A day after venerable TV-centric media company CBS acquired CNET for $1.8B, print-centric media empire Conde Nast steps in and acquires Ars Technica for $25M, according to Tech Crunch.
Time Warner bought Weblogs for $25M in 2005, the same price Conde Nast paid for Wired last year.
I don’t know, it’s not a bad deal, Conde Nast makes $25M with the sale of one magazine spread (you know what I mean) and traditional media companies need to bolster digital assets, but I think for a company like Conde Nast (so reliant on print) needs to think more about online video than online text content.
Online video is a brave new world - all incremental - for print. For TV, online video is cannibalistic. These companies need to be more aggressive with online video (where their print-based skills are not necessarily transferable) and move their own assets online; by buying up text-based online publishers they tend to fall short over time.
But, I am biased, of course.
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WatchMojo NewsletterEditor’s note: this week we commemorate the 2-year anniversary of the lawsuit that almost killed Mojo Supreme back in May 2006. See Part 1, 2, 3, 4, 5, 6, 7, 8, 9, or read on for Part 10, below:
Tuesday morning was the day when the Judge would be rendering her verdict. After my bruising defense the previous day, I was pretty confident that WatchMojo.com would not be shut down. The only thing that worried me was that the Courts might throw their lawyer (the outgoing President of the Bar Association) a bone.
The Verdict
To win the provisional injunction, they would have to pass four tests.
The Judge began to deliver her conclusions:
The Petitioners did not pass the first test of urgency. It was over!
Throwing Me a Bone
Now the Judge could have stopped there, for failing to pass any single test is a failure to pass the motion. However, the Judge went on to add that they did not pass a second test, either.
Indeed one judge can conclude one thing and another judge can conclude something entirely different, but by telling them that they failed two of the four tests, then it sort of hinted that they would not be able to obtain an interlocutory injunction, either.
The relief… the joy. I had won. It was official… and based on the judge’s comments, I would not be shut down, ever. In case you are wondering, today is technically the 2-year anniversary of that day.
But, No Settlement in Sight
In her closing remarks, the Judge then encouraged us to settle the matter amicably… even stating “Monsieur Ashkan seems to hold no grudges.”
I didn’t. I’ll always forgive, but I’ll never forget.
Not within a second of her recommendation did their lead counsel get up and say “we’re moving forward to the Interlocutory Phase. My clients have spent a lot of money in the acquisition and they feel strongly about it.”
While AskMen had stirred the pot, IGN was driving this and was willing to foot the bill.
The Judge had no choice then but to give us a date for the next phase.
We were now May 16th, one week after their pre-emptive strike. We were now asked to return May 29th for the next phase: the Interlocutory Injunction.
New Stage of War
While I was hoping for the dawn of a peaceful era, we were about to go to war. So be it.
Bear in mind, thus far, I was pretty diplomatic, even smiling under the rain of fire and reign of terror. The lawyers’ statement – devoid of any hesitation – meant that I’d need to go on the offensive.
When a boxer steps into the ring, he might be trying to hurt the other guy enough to win, but he does not try to make the guy become a vegetable. I was going to make stew out… but I knew that I’d still have to be careful about how precisely that would happen.
The previous day, after my trial date, I published the first blog entry. Up to then I did not publish anything, which was a mistake, frankly, because it gave them no incentive to end matters.
Planning for Phase 2
I took a couple of days to relax. But it was clear that we’d be moving ahead to the next phase. I thought of opening a dialog but by now, I felt confident about winning Game 6 (the Interlocutory Injunction stage) and there was really no way that they would win the Merits stage (Game 7).
I was in no mood to capitulate; but IGN made a mistake. They should have sent their lawyers in to settle with me because they could still have a shot at walking away with a semblance of a victory… or should I say, avoiding an even more embarrassing defeat with the specter of walking away empty-handed.
That week I spoke to a few more lawyers: it was one thing to be confident; it’s another to be arrogant.
I was in the driver’s seat so I did not want to lose now over a procedural lapse. But the fact remained, even by that stage, I was still looking at a $50,000 to $150,000 bill nonetheless.
Managing the Clock
As the May 29th date got closer, my confidence turned to trepidation.
As much as I wanted a clean fight, I knew that they would not allow for that and would resort to tricks of the trade. So I decided to get clever myself.
