MONTREAL — MindGeek’s ultimate parent company increased the dividends it paid its owners in 2020, financial records show, amid mounting allegations the Montreal-founded online pornography giant’s platforms were hosting illegal content.

MindGeek S.à r.l., which controls a number of subsidiaries affiliated with the company’s sprawling pornography operations, paid out at least US$11.4 million in dividends to its owners in 2020, nearly US$2 million more than the previous year, according to filings made this month with Luxembourg’s business registry.

It reported just US$3.2 million in profit in 2020, down from US$30.8 million in 2019. It reported assets totalling US$106.9 million, compared with US$121.6 million the year before.

While the filings offer some insight into the state of MindGeek’s business, its complex corporate structure makes it difficult to determine its performance exactly, or who is benefiting from its operations. Profits generated by MindGeek’s many subsidiaries might not be reflected in the filing, which covers the year ending Dec. 31, 2020.

According to a December 2020 investigation by the Financial Times, two Montreal residents, CEO Feras Antoon and COO David Tassillo, are listed as the sole shareholders of MindGeek’s ultimate parent, aside from anonymous family trusts and shell companies. 

However, a third owner, Austrian-born Bernd Bergmair, also spelled Bernard Bergemar, owns a majority of the business, including a nearly 60 per cent stake in subsidiary RT Holding, which holds RedTube, a popular porn site, in addition to a number of other subsidiaries.

The true amount MindGeek’s owners earned last year is likely higher than US$11 million. RT Holding distributed US$30.5 million in dividends in 2020, compared with US$27.1 million in 2019, a portion of which could have gone directly to Bergmair. Through subsidiaries, MindGeek S.à r.l. owns 31 per cent of RT Holding.

MindGeek is highly indebted, with hefty interest payments sometimes exceeding profits, according to the FT. A deal that MindGeek’s previous owner, Fabian Thylmann, struck with lenders in 2011 to fuel the company’s expansion left it with US$362 million in debt before interest. 

The company also funnels money to the network of subsidiaries largely controlled by Bergmair. As of last year, it owed one of those companies US$200 million in debt issued when he entered the business, paid in monthly installments ranging from US$1.5 million to US$1.8 million.

MindGeek did not respond to The Logic’s request for comment.

The closely held company operates some of the most highly visited porn sites in the world and employs over 1,800 people across its offices, including 1,000 at its main office in Montreal. Despite its size and influence, MindGeek largely operated under the radar until a December 2020 column in The New York Times accused it of profiting from child sexual abuse and other illegal content hosted on Pornhub, one of its most popular websites.

The column prompted Mastercard and Visa to cut off Pornhub from using their payment services. It also led to lawsuits and international government scrutiny, including a February hearing in Canada’s House of Commons where lawmakers questioned MindGeek’s executives about their content-moderation practices. In response to the backlash, Pornhub deleted millions of videos posted by unverified users.

MindGeek’s latest filings underscore how large the porn company, possibly the world’s largest, had grown prior to last year’s backlash. It is still unclear just how much of an effect the boycotts and criticism have had on its bottom line.

In addition to its websites, MindGeek operates production studios and makes roughly 50 per cent of its revenue from advertising, its owners have said. As of earlier this year, 170 million people viewed its sites every day, including four million Canadians.

MindGeek has received offers from at least three groups of Canadian investors to purchase the company’s assets, two of which have been above US$600 million, according to The Globe and Mail. The offers have reportedly included bids by cannabis entrepreneur Chuck Rifici’s private equity firm and a separate investor group led by businessman Michael Serruya, co-founder of the yogurt chain Yogen Früz. Rifici and Serruya didn’t respond to requests for comment.