Statement Regarding Phil Galfond » Bluefire Poker Announcements

In 2008 I was just like you.  Another guy playing poker for a living, looking up to guys who had been extremely successful in poker, such as Phil Galfond.

I had an idea for a new poker training site, one that I thought would change the quality of online poker training. That site is what you now know as BlueFirePoker. I had the expertise to execute the business aspects of the site, but I needed the highest level poker mind I could find. So I shot for the stars and went after a guy who was not only a great player, but a poker hero, Phil Galfond.

Initially, he was not all that interested. He had been approached many times before, but had never received an offer that made it worth it for him.  

I really wanted him to be involved in the site, so I focused on what would make it worth while, and we eventually found what it was: Attention. Yes money was important, but that wasn't the only important thing. If he was going to come on board, Phil wanted to be the face of the company. He was already an extremely big name in online poker, but being the lead pro and the face of what would become one of the major poker training sites would help him even more, and increase his value to a poker room, who he had yet to sign a deal with, opting instead to increase his value and wait in hopes of a much bigger payday.

We worked out a deal where Phil would be THE face of the company and receive all of the attention, and I'd stay in the background and run the site and do all the work that has to be done behind the scenes. This is why many people didn't know my name in association with BlueFire. That was the way Phil and I worked it out, and since I respected him and his game so much, I was willing to do that deal. He does videos, blog posts, forum engagement and interviews, I did everything else.

The financial aspect of the deal was very simple: Phil would receive a piece of the company and would make a certain number of videos/month, blog posts/month and spend a certain number of hours in the forums each month promoting, as well as promoting off site.

Shortly before the site was finally going to launch after a long development period, Phil said he wanted an additional equity to be able to recruit additional pros.  So right after I thought we had struck a deal, he wanted more money and he waited until the last minute, until I was in the worst position to ask for it? It was a tough spot--if I said "no", I risked Phil leaving right before the launch of the site. 

The site finally launched, and initially, things went well working with Phil. As you know, Phil is a brilliant poker mind, he did great videos, people loved his work, and he was easy to work with. He did interviews, helped promote the site, and did a great job. I was happy with him, and as far I knew, he was happy with me.

As the years went on, he slowly got less and less interested in the site and the company.  I guess the money wasn't all that motivating for him. It appears he was making 7 figures/yr at poker, and though BlueFire was paying him well by my standards, it wasn't in that league.  It became tougher and tougher to get videos, blog posts, interviews and any participation in the forum.  As the face of the company, this wasn't good. When I brought it up, he always promised he'd "catch up" on stuff, but never did.

Part of the problem I think, was that Phil and I had discussed building several other companies off of Blue Fire. But as you all know, the poker economy has been very difficult for the last few years. I think it was frustrating for both of us that BlueFirePoker launched at this time.  It seemed like every year another negative thing would happen in the poker world, and it forced us to hold off on new projects.  Doing larger projects that would have brought in additional money would have created more incentive for Phil to remain motivated about BlueFirePoker, but the financial realities of the poker world prevented this.

Towards the end of Phil's time with BlueFire, it was a hassle to get him to turn in content.  Constant reminders and questions as to when he'd have things done were required, and regardless he blew off his obligations. People wanted more participation from him, but he wouldn't do it. He would reject requests to do simple interviews that would help the business around promotions we wanted to run.  He didn't participate in the forums, or help promote the site through his blog. It was like pulling teeth.  Sometimes he would turn in videos, sometimes not.  I was trying to be as understanding of him as I could, but he was refusing to do his obligations. It was frustrating, especially because I like Phil so much as a person.  People wanted to read his blog posts, chat with him in the forums and watch his videos each Friday, but he wasn't motivated to do them.

I requested to meet with him in person several times to try and figure out why he wasn't doing his work, or what was going on.  I wanted to figure out his side of the story, to understand what was really bothering him and see if maybe we could address it. I've always thought there is a solution to every problem, and if you can just find the problem, you can solve it.