For one,
- the Share Purchase Agreement we signed on May 27 2005 (when IGN bought AskMen) had a non-competition agreement with a term of 2 years;
- the Termination agreement I signed in December 2005 when we parted ways had a non-competition agreement with a term of 1 year.
In my heart, I would have honored the 2 year one just to be on the cautious side (if I wanted to launch a competitive business in the territory, that is). However, as I’ve mentioned before, the Courts do not like complicated or confusing employment agreements. If there is any ambiguity, Judges strike down the agreements altogether. They will not accept one part and reject another.
In a worst-case scenario, I would have argued that the agreement we signed last was the pertinent one, and this meant that the non-competition was valid until December 31 2006.
In a best-case scenario, I knew that no Judge would accept that clerical mistake to begin with, and the entire agreement would be struck down. This was also why I had not argued against the worldwide territory.
This was all moot for the agreement was altogether ambiguous and excessive.
But the point was: if I could get the expiration of the non-compete to lapse, this would all be moot.
Mr. Bean Strikes Back
I had studied injunctions inside out, I knew the intricacies of non-competition agreements like the back of my hand… studying a lot of jurisprudence cases my attention turned to motions to dismiss and summary judgments. I decided to prepare to move a motion to dismiss. I naively thought I had a chance to have the motion granted and have the case thrown out of court.
I spent the week of May 22-26 preparing the motion to dismiss. I went through the steps, even getting a bailiff to submit the paperwork to their lawyers on the Friday 26th of May.
As I say, Mr. Bean would have been impressed.
I can only imagine that my erstwhile partners were frustrated by the devastating loss at the Provisional Injunction. Once their lawyers told them that I was trying to get the entire case dismissed, I presume they began to worry. Not because I necessarily had a chance to obtain that motion, but because they probably began to realize that the script they had been sold was not the one that we were acting to anymore.
As I have all my life, I always write my own script. Come Monday, we’d be walking to the beat of a new drummer and change the tempo altogether.
That Friday, as the papers were being delivered to Fasken Martineau’s offices,
- I emailed IGN CEO Mark Jung, Executive VP Dale Strang and a few others at IGN and gave them one last chance to settle. Dale accidentally Replied to All, simply adding “What a Putz”.
I am glad they were amused because indeed we’d be having a great laugh in the months that would come.
- I also finally decided to go above Mark and Dale and emailed Ross Levinsohn, CEO of Fox Interactive Media, whose email I had from my News Corp. days. Ross did not answer. I basically told him that suing ambitious entrepreneurs was not a good business decision and left the door open for any kind of resolution.
Incidentally this was the second time I’d email Ross. Back in the fall of 2005, when I was losing my mind becoming redundant at AskMen, I had emailed Ross asking if there were any career opportunities at the Fox Interactive Media level. For what it is worth, I am a pretty loyal person and I did have a debt of gratitude to AskMen, IGN, FOX Interactive Media and News Corp. so if they wanted my services, I felt like they should have first dibs. Naturally, Ross did not answer me in 2005, nor did he in 2006. I’m sure that he thought I was some nut.
Who knows: maybe that email in 2005 made the rounds and that is one more reason Ric and Mark came at me so hard in 2006.
Right now, it’s all moot, but it is an interesting footnote in this history nonetheless.
Monday May 29th 2005: A Tactical Waste of Time; a Strategic Coup
That weekend came and went. Monday we got to court. We entered the main courtroom where all lawyers are given a time and assigned a Judge. Initially there was no sign of their lawyers, so I naively thought “wow, maybe they won’t even contest my motion and I will win. Could it be that easy?”
Hmm… nope. They called our file name, it turns out their lawyer had a case that morning, so they had sent in a junior lawyer to enter their plea: they would contest my motion, obviously…
We wasted a whole day waiting. Finally, by the early afternoon, it was showtime. To my chagrin, their all-star lawyer showed up but he was alone in representing their forces. Since I was passing the motion, this time I was sitting to the Judge’s right, them to the left.
We sat there in the courtroom waiting for the Judge. A little bit of a small talk ensued… and then the outgoing President of the Bar told me that he would be moving a motion finding me in default, or at least, finding my company 6059350 Canada Inc., in default.
It was not a welcome gesture, but I was not phased. I viewed it as a sign of desperation and frustration, frankly.
I said “you do what you have to do, and I will do what I have to do… “ adding “besides, I don’t think that will hold, because a Judge will not uphold that decision if I am not guilty personally… and you know I am not.”
