year,” which is April 1, 2024. On Wednesday (Sept. 27), LiveOne issued a press release saying that it “reiterates” its previous revenue guidance.

That reiteration has not helped the company’s share price. In July, ValueScope, a third-party valuation firm hired by parent company LiveOne, valued PodcastOne between $230 million and $275 million, which came out to $8 to $12 per share, a valuation Ellin had hyped to podcasters considering joining PodcastOne.

That estimate ended up being overly optimistic — PodcastOne’s share price immediately dropped 46% after being listed on the NASDAQ and has since tumbled even further. Three weeks after being listed on the NASDAQ, the stock closed Tuesday at $1.91 per share with a $45 million market capitalization, a drop of more than 80% after less than three weeks of trading.

“I hope this serves as a wakeup call for creators, because long-term, they’re much better off doing everything themselves – they don’t need these big podcast networks,” says Bryan Last, president of Arcadian Vanguard and the on-air co-host of The Jim Cornette Experience and Jim Cornette’s Drive-Thru. While Arcadian Vanguard produces each episode, it started contracting its advertising sales to Kast Media in 2018, in 2023 it brought sales back inhouse.

“Any service a network offers, most podcasters can do themselves,” he tells Billboard. “When their model puts an entire community of creators at risk, there’s obviously something wrong with the model.”