Drama at CRTV/PokerGo: Cary Katz suing own company, apparently to avoid paying court judgment

[Dan Druff]

For those of you that don't know, CRTV owns PokerCentral, which in turn runs PokerGo.

What is CRTV? It's a premium, politically conservative web video channel.

Among others, Steven Crowder, my favorite YouTube personality, is featured there.

I almost subscribed there in February just to support Crowder (I didn't really care about the other content, and I get enough of Crowder on YouTube), but I got irritated that the advertised $69 price wasn't really available to me, so I said fuck it and closed the window.

Now I'm glad I didn't, but it has nothing to do with Crowder.

Check out this confusing but interesting story regarding a weird lawsuit filed 2 weeks ago....

On April 20, Cary Katz, the primary owner of CRTV, filed suit against his own company, supposed for failure to repay a $20 million loan he gave them. Here's the Las Vegas Review Journal article about it: https://www.reviewjournal.com/local/...over-20m-loan/

That by itself is kind of strange, but it goes a lot deeper.

Let's rewind back to February 2017.

CRTV was just 4 months old at that point.

Host Mark Steyn, who was personally recruited by Cary Katz, had a show on CRTV which had only been running for a month.

For reasons not completely clear, Steyn was fired. Steyn himself has not fully explained why he was fired, and there are conflicting reports as to the reason for the firing. It does appear that the firing was at the behest of Cary Katz, who is seen as the one with ultimate power at CRTV.

CRTV sued Steyn for breach of contract:

CRTV contends that while Steyn agreed, by contract, to host the Mark Steyn Show, he “aggrandized” his role and became the executive producer. In so doing, they claim that “he failed to assemble a staff, failed to create a budget, failed to set a schedule, failed to implement structure, failed to rehearse, and failed to treat the crew with respect; and, because of these failures, failed to create enough content for the show, thereby destroying it.”

The above was taken from a summary of a judge acting as arbitrator, which you can read here.

Basically CRTV was asserting that Mark Steyn was a disaster as executive producer of his show, and also mistreated his staff. An article on the (biased) DailyBeast site also seems to indicate this.

Steyn does not really provide a reason as to why he was fired, but claims that CRTV's stated reasons are lies.

Anyway, Steyn countersued for $4 million.

They agreed to settle it by binding arbitration.

For Cary Katz, that was a



The arbitrator was very much on Steyn's side. I didn't bother reading the complex contractual legal discussion of the matter, because I don't care enough about it, but basically Katz finished with the worst result possible. CRTV lost its $10 million suit, and Steyn was granted the entire $4 million counterclaim. The decision was handed down on February 26, 2018.

CRTV then tried to ask for the judgment to be halved, taking the matter to the New York Supreme Court.

That was rejected on April 19, and the judgment was finalized. CRTV officially owed Mark Steyn $4 million.

One day later, on April 20, Cary Katz was suddenly suing CRTV for an unpaid loan.

It is assumed by some that Katz's lawsuit is simply an accounting trick in order to bankrupt CRTV, and to avoid the company having to pay its obligation to Steyn.

If CRTV is intentionally bankrupting itself, it may cease to exist fairly soon. That might also be the end of PokerGo, which would be interesting if it happens during the WSOP. (I wonder if the WSOP is even aware of this entire mess!)


Here is Mark Steyn's take on the matter: https://www.steynonline.com/8597/crt...yn-the-verdict

I also wonder what will happen to hosts like Steven Crowder, who largely depend on CRTV for their income, now that YouTube has mostly demonetized them.

I'm assuming Crowder probably gets a set salary with CRTV, and then gets a bonus for each signup directly through Crowder (which is tracked through "Mug Club" -- a free mug subscribers get if they sign up through Crowder.)

He's currently employing about 20 people (though most are part-time), and he's not going to be able to afford that if CRTV pulls the rug out from under him.

But back to Katz.

He's a billionaire who made his fortune through for-profit college loans.

I always assumed that Katz started CRTV simply because he was a staunch conservative Republican, and wanted to provide a place for censor-free conservative programming. I knew that it was also a business model, but I assumed it couldn't be very lucrative (compared to Katz's other businesses, and overall wealth), and like PokerGo, it seemed to be more of a labor of love.

Well, now I'm not so sure.

According to this salon.com article, Katz was a Democrat until 2009, and only switched parties when Obama's Affordable Care Act was also going to ban for-profit, non-bank college loans from the private sector. That basically killed Katz's college loan business, so he started funneling big money toward hard-right politicians who supported a full repeal of Obamacare -- simply to reverse that ban on private sector college loans.

However, I will say one thing in Katz's defense.

Regardless of the legal rulings from the arbitrator in the Steyn case, a sanity check of the situation would seem to indicate that CRTV's allegations against Steyn were probably mostly correct.

