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id Turns Down Activision, Gets Sued
Gamespot is reporting on an article from the WSJ, stating that id software turned down a takeover bid by Activision earlier this year. Former employee Adrian Carmack, who was let go around that time, now states that his termination from the company was the result of a subtle ousting by the other owners. From the article: "... it is Carmack's contention that the other id owners deliberately rejected all of Activision's offers so they could then fire him, thereby acquiring his shares for a fraction of what the publisher would have paid for them. He claims that his fellow co-owners, which control a combined 59 percent of id, began a death-of-a-1,000-cuts-style approach to force him out--closely monitoring his hours, stripping him of privileges, and denying him access to board-related documents. The other board members also ceased redistributing profits as dividends in 2004 (for the five years prior to that, Carmack had received approximately $3.5 million per year)." Coverage also available from Gamasutra.
They are not related.
You guessed wrong:
According to the financial daily, Carmack--who is not related to id technical director John Carmack--is claiming that he was forced to resign his position as a director of and artist at the studio earlier this year.
RTFA. They aren't related. Sheesh!
If you'd RTFA you'd see that no, they are NOT related.
"To lead the people, you must walk behind them"
No, according to the wikipedia article on him, he is not related to John.
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Adrian is not related to John.
Actually both should have been in the Summary. Also how does the rejection of Activision lead to his firing?
I'm guessing from Adrien's name that he's related to Allah (aka John Carmack). Is all this drama a result of a feud between them?
The two are actually not related at all.
In case no one said it yet, no they are not related.
/. for a all-together-now chorus post?
Hm... can I submit a feature request to
He was forced out for $11 million. There were deals proposed of buying the company for up to nearly $200 million, and since he owned 40% of the stock... he got shortchanged.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
No matter how much you may make, being stabbed in the back still hurts.
Sometimes boldness is in fashion. Sometimes only the brave will be bold.
He tried to sell out the compagny in order to get 40M$ in the process, he didnt succeed, then the others didnt trust him anymore, tried to buy his shares for 20M$, he refused, got spit out and from his contract he just can get 11M$ instead of the proposed 20M$.
He now tries to get the contract broken to get more than 11M$.
Sucker.
The Doom3 art direction could not have anything to do with this could it?
This sums it up (scroll down).
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
I should be so hurt...
"Ignorance more frequently begets confidence than does knowledge"
- Charles Darwin
Very True ,ID could manage a 9-11 Million settlement and it wouldn't really hurt that much .
If i were him , I would chalk it up to a bad decision and just get on with a nice relaxing life with my multi millions .
Court cases can go either way , the only real winners are the lawyers . He could save himself months of stress and just walk away . Though if he is telling the truth then ID need a slap .
Q: Was it his decision to sell the shares
The only things certain in war are Propaganda and Death. You can never be sure which is which though
The real question is whether the contract in question is valid or not, and if it is, is it applicable to this particular series of events. It's likely that AC will contend that he was fired without cause and that the contract was only meant to require him to sell if he did not perform. Id will probably counter by trying to show that he did not perform his job acceptably.
Right now there is no way to tell who is right. The guy could be compleately incompetent. He could have been fired for abusing employees. He could have been fired because he back-stabbed the other owners durring negotiations. It could be that the other owners are greedy bastards. There are plenty of reasonable explainations for both sides. That's why a court is going to have to work it out. If it was clear-cut, it would be settled out of court.
The policy of the United States is worse than bad---it is insane. -- Ludwig von Mises, Economic Policy(1959)
So because there are people on this planet that make 30 times less than I do, would you also have difficulty feeling sympathy for me if I lost my job? What does the guy's level of income have anything to do with it?
What is so unusual about 51% of the people screwing the other 49%?
In the board room or at the ballot, you see the same thing.
Well he does have 3 years to get a new source of 3.5 million a year too.
If he isn't worth 3.5 million a year well, sucks to be him, if he is then he has a good chance of finding a high paying job in the next 3 years.
It is hard to feel pity for someone that was living on credit with 7 figures of income, but there is every reason to believe he was and it could very well bankrupt him.
Art direction of Doom3 is pretty good proof of non-performance IMHO (I actually think the environment was sufficiently creapy, but the enemies look like shit and would have been just as scary as DOOM1 sprites).
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
This is why the I included the second sentence as the counter to my first . The moral aspect is the important thing which i was trying to highlight
The only things certain in war are Propaganda and Death. You can never be sure which is which though
I can see your point, but to me it sounds a little like a 35 year old football player complaining he doesn't get ten million dollar contracts any more.
Just because you earn more money doesn't mean you don't have to budget.
Code is Speech. No to Censorship.
Like most people who maximize spending to the capacity of their income (or speculative future ability to pay interest), it was his choice to do so. There was no dire necessity for housing, food, clothing, etc which would require him to spend in excess. If he's in dire need of continuation of these funds then he should seriously think about liquidating his assets and clearing his debts, unless, of course, he thinks he can make another 3.5 million a year somewhere else.
