The Lederer Files Part One: A Summary
Howard Lederer has given his first warts-and-all interview to website PokerNews and they plan to release it in a number of different parts – a bit like The Godfather Trilogy, only shorter and not quite as epic. Instead of writing a full long-winded feature (which will probably come once everything’s out in the open) we thought it better just to update you on the main facts to come from the first instalment of The Lederer Files.
✖ Lederer stated Ray Bitar’s naivety when it came to business matters by admitting that Bitar wasn’t qualified in a “traditional sense”. Lederer admitted he had neither the “education” or “experience” whilst at the same time was “an owner and very invested in the company”.
✖ “Members didn’t always get along” according to Lederer but there was never a “serious attempt” to get Bitar out.
✖ There were many opponents, within the company, to Bitar’s leadership and chief among these was Perry Friedman. Lederer admitted it was “accurate” Perry was opposed to Bitar’s leadership “more than any other board member” and he “didn’t get along with Ray”. This was given as the reason Friedman first left his position as programmer and later as a board member.
✖ John Juanda was another staunch opponent and was “vocal in the anti-Bitar camp”.
✖ When the company was in its infancy (September 4 2001) and Lederer, Ivey and the others had invested their pennies there was around $700,000 in the company. Lederer commented that this was used to move the development process “as far along as possible”.
✖ Before this, only money from Ray Bitar’s Strategic Investors was allowed to be invested.
✖ For his first two years in charge at Tiltware, Lederer didn’t receive a salary and was compensated instead with extra equity if the company did well.
✖ When the site launched in July 2004 they had between $2m and $2.5m as a result of other investors joining the site. It was used predominantly for marketing and development
✖ Of he and his fellow board members, Lederer said:
…“we saw our role in the company as a sort of advisory board”…“We’re not professional board members.”
…“we’re not former CEOs, lawyers, and accountants like would see on the board of Apple.”
…“thought our job was to occasionally get on the phone with management and see how things were going and discuss direction of the company”
…“there was never an expectation that the board would be working day to day”
✖ Chris Ferguson came out of the shit smelling like roses as Lederer admitted he was against shareholder distributions from the start as he “argued that every single distribution that the company made would weaken the company”. Lederer added that Ferguson “thought distributions were a really bad idea and obviously in hindsight he was right”.
✖ On the subject of shareholder distributions, Lederer admitted that it wasn’t “one particular person’s idea” to start them and it sounded like it happened due to the $20-30million in excess cash the company had at the time. He added they “didn’t think it needed the money” at the time so it was distributed.
✖ It’s true that owners were pushing for distribution of money but “no owners would have wanted it” of there wasn’t enough to cover player balances.
✖ Lederer touched upon the move to Dublin at the back end of the interview and explained that while he had a “good handle” on 100 or so employees when in Los Angeles, that control went when the firm moved to Dublin. Lederer stated that he “wasn’t happy about it”.
✖ It was now that he “lost total sense of the whole thing as it was getting so big” but “on the other hand I felt like Ray had a good handle on it”.