Tinder made a lot of people rich. Co-founder Sean Rad didn’t feel rich enough. _jessebarron reports
Photo-Illustration: Intelligencer; Photos: Getty Images For three weeks in November, I became addicted to the livestream video from a commercial courtroom in lower Manhattan, waking at 5:30 a.m. in my apartment in Los Angeles so I could be stationed at my laptop by 9 a.m. ET. My addiction wasn’t easily explained, because the dispute in this trial seemed extremely boring.
By the time pretrial got going in October, both sides had availed themselves of experienced PR agents. Diller’s company chose Justine Sacco, famous for being the first person to be globally canceled: In 2013, she had tweeted before departing on a flight for South Africa, “Hope I don’t get AIDS. Just kidding. I’m white!” Rad’s side was using a boutique firm run by a young woman named Ashley Rust, whose website advertises assistance with “a broad spectrum of online issues and challenges.
According to Rad’s agreement with the incubator, called Hatch Labs, any ideas he conceived as an employee became “the exclusive property” of Hatch. Rad was Tinder’s CEO but not its legal owner. The Tinder name, double opt-in, the brand — none of it belonged to him. Hatch Labs, for its part, was partly owned by the Match Group — the dating-site roll-up that included Match.com, OKCupid, and Plenty of Fish. And Match was owned by IAC, meaning Barry Diller.
That summer, IAC agreed to give Rad and the Tinder co-founders a new compensation agreement. Beginning in May 2017, Rad would receive a package of stock options worth 12 percent of the value of Tinder. Plain and simple on one level, the deal actually contained a land mine. The land mine was, how do you determine the value of Tinder?
According to Wolfe, when she raised Mateen’s behavior with Rad, he’d declined to discipline Mateen. Instead, he’d pressured Wolfe into resigning; if she didn’t, according to Wolfe, Rad threatened that “things were going to get ugly.” When the complaint went public, along with screenshots of the relevant texts, it stained Tinder’s reputation. The Daily News headline was “Female Tinder Co-founder Was Pushed Out, Called ‘Slut,’ ‘Whore’ in Front of CEO.
From his offices at IAC, Diller followed the unwelcome twists at one of his fastest-growing subsidiaries. Rad seemed like a jockey who was riding a prize horse all wrong: Tinder revenue was growing at triple-digit percentages every year, yet every day seemed to bring a fresh stumble. Diller decided that Rad would need to be replaced.
As CEO of Tinder, Blatt would be in charge of the valuation that was mandated by the 2014 contracts — the process that would determine how much Sean Rad’s options would be worth. But Blatt had another role, too: He remained the CEO of the Match Group, Tinder’s parent. Rad believed that this constituted a conflict of interest: Because Match was the counterparty to Rad’s stock options, the more that Tinder was worth, the more Match would have to pay.
Rad believed that Tinder was comparable to an early-stage Uber or Facebook and thought the valuation should come in around $12 billion. If they landed anywhere close to that number, he became a billionaire almost overnight. But the Match board believed that a fair valuation would be much lower. “If Sean pushes for more without any basis, we will go fully nuclear in response,” Blatt wrote to a colleague.
Shortly after the banks’ report was finished, Blatt announced his resignation. In a draft of a resignation letter, which he never sent, he said the Christmas party was unrelated to his departure, and explained the incident as a “stupid thing” he’d done after having “a few too many drinks.” From left, Sean Rad, Greg Blatt, and Sam Yagan at the NASDAQ stock exchange in November 2015. Photo: Andrew Burton/Getty Images Everyone knew that Rad would try to take the Match Group to court. As early as May 2017, James Kim, Tinder’s vice-president of finance, emailed Blatt to warn that “if it’s a number he’s not satisfied with, he’ll basically try to sue.
But the defense had an alternate story for each of the key exhibits. The email about “too much revenue” referred, they claimed, to Blatt’s concern — as the CEO of a public company — that he not overstate projections to Wall Street. “This was unacceptable” expressed his view that Tinder’s rate of growth was slowing even as revenue continued to rise. The delay in “Likes You” was the App Store’s fault.
In another long detour, Rad’s lawyers accused Greg Blatt of having “forcibly grabbed” Rad’s arm in the hallway during a break, then “approached two women on our team, and acted so inappropriately and shockingly in a way to intimidate … we were so shaken by it.” A full hour went by in court as the two sides debated whether Blatt had done these things , and if he did, what should be done about it. The mood seemed halting, disjointed, and vicious.
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