Friday afternoons — particularly those heading into a holiday weekend — tend to be a treasure trove of announcements from publicly traded companies that have to make certain details public as required by law, while keeping them largely off the radar as many newsrooms check out for the weekend. One such announcement hit my inbox at 4:19 p.m. this afternoon in the form of an 8K filed by Funko with the Securities Exchange Commission (SEC).
Today, Brian Mariotti, Director and former CEO of Funko Inc., turned in his resignation as a member of the Board and as an employee of the company. The move comes just six weeks after Mariotti ceased serving as CEO and was placed on what was touted as a “six-month sabbatical.”
Mariotti, who previously owned Funko, having purchased the company from founder Mike Becker in 2005, returned to his post as CEO last December amid a tumultuous leadership shuffle and a raft of abrupt firings that took place around Thanksgiving.
This year, despite having a solid fanbase and a steady stream of new products, Funko, which became a billion-dollar company in 2021, has continued to battle a duality between rollercoaster earnings and internal challenges to find a balance between consumer demand and opportunities for organizational and operational improvement.
In March, the company said it was reducing its workforce by 10%, and then followed the news with cuts in its Mondo division just three weeks later. In May, representatives for Funko stated that the company was facing “right-sizing.” By July, Mariotti was out and an additional 13% reduction in workforce was implemented. Last month, Interim CEO Michael Lunsford said that Funko is being “reshaped” and “run like a lean start-up.”
Under the terms of his employment agreement, Mariotti is exiting for “Good Reason” and will continue to be paid his base salary for an additional year and continue to receive company-paid premium payments — including COBRA, should he elect that form of coverage.
While Mariotti is no longer an official company employee, he has entered into a two-year advisory contract with Funko for consulting services. He will be paid $50,000 each quarter, provided he and the company do not part ways.
So what do all of these changes mean?
From an outsider’s perspective, it looks as if Funko could be prepping for an eventual sale.
Last year, Funko was subject to a $263 million strategic investment from The Chernin Group (TCG) and an investor consortium, including Disney CEO Robert A. Iger, Rich Paul (CEO and founder of Klutch Sports Group, Head of Sports at United Talent Agency), and eBay. The move gave TCG a 25% stake in the Everett, Washington-based company.
Funko is set to exhibit at The Toy Association’s Toy Fair later this month. The event begins on Sept. 30 at The Javits Center in New York City. The Toy Book will unleash its jumbo-sized Toy Fair issue that same day.