But Phil wouldn't even meet with me. He would talk to me over IM sometimes, but he'd never get into why he wouldn't do the work he was supposed to do or what I could do to help him. I had tried earlier in the year to meet in NYC when I was on the east coast, and no luck. I even made a trip to Vegas and extended my trip to try and meet him during a time I knew he was there during the WSOP in the summer of 2011, and kept getting responses that he was "too busy", at a time when I knew he had free days from tournaments.  For the guy who was supposed to be the face of the business not to meet with you for a few minutes when you're in the same city, when you haven't seen each other in a year, especially when you're having problems over him not doing his work?  That's not a good sign.

Shortly after he stopped talking to me in person, Phil mentioned that he had been proposed an opportunity and he "didn't know what was going to happen" in regards to his involvement in BlueFire if it went forward.  It was somehow involving FTP, but I don't know much more about it (FTP was later shut down so nothing happened there). Later in 2011 Phil wrote me an email out of the blue, saying he thought BFP was a bad decision for him, because his game was on display for everyone (meaning his opponents could see how he played), and that if he left he thought BFP would lose more of it's customer base than he was getting paid.  Since we hadn't branched into other businesses as we'd planned to, it wasn't making financial sense for him. He said he was sorry to drop a bomb on me out of no where, but that he wanted to talk. He didn't come out and say he wasn't going to do BFP anymore, but kinda left it there.

Eventually he proposed a deal that would have him cutting his number of videos in half, but pay him an amount that would be 2-3 times as much money.  So he wanted to make more than double the money for less than half the work- much of which he wasn't even doing. The financials of this made no sense. If I took his deal, I'd be working basically for free--almost all of the income from the business would go to Phil.  As great as Phil is, myself and others do a ton of work/help make BlueFirePoker very successful, and have to be paid something for it, just like Phil.

I requested an in person meeting to chat about it, but he refused to actually sit down with me.

I didn't know if he had another deal going on that he thought he could make more on, and that's why he was making unreasonable requests.  I had no idea.  I explained to him how unreasonable this was, but he didn't care. 

Everything about this felt weird to me. We had issues. I thought they were solvable if we just talked. Maybe they weren't, OK, but Phil refused to sit down and chat about it.

I still feel like maybe we could have worked this out. I've always had the utmost respect for Phil, but it seems like at this point, everything kinda broke down, and then everything hit the fan.

From here on out, the business details get very intricate (and maybe boring), so I'm going to try to summarize them as quickly and accurately as possible:

1.When it was clear I couldn't accept his proposal to pay him what he requested, he asked if I'd buy him out.  I told him I didn't have an interest in that.

2.He also requested that I waive the non-compete.  I said no because that would really hurt BFP--of course--he didn't like that.

3.We eventually worked out a tentative deal where he'd make X amount more videos for BFP and we'd release a joint statement together about his departure.  This seemed like a good compromise--the community would get more content and he could go on his way. But I wouldn't waive his non-compete, so he didn't follow through.

4.Phil and his lawyer said they'd fight the non-compete and they wanted to use the videos Phil made for BlueFirePoker on other sites.  BFP had already paid Phil over $400,000 for these videos, so of course I said no.

5. Phil and his lawyer were also saying that despite not completing most of the requirements  (videos, blogs, etc.) of his deal for 2011, Phil still wanted to be paid in full. That obviously didn't make any sense.

Most of this conflict was just legal threats from Phil.  Phil's one of the smartest guys I've ever met in my life, and he knows that going back and forth with lawyers is costing us both a bunch of money, and the fact is, he has way more money than I do. I think he's hoping that I just fold up and give up, so I can avoid paying a bunch of money to a lawyer. But that's not fair, and I don't want to give up something that I think is right just because I'm being legally bullied, even if it is by a guy I respect.

As all of this expensive legal negotiation was going on, in December 2011, out of nowhere Phil makes an announcement on BlueFirePoker that he was stepping down.

He didn't tell ANYONE about this beforehand.  We obviously knew he was going to step down, but with the lawyers from both sides working to get a deal done, no one expected that.  Not even his own lawyer.  We were blindsided.  It was one of the most unprofessional things I've ever seen.  I got a text from someone else alerting me of the announcement.  Unbelievable.  After several years, of working together, he completely threw me and the company under the bus. I almost didn't believe that it happened.

