Hi Everyone:
As a long time publisher in the poker/gambling field, I think I can use the "Cliff Notes" post by Dbk_killer to add a lot of worthwhile information to this thread. But first, a few disclosures:
1. Two Plus Two is also an Upswing affiliate and we get the exact same amount, 25 percent, that Joey Ingram gets.
2. I know both Doug Polk and Joey Ingram well and consider both of them to be good friends. I also know both Matt Colletta and Ryan Fees of Upswing Poker and have positive opinions of both of them.
3. A couple of years back, at The Upswing Poker Party that was held at The Wynn, I was quickly introduced to Fernando. But other than that I don't know him at all.
So here goes:
Quote:
Originally Posted by Dbk_killer
Cliffs:
- Doug reached out to his fanboy Fernando offering to make the PLO University and Fernando agrees to 25% cut even though he feels it's way too small (business fish)
In our business, a 25 percent royalty rate is actually quite generous, especially for a first time author. To support this, over the years, our main competition was Cardoza Publishing who paid a standard royalty rate of 6 percent of the retail price to its authors, and since most books are sold at wholesale which is usually 50 or 55 percent off, this 6 percent is roughly equivalent to 12 percent on the Upswing Poker scale. Today, our main competition seems to be a relatively new company out of England, D&B Poker, and I've been told that they pay a royalty rate of 15 percent of the total revenue which again compares to the 25 percent that Fernando received. In the year 2000, when Two Plus Two first took on other authors (besides David Sklansky, Ray Zee, and myself) our initial royalty rate was just 20 percent of the total revenue that we received. And finally, when the Poker Boom began in 2003, I received a call from Prentice/Hall, who is a big national publisher, offering a 15 percent of total revenue to take over some of our books (which we immediately turned down) and Prentice/Hall were the ones who published Phil Hellmuth's initial book
Play Poker Like the Pros. So it should be clear that Fernando got a good deal even if he doesn't understand that.
Quote:
-Fern lets them know that he feels 25% is too little but he accepts with the gentlemen's agreement that Fern later does more stuff for upswing and gets a cut of 50%-75%
The 50 to 75 percent from my perspective seems crazy. In fact, at 75 percent, it's my opinion that Upswing would lose money, and at 50 percent, I question whether Upswing would make enough money to even make the project worth doing. Everyone needs to realize that companies like Upswing (and Two Plus Two) have a lot of hidden expenses. This can include office space, accounting fees, attorney fees (and attorneys can be very expensive), equipment for video production, editing fees, and probably a lot more.
Quote:
- When course is done Fern learns that Joey has been hired as an affiliate, which is supposedly really weird to do in the first big week of sales (would expect to save affiliates to bump up the sales later when things cool down instead)
This shows that Fernando has no knowledge of how the affiliate market works. Affiliates are entitled to sell a product immediately. Also, in the case of Two Plus Two, before we ever knew that Upswing had a PLO course coming, we were already an Upswing affiliate, and part of our agreement with Upswing was to have the right to immediately sell any new product that they came out with, and to ensure maximum sales, this is the way Upswing wants to do it. Also, for another example, Amazon.com has lots of affiliates, and they don't tell these entities when a new top selling books comes along that they can't sell it immediately.
Quote:
- Joey gets 25% ($250) from every purchase made through affiliate link and then Fern gets 25% of the $750 left over
That's the way this business works. The affiliate takes their share first, and then Fernando gets 25 percent of the money that Upswing receives. As an example, many of our books have a $30 retail price, and when you go into a store like Barnes & Noble you'll pay $30 for the book. But we (Two Plus Two) only receives $15, and that's the amount the author's royalty is based on, and this is clearly explained in our contract. Now, I'm not privy to what the Upswing contract says, but I assume they have highly competent attorneys who have written this stuff clearly.
Quote:
- Fern pitches PLO Lab to stay up to date with solvers. Upswing agrees offering 30% cut and Fern is shocked because he thought they had the gentlemen's agreement that he gets more . Upswing insists he IS getting paid more than 25%.
And Upswing is clearly correct. Again, they would be crazy to pay the percentage that Fernando talks about. Furthermore, his initial 25 percent is already very generous. Now, publishers, like Upswing Poker will sometimes pay an author who has a successful product a higher royalty rate than they got on their first product, But given that Fernando is already getting a generous 25 percent, how much more should he get, and in my opinion 30 percent is fair.
Quote:
- Once again Joey is made affiliate in his favour over Fern and makes more money than Fern from affiliate sales.
Joey may make more on any specific sale he makes, but Fernando is going to make a whole lot more than Joey since Joey is only one of many sellers. In addition, why is Joey a good affiliate? That answer is easy, over time, and through a lot of hard work, he has built up a good reputation and a large following, and that's the type of affiliate a company like Upswing should want. And that's why Joey (and Two Plus Two) can get 25 percent per sale.
Quote:
The fact that only 5/140 affiliate signups were new (without having bought PLO University) makes it worse as Joey is basically getting paid twice for bringing in the same people.
As a former professional statistician, I cringe at this sort of argument. The problem with it is that Fernando is assuming that anyone who bought the original package would automatically sign up for the new package. I strongly doubt that this is the case. However, if Joey talks positively about the new product on some of his podcasts, and also brings Fernando on his show several times to talk about the new product, then you would expect the percentage of people who bought the first product to now also buy the second product to go up. So there is no way in my mind that Joey is getting paid twice in the sense that Fernando claims he is.