He then cut me off and added he “didn’t care what I thought”.
The small talk faded to silence… but then, out of nowhere, before the Judge entered the room, he told me:
“I can make you an offer,”
For one of the few times in my life, I kept my mouth shut and let my confrere talk:
“I do not mind joining the next two trials in one event: we can combine the Interlocutory Injunction and the Merits into one trial”.
“I’ll think about it,” thinking he had no reason to be nice to me, so I knew there was a catch… but in the odd chance he wanted to end this charade, I did not want to be ungracious, either.
Before long, the Judge entered the room.
We got up and began to dance again:
I presented my case, then he made his case. The Judge took all but 1 minute to side with them. There was a matter to be discussed and we would have to discuss it: I could not have the case tossed out altogether.
The Trojan Horse
But, far more importantly, since I had used up this date (previously earmarked for the Interlocutory Injunction), then we would have to get a new date for that next phase.
As luck would have it, we were entering the summer season where most lawyers, judges, bailiffs and clerks go on vacation… so we could not get 3-4 days in a row (what they had initially said was needed for the case) any time soon.
As we left the courtroom, he had technically won a very small skirmish (I would not even call it a battle).
As we stepped out of the courtroom, greeted by a beautiful sunny Montreal afternoon, he turned to me and matter-of-factly said “ok, I will be finding your company in default”.
I turned to him and said: “ok, I guess I will have to start studying defaults then” – he offered me a piece of gum.
“No thanks” - he turned left and walked to his office; I turned right to walk to mine.
Patience is a Virtue, After All
Ironically, on May 10th I could not wait a day, wanting to step into the right then and there. Yet now, I was in the driver’s seat and had all of the time in the world.
But, I had to hire a lawyer to get me out of this default mess: as much as it was a mere procedural gimmick (and one hell of a desperation sign), I did not want to get over-confident now.
Up to now, between all of the aborted mandates, bailiff fees and training costs, my legal defense had cost me less than $10,000 (precise figure was probably closer to $7,500). I knew that I would need to have a lawyer and compared to the astronomical fees I was expecting this to cost me initially, spending $10,000 to $25,000 (if not even $50,000) was suddenly something I did not mind doing because I knew I would win and make up all of that money over time.
For one, having made such a big deal out of our company, I was emboldened into thinking that maybe we were onto something far bigger than even I had envisioned.
Part of this attack was obviously personal, but there must have been something of value, too, for them to waste so much value on me, no?
Any Lawyers Want to Take My Money?
Ultimately, I found a lawyer, finally, and decided to fight this right. We reversed the default and got a date for the Interlocutory Stage: January 31 and February 1 2007; yet my non-compete was expiring on December 31 2006. You read that right. This bad boy was now moot. I did have another non-competition expiring May 27 2007… but their lawyers would not have been that stupid to raise that point, because this would concede that there were two term expirations and gotten everything dismissed…
My lawyer told me this made everything moot, though previously, their lawyers had said they could always come after me after the expiry of the non-compete. I guess the truth is somewhere in between… right now I could care less.
ASSYMETRICAL and PARALLEL WARS
By now, I had everything on my side. But for reasons that to this day remain murky, they did not throw in the towel or even try to settle. They decided to keep fighting. The only thing I could imagine, frankly, was that they expected me to get tired of spending money. After all, my lawyer’s meter was now running and simply catching up to the details thus far would take days if not weeks.
So, I decided to launch a parallel war.
While I had only began to blog about this mess on May 15th after returning from the trial, confident of a victory, once it became clear that they were harassing me, I went ballistic.
I opened a new front and launched a war in the court of public opinion. I would publish pieces of evidence that showed they had no case and what they had was in fact meritless and frivolous. There was a method to the madness. I would also reveal small, largely irrelevant but highly entertaining and embarrassing things. None of them were made up; it simply revealed who I was dealing with. In fact, having proof that they had perjured themselves, I knew that I could even counter-sue them. But who would be stupid to do that?
Cross Examinations for the Depositions
As we prepared for the Interlocutory Injunction, my lawyer and I began to cross-examine the affiants. While Dale Strang and Todd Murtha had listed a laundry list of accusations against me in their affidavits, if I wanted to cross-examine them, I’d have to foot the bill and fly them down. So I did not do that, however, I decided to spare no expense and put all of my AskMen colleagues through the questioning.
Surprisingly, I was having fun with the ordeal.
