Snopes seeks crowdfunding in ownership battle

Tech Crunch – by Devin Coldewey

How many times have you heard some urban legend, chain letter or misleading bit of news repeated and immediately found a thorough, fact-based debunking on Snopes? Like every damn day for the last 20 years or so, right? Snopes was there for you when you were looking up fake news and cryptids — but it’s in trouble, and asking you to return the favor.

The venerable fact-checking site is in the middle of an ownership dispute, and it’s looking for donations to keep the lights on in the meantime. The site’s blog describes the situation thus:  

We had previously contracted with an outside vendor to provide certain services for Snopes.com. That contractual relationship ended earlier this year, but the vendor will not acknowledge the change in contractual status and continues to essentially hold the Snopes.com web site hostage. Although we maintain editorial control (for now), the vendor will not relinquish the site’s hosting to our control, so we cannot modify the site, develop it, or — most crucially — place advertising on it. The vendor continues to insert their own ads and has been withholding the advertising revenue from us.

But wading into the lawsuit and counter-lawsuit filed earlier this year, it’s clear things are far from straightforward, even if Snopes appears (warning: I am not a lawyer) to be… well, if not in the right, then perhaps less in the wrong. Here’s the story, as far as I can tell.

Snopes was founded in 1995 by David Mikkelson and Barbara Mikkelson, and ownership formalized in 2003 in Bardav Inc (Get it? Barbara + David = Bardav). Each had one share of the company. But in 2014 the two began divorce proceedings, which would of course necessitate negotiating ownership of their company and Snopes.

In August of 2015, Snopes entered a revenue-share/content and ad management agreement with a company called Proper Media, formed earlier that very year. In early 2016, Proper arranged to buy Barbara’s share of Bardav, replacing her as co-owner of the company. David Mikkelson attempted to kill the contract in spring of 2017 (wouldn’t you?), but Proper resisted, saying the terms of said contract were not fulfilled. In the meantime, it is apparently holding onto the site’s revenue and parts of its infrastructure.

To me this sounds like an opportunistic takeover, but in addition to not being a lawyer, I also am not a businessman, so possibly I’m just naive. At the same time, Proper alleges that Mikkelson misused company funds and inappropriately managed Bardav otherwise. In a statement issued after the publication of this article, Proper wrote:

“Today’s post only confirms Proper Media’s allegations that Mr. Mikkelson has drained the company’s bank accounts and is unable to operate Snopes profitably without Proper Media’s expertise and management.”

The details are being cherry-picked by both parties, as generally happens in dueling lawsuits (not to mention when a divorce is mixed in), so I don’t want to give too much credit to either side here.

But the bigger picture to me is this: Snopes itself is valuable enough (in terms of utility, not cash value), and Mikkelson’s leadership has been sound enough for years, that it seems worth giving him benefit of the doubt for now. To me the important thing is that Snopes continue its work, as it has done for decades, and it’s unlikely things would remain the same if it’s put under the control of some shady “content” company.

The Snopes crowdfunding effort has already netted 100 grand and counting, half of which was raised while I wrote this article, so clearly others feel the same way, even if it’s not quite the “ransom” situation described. We need websites like Snopes, now more than ever. No one said it would be simple.

Update: I spoke with Snopes’s David Mikkelson about the situation. He contests just about everything alleged by Proper, including the idea that it owns half of Bardav and Snopes.

“The position we were in was, we had this popular website but outdated architecture,” which he hired Proper to help modernize. “It’s not like we were having financial problems, but as long as I was basically running the entire operation there was no way we were going to grow.” Mid-contract, Proper made an aggressive bid for control, paying what Mikkelson said was an “exorbitant” price for the other half of the company.

The contract with Proper was one that could be canceled at any time by either party, and that’s what Mikkelson says he did, as part of his everyday job as President of the company. Even if Proper’s owners were on the Bardav board (they aren’t, he noted), their permission wouldn’t be necessary because it’s not a board-level decision, and anyway they would have to recuse themselves for conflict of interest.

As for the donations, Mikkelson was less detailed in his explanations, but it seems unlikely that (as some worry) it will be used for some dark purpose.

“We’re hoping [the $500K goal] can get us by until the end of the year,” he said, cautioning that specific dates or numbers hadn’t been thought out. “We’re just trying to cover operating expenses, it’s all very standard: salaries, we have 16 staff that work at Snopes, various kinds of overhead, travel, that kind of thing. There’s no telling how much we’re going to have to end up frittering away on legal fees.”

I’ve asked Proper for clarification regarding a few of the claims made in its statement, in lieu of simply repeating them here. I’m also looking up some legal documents to verify some of what both parties are claiming.

https://techcrunch.com/2017/07/24/snopes-seeks-crowdfunding-in-ownership-battle/