Let's look at this from a logical standpoint:

- Cary Katz personally recruited Steyn, and really liked him

- Steyn's show had only existed for one month, so the firing clearly wasn't about ratings or performance

- Several former staff members have criticized Steyn, his management style, and his behavior

- Steyn himself will not give any explanation for the firing (even from his own point of view), even though the court case is over. This is perhaps the biggest indictment of Steyn. If the firing was unjust and would make CRTV look bad, Steyn would be shouting it from the mountain tops. Instead, he is trumpeting his legal victory, yet still intentionally avoiding explaining what really led to the firing (even if it was CRTV's fault). For example, if the show was going great, but Cary Katz got to personally dislike him, I'm sure Steyn would have made that clear (at least in court). Instead, Steyn's claims (both legal and in his blog) are all legal breach-of-contract related, which doesn't seem to be the look of an unjustly fired man.


To me, it looks like Steyn was a good talk show host but a terrible executive producer, and probably a jerk to work with. So they likely tolerated this for about a month while trying to work with Steyn, then tired of him and let him go. I'm assuming CRTV's lawsuit against Steyn was a big "fuck you" to him (likely Katz's idea), because of the bitter circumstances of the situation.

That last part is where Katz erred. I think Steyn realized he fucked up and was probably willing to just walk away and let the whole thing go. But once he was sued for $10 million, he decided to fight back with a countersuit, and here we are.

So it looks like Katz is so pissed at Steyn that, rather than just let CRTV cough up the $4 million, he'd rather destroy the entire company.

What a mess.

[MumblesBadly]

“... (biased) DailyBeast ...”???? Really, Druff? And Steven Crowder isn’t biased??? Heck! Watch this and learn how he was exactly that, and in a despicable manner, regarding the HIV crisis, something you even discussed in a radio show episode, but were probably too lazy to fact-check Crowder’s lying biased ass!

[MrTickle]

“... (biased) DailyBeast ...”???? Really, Druff? And Steven Crowder isn’t biased??? Heck! Watch this and learn how he was exactly that, and in a despicable manner, regarding the HIV crisis, something you even discussed in a radio show episode, but were probably too lazy to fact-check Crowder’s lying biased ass!

Druff thinks unbiased means something that agrees with him

[ErickAA]

“... (biased) DailyBeast ...”???? Really, Druff? And Steven Crowder isn’t biased??? Heck! Watch this and learn how he was exactly that, and in a despicable manner, regarding the HIV crisis, something you even discussed in a radio show episode, but were probably too lazy to fact-check Crowder’s lying biased ass!

Ironically, if Crowder just told the truth with his statistics (he didn't) the premise of his argument would still be valid to an extent. The amount of money we have spent on HIV/AIDS is extremely high relevant to the amount of people HIV/AIDS actually affects, for good or bad.

[Dan Druff]

I never said Steven Crowder is unbiased.

I said that Daily Beast was biased in this situation because they were biased from a personal standpoint -- they were on CRTV's side, due to their relationship with various CRTV hosts/employees.

This Steyn vs. Katz situation was conservative vs. conservative, so this wasn't a political matter.

[MumblesBadly]

Would you point out in your OP where you mention these details?


But regarding the arbitrators decision: If it was like baseball arbitration of old, the judge has to choose one of the two sides and can’t “split the baby”. If so and Steyn’s argument was somewhat closer to a truth the judge could reasonably rationaize, he/she would have been compelled to side with Steyn. Any details that aspect of the arbitration process?

[Dan Druff]

For anyone who cares, I actually took the time to read the entire report/decision by the arbitrator. Actually was fairly interesting, and I learned some more.

First off, Steyn didn't win $4 million. A number of judgments were entered against CRTV, which added up to approximately $4 million.

These were:

1) $1.8 million + 9% interest (between February 2017 and whenever Steyn is paid) to Mark Steyn, for breach of contract. This was calculated because Steyn was to draw an $800k/year salary starting from July 1, 2016, and CRTV had no right to opt out of the contract until July 1, 2019. This meant they were on the hook for $2.4 million to Steyn, but $600k had already been paid to him, hence the $1.8 million figure.

2) Oak Hill Media, a third party company hired to help produce Steyn's show, was awarded $908,124 with that same 9% interest. This was a complicated calculation I won't bother getting into.

3) Attorney's fees of $1,012,729 were awarded to Steyn and Oak Hill for prevailing on this case. As usual, the lawyers got rich.

4) As a final kick in the ass to Katz, $76,575 was also awarded to Steyn to reimburse him for his share of what he paid the Arbitrator (lol).


Now... as far as what actually happened...

In short, it seems to me that both sides were at fault for the failure of the Mark Steyn show, but it seems that more of the fault was on CRTV's end.

Steyn was to be paid $800k/year to produce 200 daily shows per year of a minimum length of 48 minutes each (that's 4 shows per week, with two weeks of vacation). He was the one placed in charge of creating the content and overseeing its production.

However, CRTV was responsible for providing Steyn with an advanced, full functioning, TV-quality set, as well as furnishing him a production team.

The problem involved the studio itself, based in Burlington, Vermont. By all accounts, the studio was beautiful and state-of-the-art.