But it got even worse than that. We decided it was best to move the blog post to the forums, so we could respond/chat with customers so that any responses were in the same place, and not buried in the comments section.

Then, it really hit the fan.  Phil deleted his post, and said that we had moved it and he was trying to get it back to his blog section. Because he had deleted it, people assumed BlueFirePoker had deleted it.  No one from BlueFirePoker deleted it.  A member of BlueFirePoker's staff even sent out a tweet from the company twitter account, letting people know Phil was stepping down from BlueFirePoker with a link to the forum thread, with Phil's message.

It was clear Phil was pissed and did not care about hurting BlueFirePoker at this point, so we made the decision to lock his account. We did this so that we could put his message back up, since by deleting it, he was making it look like we were deleting it and making us look bad.

Phil then publicly posted on twitter, and then poker forums, saying he was locked out of his BlueFirePoker account now, and said that any posts from that account from then on weren't from him, insinuating that we were going to pretend to be him or something.  He was locked out because his actions were making it look like we were deleting his content but it was actually Phil who was deleting it.

In his post saying he was leaving BlueFire, he said he was going to make 4 more videos and then leave. Then, after the debacle he created with the deleted post, he claimed that now he was going to have to post his 4 videos elsewhere.  Well, he claimed unless we agreed to his terms he wasn't going to make them anyways, so he was just floating that out there knowing that either:

a. we accept his ludicrous proposals that would not make any business sense ever, or

b. he makes it look like we were causing a situation for our members not to see 4 more videos from Phil.

In a way, as underhanded as this was, it almost made me respect Phil more, at least in a strategy sense. He is a very smart person.  He manipulated us into a really bad spot and made us look like we were screwing him and our customers out of videos, when in fact the whole time we were trying to do the right thing.

He continued posting on twitter, thanking people for the support and playing the victim role and painting the picture as if we had thrown him out of BlueFire or something, saying he was 'embarrassed' and things along those lines. It was very well played from his end, I have to say, even if I was aghast at how untrue so much of it appeared from my end.

I will admit to a mistake I made here: After all the drama surrounding the announcement, it took several days for me to respond, and when I did respond in the forums, it was basically just legalese. This was because I was advised not to talk openly about it. I listened to that advice because I've never been in a situation like this before, but I think now I made a mistake.

By not talking about my side, people only saw the other side and they assumed I had something to hide. I don't, I believe that I am in the right here and that's why I wrote this post. I learned that if you don't talk about it, it looks like you're in the wrong, because only Phil is saying something, and even if he's wrong, my silence makes his words seem right.

I'm not trying to get in a PR battle with Phil.  That's a losing situation- to go up against guy who's done a better job than anyone maintaining a pristine image in the poker world.  He's extremely well spoken and just generally a nice guy.  It's hard not to like him; even now, I still like certain parts of him.

That brings us up to yesterday. It was put out in the poker news that Phil is taking me to court with a claim that I'm withholding funds. Well, that's an interesting spin on it.   Instead of saying, "I tried to bully BlueFire into taking a deal that no one would take, and they called my bluff so I'm going to take him to court since I won't make a reasonable agreement." Again, I found out through text (not from Phil) about the announcement.  We still have not have received a lawsuit from Phil or his lawyer.  Again, it went through the media, with a one-sided characterization of the events.

Just to be clear, and so you know: I have paid or have offered to pay Phil every single dime that we believe he is owed.  His spin that we're trying to not pay him at all is inaccurate. 

I decided the story should be told this time, rather than keeping quiet and allowing him to cause damage to BlueFirePoker which seems to be his intention. I'm not trying to say I'm perfect or that I'm right about everything. I do believe that I've tried to do the right thing as much possible and to make a deal that works for both of us.  Phil--I'm not so sure of. I can't understand why he's dealt with this the way he has. I've tried to be reasonable, and it hasn't worked to this point.