The empire around Pornhub and Youporn has new owners
Ethical Capital Partners (ECP) is the name of the fledgling Canadian private equity firm that acquired MindGeek, the company behind Pornhub, Youporn, Xhamster and other major adult entertainment sites. There is no information on the acquisition price.
The Financial Times reports that the former MindGeek is operated under a conglomerate of current and new executives. The new executives are said to include “lawyers and former cannabis investors.”
In a press release, ECP announces the future plans for Mindgeek. It states that they want to focus on “investing in MindGeek as the leading Internet provider in the fight against illegal content online”. The company should “play a leading role in the fight against illegal content throughout the Internet”. The age verification tool AgeID affiliated with Mindgeek and its own image recognition tool Safeguard could play a role here.
Mindgeek has been ailing for years. True, the company owns some of the busiest websites on the internet. However, Mindgeek has had many problems with this for a long time.
The porn platform has been repeatedly criticized for not preventing users from uploading or viewing illegal videos. Content with child abuse is said to have been seen on the pages at times.
Things escalated in 2020 when Visa and Mastercard refused to process payments at Pornhub over the allegations. As a result, Pornhub removed most of its videos and introduced an age verification system for the people featured in the videos.
These actions led to Mastercard and Visa restarting payment services for Pornhub. However, the porn empire was still denied access to the associated advertising network Trafficjunky.
A California court previously ruled that Visa could potentially be held liable for helping Mindgeek “monetize child pornography.” Further legal issues had led to both Mindgeek’s CEO and COO, Feras Antoon and David Tassillo, having to resign in mid-2022.
So now Ethical Capital Partners has come out of nowhere and made exactly one transaction, the acquisition of Mindgeek. It’s worth taking a closer look.
How The Verge writes, the actors behind ECP are quite illustrious personalities. Its chairman, Rocco Meliambro, has roots in the Canadian cannabis industry, where he worked, among other things, as director of the National Access Cannabis Corporation. His board colleague Chuck Rifici also worked there.
According to a report by The Globe and Mail, he was said to have been involved in talks about buying Pornhub and other parts of Mindgeek as early as 2021. ECP’s senior staff includes a well-known criminal defense attorney and a former unit chief from the Canadian Mounted Police. All those involved are said to have taken part in the earlier takeover talks.
According to a presentation from 2021, the plan at the time was: restructuring, “rehabilitating reputation” and selling or merging with a SPAC, i.e. a shell company listed on the stock exchange. The presentation also noted that “the acquisition target is one of the most recognized and underappreciated brands in the adult entertainment and technology sectors.”
It is quite possible that ECP now wants to put the old plan from 2021 into practice. It can probably be ruled out that this can appease the regulatory authorities.
