Barry Diller, a billionaire, stood on Monday to defend his media empire in a lawsuit that claimed it cheated Tinder founders out $2 billion.
The hookup app’s co-founder and former CEO Sean Rad claims that Diller’s companies — IAC and Match Group — gave outside investment bankers fake “doom-and-gloom”Financial projections made during the 2017 valuation process. They say the banks then valued Tinder at $3 billion when it should have been worth at least $13.2 billion, dramatically reducing payouts to the co-founders and other early employees.
Under questioning from Rad’s attorneys, a defiant Diller strongly denied that he ordered subordinates to lie to banks, calling the idea “absurd.”
“It would be wrong,”The 79 year-old tycoon made the comment in reference to the idea that banks could be lied to.
As evidence that Diller allegedly tried to intimidate Rad, Rad’s attorneys pointed to a May 2017 email where Greg Blatt, a longtime Diller ally who succeeded Rad as Tinder CEO, wrote that Diller wanted to “go after”Sean Rad and his Family “everything they have” — in apparent retaliation for the founder complaining about the valuation process.
Rad was not threatened, the mogul said “I can kind of conclusively say that I’ve never threatened anyone.”
“I can kind of conclusively say that I’ve never threatened anyone,”Barry Diller spoke in court. Alec Tabak
Blatt is scheduled to testify in the trial before it wraps up in December or November. According to Thomas Claps (Susquehanna litigation analyst), the parties may also decide to settle for between $300 million and $700 million before trial ends.
Diller — who wore a striped navy suit and a clear facemask to Manhattan Supreme Court — appeared to grow exasperated with Rad’s attorneys, saying “Oh my god”Asking twice, and then removing at least one of the questions. “ridiculous.” Rad attorney Orin Snyder and Diller frequently spoke over each other during Diller’s testimony, which lasted more than three hours.
“Tell me the truth, Mr. Diller,”Snyder, who also represented Apple, Facebook, and WeWork founder Adam Neumann, was demanded.
While Diller credited Rad with coming up with Tinder’s iconic swipe-oriented design, he argued that the app likely wouldn’t have reached profitability without years of financial backing and guidance from Match, which also owns dating apps like Hinge and OkCupid.
“The Match people had become really experts at taking free properties and turning them into businesses,”Forbes estimates Diller’s worth at $5.3 trillion. “[Match’s] model is literally implanted into Tinder.”
Sean Rad (pictured) and other Tinder founders are suing Diller’s companies for $2 billion.Alec Tabak
Rad — who founded Tinder in 2012 while working for a Diller-controlled startup incubator called Hatch Labs — took the stand last week to detail his accusations against Diller’s companies. He said that the contested valuation process — which ultimately netted him nearly $400 million but he claims should’ve given him more than $1 billion — left him with mental scars.
“I had PTSD, been going to therapy, I’d been working on myself,”Rad spoke on Friday about his mental health after the 2017 valuation process.
Rad also said that his experience inspired investments in an online health startup.
Another early Tinder employee who is also a plaintiff in Rad’s suit, Alexa Mateen, testified after Diller on Monday, telling jurors that Diller’s companies “cheated us out of what was supposed to be ours, corrupted the valuation.”
Yet attorneys for Diller’s companies attempted to cast doubt on Alexa Mateen’s testimony when they asked her about a reported $8.8 million that Rad had personally wired to her in late 2017 — less than a year before the group filed the suit against IAC and Match.
Mateen, when asked about the previously unknown payment, said Rad had sent it to her but that she didn’t know how. “had nothing to do with this lawsuit.”
Barry Diller appeared to grow exasperated with questioning from Rad’s attorneys.Alec Tabak
“Mr. Rad wired me that money because I was one of the first employees at Tinder,”Mateen, Justin’s brother who also worked at Tinder, is a plaintiff in this suit. “I was not happy with the amount of equity I got… he told me not to worry and that he would give me some of his own money.”
Match attorneys have also used millions of dollars in litigation funding payments to key witnesses to cast doubt on Rad’s case. Rad’s camp has argued that the payments are irrelevant to the suit, and the judge presiding over the trial found that the payments were not illegal, saying that it ”approaches the line between legitimate litigation funding and illegitimate payment of witnesses, [but] it does not cross it.”
Justine Sacco, a spokesperson for Match, claimed that Mateen’s testimony is “not trustworthy”In a statement to The Post
“Alexa Mateen, like others, has been paid millions of dollars by Sean Rad’s team,”Sacco stated. “Plaintiffs are attempting to corrupt the entire judicial system and we are confident the jury will see through it.”
Brandy Bergman, Rad spokesperson, did not respond when asked.