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The Ambush at Sheridan Springs (How Gygax Lost TSR)

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I found this article and thought it would be good to share:

https://medium.com/@increment/the-ambush-at-sheridan-springs-3a29d07f6836

In the fall of 1985, Gary Gygax was the most famous and powerful figure in hobby gaming. He was President and Chief Executive Officer of TSR, Inc., the company that published Dungeons & Dragons. Gygax had personally directed the development of the game for the last decade, most recently producing new titles for its Advanced Dungeons & Dragons line: earlier in 1985, he was the lead on Unearthed Arcana, and in the fall they were putting the finishing touches on his Oriental Adventures. He had been featured in People magazine, and appeared on national television. His name and his game seemed inseparable.

October 22 was a Tuesday, and Gygax was wrapping up another day at TSR corporate headquarters on Sheridan Springs Road in Lake Geneva, Wisconsin. His last appointment was a board meeting just after close of business; with 1,371 shares of stock, he held controlling interest in the company, and thus chaired the board. The meeting started late, at quarter past five. Five of the company’s six directors were present: two of the independent directors, James Huber and Wesley Sommer, and then the three principal shareholders: Gygax, Brian Blume, and Kevin Blume. Gygax was surprised to find both of the Blume brothers in attendance. Though they held a substantial stake in the company—as a family, nearly one thousand shares total—they had lost their executive positions at TSR following a reorganization the previous year.

The board proceeded to review the company’s turbulent negotiations with the American National Bank before moving on to the ostensible purpose of the meeting, a discussion regarding TSR’s royalty payments to authors. In recent internal memos, Gygax had insisted that the company allow its employees, himself especially, to retain all copyrights, trademarks, and royalties for works authored rather than assigning them to TSR; in the eyes of other directors, this was in violation of existing contracts. During the course of this discussion, Gygax mused that since it seemed the board would find it easier to afford him these privileges if he were not an employee, perhaps he should just resign.

.....

As these events played out in real time, he had little opportunity to reflect—Wesley Sommer then formally requested that Gygax tender his resignation. No doubt still grappling with his new circumstances, Gygax refused. Sommer therefore proposed the following to the TSR board for a vote: “Resolved that, in the best interests of the corporation, E. Gary Gygax be terminated as President and Chief Executive Officer and Chairman and that TSR and Mr. Gygax negotiate and seek to enter into an agreement whereby Mr. Gygax would continue to do creative work and the Company continue to utilize his creative talent.” This last clause no doubt related to the royalty issue previously under discussion. James Huber seconded this motion. The motion passed with three directors in favor, one opposed, and one abstaining.

While this stunning turn of events might seem momentous enough for one meeting, the board then turned its attention to the newly-created vacancies in TSR’s senior management. Immediately, the Blumes put forward Sommer to succeed Gygax as Chairman of the Board. This passed easily. But then Sommer advanced another, more surprising proposition: that Lorraine Williams should replace Gygax as President and CEO of TSR.

Blindsided, Gygax pushed back against this proposal—Williams had only worked at TSR for six months, and had no background in games. But Sommer championed Williams on the grounds that she previously had acted as President in Gygax’s absence; she would transition into the role with the least disruption to the company. Gygax counterproposed bestowing the position on Willard Martens, who, in addition to acting as secretary for the board, was a finance Vice President of TSR, but Martens declined, ostensibly due to his other responsibilities.

After a short discussion, the board approved the motion to appoint Lorraine Williams President and CEO, overriding Gygax’s strenuous objections. But Gygax probably would not have bothered to contest this appointment had he understood the true situation. Unbeknownst to him, everyone else in the room was privy to a critical piece of information that he lacked. Gygax had missed the warning signs: he overlooked how immediately prior to the board meeting, several of the other directors, including Sommer, Huber, and Kevin Blume, had congregated in Williams’s office. In that private conference, these parties agreed not to reveal the extent of the changes in shareholder positions to Gygax, and swore Martens into secrecy as well. What they all knew was that just one day before, TSR had issued stock certificate #107 to Williams for 1,690 shares. Williams was now the largest shareholder.

.....
 

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