Imagine the wealth he would have if he'd spent/saved his money wisely? Or the piece of mind he could have if he let go of the trappings of social pressure to consume? Hell, he could've funded his artistic passion for the rest of his life if he'd been frugal with his money. I suppose, though, if it wasn't his real passion, and greed alone drives his lust for income, then id is better off without him.
Given the history of the situation this situation reads like a self-spoiled over-spender having their gravy train ripped from them after sorrowly disappointing their business partners. He gambled that he could hold out for more, and got bit in the ass as a result. Now he's trying to back out of a contract he agreed to and negotiated himself.
Stabbed in the back? Hardly. He's a greedy disappointment.
High standards of living do not have intrinsic justification. Pointing out that his bills are higher because he lives the high life really underscored the fact that he is living much in excess of the quality of life that the majority of the world enjoys, let alone the majority of the people in his own country. Even so, none of this justifies underhanded tactics take his wealth. I agree that it is hard to sympathize with a man who makes millions of dollars a year who then lost his job, whatever the reason was. I doubt he's suing for sympathy. If he is suing simply to perpetuate his standard of living then that is shameful. If he is suing because he wants to bring retribution to the people who truly conspired against him then that is honorable.
People who earn millions per year and spend as if they will continue to make millions each year forever are fools and deserve the fate they get when that high income level stops.
The majority of people earning $1 million or more per year do not sustain incomes at that level for more than 3-4 years. Eventually their sports career tanks, they're no longer on top of the music charts, or the company's board ousts them from their CxO position. When you make that kind of money, you need to save as if each year is the last year you'll make that much, or eventually you'll end up just like those broke actors and athletes who were once millionaires.
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There is inferior bacteria on the interior of your posterior.
how exactly did they FORCE him to sell his shares for less than their worth? the market wants to know!
People who make $40k a year telling people who make $3500k a year how they should act, what they should buy, and how they should live is NO different than a rich guy telling a working guy what to do. It's no one else's business.
You must have no idea of the kinds of personal expenses it takes in order to make 3.5m a year. Even $250k a year, you have to "spend money to make money", including being presentable to those who might trust you with millions of dollars worth of business.
Another thing is taxes. You DO buy the expensive home(s) as a corporate asset to get depreciation, to offset taxes, because at that level, you are paying 38% of your income in taxes, but your capital gains when you sell is 20%. (think 1.25 million in income tax, plus state income tax if you don't) Tax deductions for interest on your home starts to disappear once you get over ~150k, so yes, you do find ways to move your money around and convert income into capital gains.
Anyone who says that if they made 3.5 million, they would live like they made 50k or 100k is either full of crap, or the concept of 3.5 million a year is simply beyond their comprehension. You would get a CPA, he would tell you to do all the deductions you could, which means expenses or it is paid as tax. Its pretty easy to show on paper how it saves you hundred(s) of thousands in tax per year, legally.
So yes, it can bankrupt someone even if their lifestyle is not so extreme.
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If Activision offers $200M for your company, and you reject it because you consider it too low of an offer, then buying out Adrian for $11M is clearly underpaying him for his shares if he has anything more than 5% of the shares. If he's been receiving $3M+ in dividends, chances are he owns more than 5%. Note: Just because the rest of the owners have 59% doesn't mean that Adrian has the remaining 41%. Many of the remaining shares can be owned by the company in order to give away as employee stock options, sell to investors, or various other situations.
I highly doubt that Adrian immediately spends all the money he has cleared after taxes. Not knowing anything about him, you are making the leap from his disagreement as to the fair value of his ownership stake in the company that he help found, to concluding that he is on the verge of going broke and in desperate need of funds. Good grief.
Now, I do know a little about him. He lives just down the street from me -- literally. His home is very nice, but nothing too extravagant -- A 2200sq ft 3/2/2 in soCal costs more. I've also worked with several of his co-workers, and not one has ever described him or his lifestyle in anything but modest terms. Unless he spends a whole lot more than meets the eye on his Halloween parties, he is most likely not concerned about being unemployed for a while. He is however concerned about getting a fair deal. And you would be too, if you were in his place.
That entire post can be summed up as "oh noes, I spent all my money so I wouldn't have to give it to the feds", and that too would have been a choice that he made.
If the accusations in the article are accurate, he might be well off to include things like cruelty and poisoned work environment in his causes of action, as opposed to just constructive breach of contract.
This is what I'm talking about RE: stabbing in the back... It doesn't matter how much you may be making, if the people that you have to trust (or the people that you have trusted) make your life hell, that hurts. Even if he wins the lawsuit, I expect that he's still going to be rather unhappy.
Sometimes boldness is in fashion. Sometimes only the brave will be bold.
think 1.25 million in income tax, plus state income tax if you don't
So he's left with a measly $2M per year after taxes. If he put just one years worth of net into an average mutual fund he could easily be looking at $200+k per year in dividends. That's over twice what my family lives on, and we're doing just fine.
And I very much doubt the CPA told him to just piss his money away. It might not be liquid, but it's still there, invested in something that could be liquidated if he needed it.
Sorry, but he's only going to be bankrupted if he's a complete fucking idiot, and that certainly won't get him any sympathy from me.