I was not phased one bit.
Sure, on some levels, I was losing my mind but I was going to win now no matter what.
Quarterbacking the cross-examinations but letting my lawyer go through the motions, I gave them a taste of what to expect at a trial where I could introduce evidence. By the time I would be done mopping the floor with them, they would not be able to land janitorial jobs.
But beneath the bluff of wanting to continue the legal process, I wanted to end it badly so I upped the pressure.
If they would be attacking me in the legal courts, I would attack them in the court of public opinion. That’s when I began to blog more and more.
I limited my attacks on my AskMen colleagues and not the IGN staff and certainly not on the News Corp. brass. For one, then and to this day I never viewed News Corp. or Fox Interactive Media as my adversaries, it was clear to me that this was Mark Jung, maybe Dale Strang and largely Ric Poupada who were leading the charge…
Poupada’s two co-founders Chris Rovny and Luis Rodrigues had dirty hands too, so while I could barrage Ric, Chris and Luis with arrows and bullets, saying too much to irritate Mark or Dale would simply give them more incentive to keep spending money, whereas embarrassing my backstabbing former partners and creating havoc in AskMen’s boardroom would divide them and make them give up.
To add insult to injury, I wrote so much (something like 120,000 words across 100 posts from June 2006 to January 2007) that it began to prove costlier for them, no doubt: I have no doubt that the more-than-willing-to-charge lawyers printed out every page I wrote, read the material and charged them for it. I can only pray and hope so.
On my end, I told my lawyer that he was free to read my posts but that I would accept all responsibility and not pay for any time he spent on that. Otherwise, I’d be broke!
I realize my lawyer probably thought I was crazy, but it was all calculated. I knew that as the legal fees added up on their end, someone would eventually say WTF are we doing up there?
That’s how corporations are: in good times, money is no object. In bad times, everyone looks at the tab. As I expected, by then, word got out that a settlement would be possible.
Changing of the Guard
From the get-go, this was a very personal attack on me by a handful of individuals. Given that everyone on their end was leaving to go on holidays, a quick and speedy resolution took months.
I did not let up. The monthly posts turned into weekly diatribes. I was almost going to start daily rants. In fact, things slowed down so much that I even considered launching a defamation lawsuit and really putting pressure on them to leave me alone.
I ran into Chris in the fall of 2006 at a launch party. Just a week before that chance encounter, a piece came out in our alma mater’s magazine. Our mutual friends knew who was who, and by then, I guess they were embarrassed with their outsized aggression. Everyone at our school could imagine how much I’d hustled for them, so reading about the lawsuit must have embarrassed them so some extent.
Chris and I chatted a bit and I was cordial, I told them we should put this behind us… but I doubt Chris had all that much sway in the broader picture. Chris suggested that they lost in May because the Judge did not “get” the Web, which was false. She did get the Web and she certainly got business and media… alas, this was hypocritical for they were betting on landing a Luddite Judge in the hope of fooling the court in shutting me down.
Then one day, the changing of the guard began:
- On November 4th 2006, former IGN CEO Mark Jung resigned.
- On November 16th, 2006, Ross Levinsohn resigned as CEO of FIM.
- Dale Strang was elevated to CEO of IGN, but as new blood came in, I guess the notion of suing an entrepreneur who had not done anything wrong was inconsistent with the fact that News Corp. was aggressively courting entrepreneurs and new media startups.
I got a sense that if I kept my nose clean, then maybe this nightmare would soon end. By now, I had accumulated legal bills edging close to $25K.
By January 2007, we were getting closer to resolving the matter but we were getting awfully close to the next round. I recall at one time embedding that video of Donald Trump threatening to take money out of Rosie O’Donnell’s fat face and hinting that I was going to counter-sue them for defamation and turn the tables on them.
Throughout the month, I stuck to my guns. I won’t and legally can’t comment on the details therein, but I’m still here, WatchMojo.com is kicking ass and I can now say that after this week of introspection, I am finally at peace with the fact that I spent 5 years of my life toiling away for a bunch of assholes who then sued me.
When the dust settled, the whole thing cost me about $35,000… not too bad.
So be it. There are worst things that can happen. I figure they spent $100,000 to $200,000.
SINCE THEN
Apart from running into Chris then, I never spoke to him, Luis or Ric about the entire saga. Strangely enough, this Monday evening (four days ago), I ran into Ric at the gas station next to our office. We said hello and exchanged a few words. That was it.
