Arianna Huffington certainly has her share of critics on the Right after six years of running The Huffington Post, a website focusing on progressive politics and pop culture. Today, though, her biggest fight may be coming from the Left. Six years after the launch of the site, well-known progressive activists Peter Daou and James Boyce have filed suit against Huffington and her business partner Ken Lerer, claiming that they created the concept for HuffPo and that a handshake deal has been abrogated:
Two Democratic consultants are accusing Arianna Huffington and her business partner of stealing their idea for the powerhouse liberal website Huffington Post.
Peter Daou and James Boyce charge that Huffington and partner Ken Lerer designed the website from a plan they had presented them, and in doing so, violated a handshake agreement to work together, according to a lawsuit to be filed in New York State Supreme Court in Manhattan.
The complaint is a direct challenge to the left’s most important media property from two stalwarts of the progressive movement. And it challenges Huffington’s own oft-told story of coming up with the idea in conversation with Lerer and other friends.
Normally, it pays to be skeptical about such claims. Big successes in any field usually generate plenty of claims of ownership, and the six-year wait for action seems rather strange as well. HuffPo was a commercial success almost immediately [see update below]; why wait six years to make a case for a partnership share?
On the other hand, Daou and Boyce aren’t nobodies, either. I know both of them a little, mainly from my days at BlogTalkRadio. They are long-time progressive activists, and Politico’s description of them as “stalwarts” of their movement seems apt. Daou has written for a number of publications. He also worked in a fairly high-profile position for Hillary Clinton’s presidential campaign — which may explain the delay in taking legal action, too.
Huffington’s response to the lawsuit indicates that this isn’t just a tale out of whole cloth, either:
The real birth of Huffington Post, they allege, was the next day, December 4. That morning, Daou, Boyce, Huffington, and Lerer met again at Huffington’s house and discussed the plan in more detail, according to the complaint. Daou and Boyce allege that the framework for the site had been described in a memorandum Boyce had given Huffington the previous month, which outlined a political website on which “political luminaries and public figures should be invited to blog.”
“At the conclusion of the December 4 meeting, Peter, James, Huffington, and Lerer all shook hands and Huffington stated, ‘It will be great to work together,’” the complaint says.
The plaintiffs have no written contract, and no evidence that Huffington and Lerer considered them formal partners, though they did produce an email in which they appear to describe Huffington and Lerer as their partners. …
Huffington and Lerer contend in response that Daou’s and Boyce’s proposal was for an entirely different “political messaging company” and that the two were just among “a number of people” with whom she and Lerer spoke after the Brentwood gathering.
Huffington and Lerer also refer to a December 7 email from Boyce that refers to Huffington and Lerer as “the two senior partners” in the venture and doesn’t present Boyce and Daou as “partners or co-owners.”
“They are plainly presenting themselves as employees,” and not partners in a “handshake deal,” Huffington and Lerer write.
Well, we can say that the idea doesn’t appear to have spontaneously erupted in conversation between Huffington and Lerer, but Huffington’s story could also be valid. The idea of political luminaries blogging on a site wasn’t exactly a new concept; Markos Moulitsas had politicians blogging at his site during the 2004 election cycle. Huffington Post added the celebrity element and more professional polish to the presentation, which speaks to design and talent recruitment rather than concept.
In the end, this dispute teaches one lesson: handshake contracts are worth the paper on which they’re not printed. If you want to enter into a business partnership, get a contract. Those who create proposals for new business ventures should put those in writing, date them, and perhaps even notarize them as well. Unless Daou and Boyce have solid witnesses to these transactions, a court will probably consider the time lost and give this claim a highly skeptical review, regardless of whether Daou and Boyce are telling the truth.
Update: Actually, while HuffPo was a traffic success from the beginning, it only recently began operating profitably:
Web traffic for The Huffington Post, which turned five on Sunday, is massive—in February, it rocketed past 40 million unique monthly viewers, according to one metric. (Nielsen put it at 13 million uniques in March.)
But the site has yet to turn a profit.
That’s about to change, according to CEO Eric Hippeau, who tells MediaWeek that HuffPo will become profitable in 2010 for the first time since it launched on May 9, 2005.
The line from Hippeau is that until recently, HuffPo has been in “investment mode.”
That could have something to do with the timing of the lawsuit, too. (h/t Mike H)