Under capitalism man exploits man. Under communism it's the other way around.
While I can agree with this, anyone pulling in US$3.5m for even one year, who hasn't made appropriate arrangements by the end of that year to guarantee a comfortable standard of living for the rest of their life, is either grossly irresponsible or simply stupid. Pulling in that sort of money for any length of time, they should have investments that will nigh-on guarantee a top-tax-bracket income forever.
While it certainly sounds like the bloke got shafted, it's hard to find a great deal of sympathy for someone who /should/ have more than enough wealth in reserve to live luxuriously for the rest of their life.
So yes, it can bankrupt someone even if their lifestyle is not so extreme.
Bollocks. There's no justifiable reason whatsoever for being bankrupt after earning more money in a year (for multiple years) than most people will make their entire working lives. If we were talking about few hundred grand a year, you'd have a good point - but multiple millions/year ? No way.
You see the same thing all the time with lottery winners - they win multi-tens-of-millions but are bankrupt and often homeless only a few years later. The mind boggles at the kind of bahaviour that can produce this result.
While everyone's arguing about the man's speculative spending habits, let's get back to the point: he got fired so the company could screw him out of his shares for cheap, rather than selling out to Activision, seeing a big boost in stock value, and then having to pay full price for Carmack's piece of the property.
Under the terms of his contract, he is forced to sell his shares for 11 million, whereas if the Activision deal had gone through, they would be worth something like 42-43 mil. Fire one person, get 32 million to split with your surviving friends.. yeah, easy decision for an american.
-Billco, Fnarg.com
I'm pretty sure the normal mapping, bump mapping, good models, good textures, and the fact that enemies actually look great, completely invalidate your statement. A pixelated sprite wouldn't scare me, at least not in 2005. And I'm fairly certain that you could not have done a better job on the monsters.
Oh, and since you were being a dick, I will be too. It's spelled creepy, not creapy. Dumbass.
WHO NEEDS SHIFT WHEN YOU HAVE CAPSLOCK/ DAMN1
He wasn't the Art Director or Lead Artist on Doom 3, that was Kenneth Scott. From what I've heard his style was more colorful while Scott had a tendency towards the monotone. And since the Lead Artist gets to decide that, the game ended up that monochrome.
Justice is the sheep getting arrested while an impartial judge declares the vote void.
From what I can tell, his leaving the company was trigered by the other owners making his life hell.
In the UK this is called constructive dismissal, and can be taken to a tribuneral for compensation. Businesses cant wipe their hands of you by forcing you to quit by making your worklife hell.
A contract that forces you to sell your shares when you're fired? That is an invitation to the other owners to fire you under some pretext, when it suits them to push you out.
The same goes for stock options that are somehow cancelled if you leave the company early.
In both cases, I would decline to invest or insist on cash instead.
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Bingo. Give the Castro a cigar!
"Speaking the Truth in times of universal deceit is a revolutionary act." -- George Orwell
Made even better with the referrer id at the link level.
Kinetic stupidity has a new brand leader: Allen Zadr.
Adrian Carmack might have a good case, if Id sold the company soon after his firing, especially if Activision was the buyer. Since that never happened, I don't see how he can get around the "We decided not to sell." argument that Id will certainly be making in court. Last time I checked, there was no such law stating that a company had to accept a buyout offer just because it was a really large offer.
Now, Id isn't even a publicly traded company, right? So, stock price manipulation is not really possible, even on news relating to buyouts. This whole thing sounds like a case of, "Hey lawyer, I've been wronged. Find a way to get me some money." Couldn't you look at any business venture in hindsight and claim that there were missed opportunities to make a killing? Suing over coulda, shoulda, woulda isn't going to bring you the closure you're looking for.
Anybody who embraces the notion that the company is better sold than held and operated strikes me a rather pathetic Willy Lowman.
You see the same thing all the time with lottery winners - they win multi-tens-of-millions but are bankrupt and often homeless only a few years later. The mind boggles at the kind of bahaviour that can produce this result.
It's not really that surprising. People who don't know how to manage money have to trust someone to do it for them. It's kinda hard to find someone you can trust if you don't even know what they are supposed to do. This is probably why MOST investment funds and professional managers underperform.
The other problem is that as the amount of money you have goes up so do your basic living expenses. Combine that with the government punishing people when they save and rewarding them when they consume and you get a very predictable result.
The policy of the United States is worse than bad---it is insane. -- Ludwig von Mises, Economic Policy(1959)
"Like most people who maximize spending to the capacity of their income (or speculative future ability to pay interest), it was his choice to do so."
If I were a fortune teller, I would say that you either don't own a home or that you live in an area where housing is cheap.
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Damn straight. If I made that much for one year, I'd retire and work on open source software. I don't need a million-dollar-a-year lifestyle.
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...he saved some of that 17.5 million from the last five years so he'll have something to live on until he can find work....
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Sorry, but that one statement turned me against this guy.
Nowhere does it describe the mechanism by which rejecting the Activision offer enables them to fire him, it merely links the two. Correlation is not causation.