Quote:
- Fern tries to reason with upswing communicating his unhappiness and tries to negotiate now but they sternly shut down any discussion as the contract is signed
Well, I don't know anything this, but generally, once a contract is signed, it's final. Also, what if the product had done poorly and Upswing wanted to reduce the royalty rate they paid Fernando, do you think he would agree to this? I highly doubt it.
Quote:
- Also talked to Joey who he considered a friend but Joey also wasn't having any of it as Joey was making a ton of money (again "contract is signed").
I think it's clear that while Joey made a nice amount of money from the affiliate deal, Fernando made much more from the product in total than Joey. And yes, once an agreement is made and signed, that's the agreement. Perhaps Upswing might conclude that they gave Joey too large a cut. If that's the case, I suspect that when they make future affiliate agreements with other entities, they'll try to pay a lessor percentage.
Quote:
- Joey also pushed for a 3h podcast with Fern where he aggressively pushed PLO University for a quick money grab, promising he'd make additional videos which were never created
The three hour podcast with Fernando, for some of the reasons given above, has to be something that Fernando would want. Also, as Joey has posted elsewhere in this thread, he did make videos but has a few more to still do.
Quote:
- Later increasingly miserable Fern goes through the contract, finds the loophole and says he's leaving.
Unhappy authors are known to do this sort of thing. For some of you who may remember, Two Plus Two has a book called
Professional No-Limit Hold 'em: Volume I. But something similar happened to us and
Volume II was never produced. My comment is that just because an author is able to find a loophole, assuming one really exists, I can't help but wonder if the author is living up to the spirit of the agreement even if he happens to be legally right.
Quote:
- Upswing reacts very aggressively, threatening to sue and promising if Fern does this that they'll make sure he'll forever be hated and never work with anyone in poker ever again (Coletta allegedly said this IIRC)
I know nothing about this so can't comment directly here. But I do know that Upswing had to refund a bunch of money to those customers who asked for a refund, and for those interested, our affiliate money was also reduced by the appropriate amount to reflect the refunds.
Quote:
- Finally upswing realises they can't do anything legally as long as fern gives 3 months notice, which he did
Another thing I know nothing about so can't comment on.
Quote:
- Meanwhile fern is not getting paid for first of the 3 months. Talks to upswing, they say he'll get paid in total after the 3 months, he says ok.
Another thing I know nothing about so can't comment on.
Quote:
- Does not get paid (owed ~90k). Upswing pretty much plays dumb and later somehow offers only $1.2k for the total of 3 month's work. Fern feels bullied and pressured and doesn't want to go to court with a big American company so he just agrees and wants to be done with it.
Another thing I know nothing about so can't comment on.
Quote:
- He hasn't even been paid the $1.2k. Fine, he just wants to be done with it.
Another thing I know nothing about so can't comment on.
Quote:
- Fern wanted to find a way to, together with upswing, communicate the reasons he's leaving diplomatically to the customers well in advance before he leaves. Upswing first refused and wanted to leave it until late, but later seemingly accepted.
Another thing I know nothing about so can't comment on.
Quote:
- So Fern goes to bed under the impression that they'll all together communicate the news as easily as possible to the customers
Another thing I know nothing about so can't comment on.
Quote:
- However Doug goes back on his word and launches the big smearing attack on Fern, shutting him out of the fb group, when he knows fern is asleep and won't be able to respond in a few hours.
Again, I don't know much about this. But shutting Fernando out of the Facebook Group makes sense to me. He's not an Upswing author/instructor anymore, so why would they want him in their Facebook Group?
Quote:
Other random:
- When Fern first went to meet Doug in person in his house in Las Vegas he went with fees and another friend. Doug just talked to fees for 15min completely blanking Fern and not even looking at him while Fern was standing awkwadly with a bottle of whisky he brought as a gift, waiting to be acknowldeged. (they'd talked on skype obv prior to this)
This doesn't sound like the Doug Polk I know. But even if it did happen exactly as Fernando says, what difference does it make? It has nothing to do with the signed contract, and has nothing to do with how Upswing conducts their public business?
Quote:
- Fern at some point talked to an unnamed upswing member over skyped who in a manic state said (something like, not verbatim) "HAVE YOU MADE MORE VIDEOS? I HAVE SO MUCH MONEY BUT I NEED MORE."
I have no doubt something like this happened. The consensus is that the PLO product was a good product, and I would expect that the author/instructor would get compliments.
Quote:
- Fern was again increasingly uncomfortable with working in such an environment.
- Every time Fern tried to reason with Doug over skype he'd feel beaten since Doug is much more articulate in English and would never feel his concerns were properly acknowledged.
-Finally with the loophole thing Fern felt like he had the upper hand and it's at this point Doug really realised he's beaten and started ramping up the threats.
Another group of things I know nothing about so can't comment on.
Quote:
- Unnamed upswing member bought rio domain. I thought this was jmo so don't really get it, but I guess Doug, fees, or coletta bought it and had no-f***ks-given jmo to play like he did so upswing could save face (and avoid lawsuit??). Fern was very uncomfortable with this and let Galfond know
Again I know nothing about any of this except that Upswing and Run It Once are competitors and friction does sometimes develop between competitors. However, I also question what this has to do with the PLO course and the issues that Fernando raised
Quote:
Cliffs obviously subject to me misunderstanding or misremembering or missing important info, so probably still watch the video at 1.5x speed or something.
Also for those of you who want to see another perspective on some of this same material, I would recommend to read Post #95 by Joey Ingram. If you want to link directly to it just click below:
https://forumserver.twoplustwo.com/s...7&postcount=95
Best wishes,
Mason