As per the IGN guys:
By mid-2007 I reached out to Richard Jalichandra, who is now CEO of Technorati, for no reason other than to start making mends with the executives at IGN who were now scattered all over the place.
In late 2007, I contacted Dale Strang to inquire about a potential business deal for a company I was advising; I thought it was a good fit with News Corp.’s Fox Interactive Media. While I expected a lot more from an experienced professional like Dale, I don’t really hold any grudges or ill feelings. The only odd thing: why tell me in December 2005 that they would invest in my company? There was no reason to lie about that, just say “Ash take this package and leave our company, now. You are persona non grata”.
As per Mark: sure, it wasn’t cool for Mark to try to put the kybosh on me, but even there, I don’t care all that much anymore. We exchanged a few emails last year and I guess the whole affair is pretty ridiculous now, with hindsight. He’s CEO of Vudu. I am still trying to figure out what Vudu does… I’d be curious to see what on earth he was thinking, though, especially since I had asked him to sit on my board in January 2006. In fact, last year when I was considering doing an angel round with 4 non-media angel investors, I asked Mark if he wanted to invest too, in order to beef up the media DNA.
In case you are wondering, I did not do the angel round. I did not do that round for two reasons. I won’t lie to anyone, including investors, just to close a deal. But more importantly, what the lawsuit taught me was don’t sign a contract if you feel that there is an ambiguous, unfair or potentially troubling clause in it.
Ultimately, if the lawsuit did anything, it strengthened our company and gave me more control: three months after launching, in March 2006, a venture capital group took an interest in our company. We were into mid-staged talks to raise $1M when I got sued. That obviously put things on hold. The investors told me to get back to them when things got resolved… which was technically seven months later in February 2007.
By then, our company was coming along and today, eighteen months later, I can say we’re self-sufficient and I do not need outside funding anymore, which is a bit odd because had I not been sued, I would probably have raised a Series B round by now, but not be in control of the company anymore. Is that good or bad? I don’t know… but in their desire to put the kybosh on me, they strengthened my hand, increased my resolve and reduced my willingness to be stepped on in talks and negotiations.
In May 2007, I was at the Economics of Social Media shindig when I spotted Shawn Gold, MySpace’s VP in the back of the room. So I gathered my confidence and walked over, introduced myself and asked him if MySpace was looking for professionally-produced, high quality videos. He took my card, looked at me… and didn’t say much. I have no idea if he knew that I was once employed by News Corp., and sued by their sister company, too.
I did not hear much… but then one magical day, I got the following email:
To Whom it May Concern:
I’m writing to request a business development contact to discuss a possible video partnership with MySpaceTV.com. Can you please put me in touch with the appropriate person? Thank you in advance for your help!
Wow. Who would have thought? They were now coming to us… If that was not enough… a month or two later, we also struck a deal with Hulu, owned 50% by News Corp. It was like things had come full circle. I never got an apology or an explanation, but I felt vindicated.
Ultimately, there are a hundred ways that IGN could have handled things better. I’d list those, but last time I suggested a few ways for them to improve their business, they sued me. So we’ll leave it on that note.
There you have it: Closure.
The End.
Bloggers will eat this up, but I for one doubt it and will believe it when I see it.
News Corporation reportedly courts US rapper 50 Cent with $300M offer to join the MySpace Label.
Hmm, something tells me, this is not true.
For one, even when the music business was a good one (was it ever?), Murdoch wisely stayed away from it. Notice that when News Corp. paid $580M for Intermix - parent of MySpace - it was largely to increase exposure to music’s upside without exposing himself to the negatives of the trade.
MySpace has wisely leveraged its musical assets (content, artists’ reliance, etc.) but that only makes sense for up and coming bands… I cannot imagine Murdoch paying $300M to an artist. He would probably use that to buy more assets, especially with his arch-nemesis Sumner Redstone plunking down $1.8B for CNET, owner of MP3.com and Gamespot.com… meaning that between Last.fm/MP3 and Gamespot, Redstone is firmly locking horns with Murdoch’s MySpace and IGN.com/Gamespy.
Why is the 50 Cent deal so crazy?
The rumored branding agreement would also dwarf the size of the $120m offer that in October enticed Madonna to leave her longtime Warner Brothers record label for concert promoting company Live Nation.
Yeah, don’t count on this… though crazier things have happened in the music bizness.
PLAY