Unfortunately, it was riddled with horrible technical bugs/issues, and was also way behind schedule on construction and implementation of planned features.

Both sides agree that CRTV lavishly spent on the studio, which was built from the ground up. Steyn was given a virtually unlimited budget for this. However, construction of the studio was way behind schedule.

Furthermore, Steyn took an approved trip to Europe over the summer of 2016, and CRTV hired Steyn an underling to manage staffing for the show while he was gone. That underling, recommended by Steyn and wooed away from Fox Business by Katz himself, was completely incompetent, and failed in all ways. That even caused further delays.

In October 2016, Katz realized that the planned Steyn show -- meant to be the centerpiece of CRTV -- had fail written all over it. He wrote an e-mail to CRTV executives advising them to get Steven Crowder (whose show had not transitioned to CRTV yet) ready to take over as a quick replacement, if things went south with Steyn.

You need to speed up the development of this show we will need to get [Crowder] up and running fast if Steyn screws us. I hate to even write that, but we have to be prepared for a worst case scenario.

The incomplete Burlington studio ended up being the main reason for the demise of the Mark Steyn show.

On November 29, 2016, the studio apparently still didn't have its flooring and lighting completed.

While they started to use it in December, it was inadequate for the production of a highly complex show like Steyn's. The multiple cameras were not fully installed, the advanced editing suite was constantly crashing and basically unusable, and an 80-inch, high definition monitor behind Steyn -- meant to be a focal point of the show -- was both incomplete and buggy. The monitor was meant to connect remote guests to the show and display various graphics, but it was a failure in both ways. The internet uplink did not work, and the monitor had a "flicker" which seemingly couldn't be corrected (lol).

The above stuff was all technically CRTV's fault, as they bore responsibility for everything here.

However, as I alluded to in my original analysis, Steyn was also no picnic. Apparently he was a jerk to everyone, communicated poorly, pissed off most of his staff, and just sucked all around at managing. He also was falling behind in producing the 4-days-per-week content.

Despite all of this, Katz still had respect for Steyn, and wanted everything to work. For reasons unknown, he never spoke with Steyn directly about any of these problems listed above (both on Steyn's end and CRTV's end), and instead relied upon middlemen to do all the talking back and forth. This led to some of the confusion as to what Steyn and Katz believed Steyn's actual role was.

The show took place for a month or so, but it sucked, and it was not at all what was planned. This was mostly due to the limitations of the Burlington studio, but also somewhat due to Steyn not really being right for the position of executive producer.

They finally had to fire him and give up on the show.

It appears that, as I mentioned, Steyn was probably willing to just chalk the whole thing up to a failed venture, and probably would have just walked away after the firing, despite being contractually owed another $1.8 million.

However, for whatever reason, Katz took the entire thing personally, somehow cast all the blame in his mind upon Steyn, felt betrayed, and filed that $10 million suit.

Steyn prevailed because of the Burlington studio situation. The contract stated that Steyn would be on the hook for the 200 shows per year once the studio was fully functional. It was clear that the studio was never fully functional, or anywhere close, even if it was technically usable to produce a simple, lower quality version of the show.

Therefore, Steyn beat the lawsuit, and then was awarded the damages stated above.

A final note, regarding Steven Crowder. Reading the entire report from the arbitrator really shed some light upon Crowder's situation, which always perplexed me.

Prior to 2017, Crowder produced content about once per week from a cheap studio (I think in his home), and didn't seem to have much of a budget or staff. When people would ask him to produce a daily show, he would respond with the hashtag #NeverDaily and swore that would absolutely never occur.

Then, in late 2016, he abruptly announced he would indeed go daily, and was introducing a subscription model called "Mug Club". (Prior to this, he was strictly providing free content on YouTube, and nothing else.)

It turned out that he had joined the CRTV lineup, and a "Mug Club" subscription was actually a CRTV subscription.

From that point, the budget of the show amazingly increased. They quickly had a nice, new studio. They were producing daily content. They were able to travel around the country at will. They had a bigger staff.

In 2018, they moved studios again, occupying an entire house converted into a radio studio. Over a month of construction took place to do this, and Crowder revealed a large editing room filled with a number of computers and new employees working at them. He also revealed that both of his parents were working for him.

I always wondered how Crowder was suddenly able to transition from moderately popular YouTube content creator to a high-quality daily show with 20 employees.

Now it appears that he was wooed by someone at CRTV, likely given a generous salary and an even more generous budget, and even allowed to hire his own parents.

I don't blame Crowder for jumping at this, but boy is he going to be screwed if CRTV falls apart.

[Dan Druff]

BUMP

Late last year, Cary Katz washed his hands of CRTV by selling it to Glenn Beck's BlazeTV.

However, that didn't end the lawsuit involving Steyn. In fact, now there are all kinds of other lawsuits related to this matter, including a personal defamation case filed by Katz against Steyn.

Steyn attempts to describe everything here: https://www.steynonline.com/8714/kat...outnkeep-guide

This looks like it's not going to end for a long time.