Reply To: Email: You fell off KENNY BOY!! YOU FELL OFF!!! (Continued from 12-08-2003)

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At the time we were acquired, the company wasn’t for sale. Walter Forbes had been on our board for a number of years, and blindsided me after a board meeting with the offer of acquisition.

In the weeks following his (Walter’s) proposal there were intense negotiations, and the deal almost fell apart several times. Price was certainly an issue, although the price was the simplest issue negotiated. We resolved the price almost immediately.

The huge issue was the management of the company post-acquisition. I needed to believe that the company would retain its independence after the acquisition and be able to continue producing great product. After intense negotiations, a structure was put in place that I believed would result in a major win for Sierra’s employees and customers. 

Walter Forbes vision was to roll together  all of the larger software companies, creating one huge entertainment company. The acquisition of Davidson (Blizzard) and Sierra was really intended as just the beginning.

We agreed that the non-creative groups, such as manufacturing and distribution would be consolidated, but that the product groups would retain their independence. A complex structure was put in place that not only gave me clear command of Sierra, but also visibility and influence over all of the products across the consolidated company. This would allow me to focus on what I did best (product) while creating a distribution company that could deal with the operational issues.

The deal would not have closed were I not convinced that it was in the best interests of ALL of Sierra’s employees, customers and shareholders.

Almost immediately after the deal closed I realized that things were not going to be as we had planned, and not all of the problems were with the acquiring company. Sierra’s sales force was consolidated with Davidsons, and there were problems with the Davidson sales force selling Sierra products. They had been selling educational software which had a very different sales profile than computer games. There were also issues with a cultural difference between selling preschool software and Leisure-Suit Larry. Some of our biggest hits were offensive to some people at Davidson. It was an issue no one had expected.

Prior to the acquisition, the potential for these kinds of problems had been discussed. A structure was put in place to deal with them, and it was all ignored. A software board was to have been created, but it never had a single meeting. I do not know why. Also, Bob Davidson, who was running all sales for the consolidated company suddenly left the company. I felt that I, or someone from my senior management team, should have been installed to run the company, but CUC brought in a member of their senior management with no experience in software. I was frustrated and unhappy, and wound up leaving the software business entirely.

I have heard rumors that Bob Davidson’s departure was hastened by his asking tough questions at the board level. I was also on the board, and did see some things that perhaps with 20/20 hindsight should have been yellow flags. That said, the accountants who had studied the company (CUC) for years didn’t see the problems, so I can’t beat myself up too much for not seeing the problems during a few board meetings. Actually, it is still tough for me to see Walter Forbes as a criminal. He was a very visionary person, who I had tremendous respect for. It never would have occured to me to suspect him of criminal conduct. I do think all of the trial transcripts are available to the public, and someday I’d like to read them to form my own opinion about what happened. To this day, I still have trouble saying, absolutely, that he was a crook. I have accepted that he was, but it is so out of sync with the Walter Forbes that I knew that I’d someday like to see the evidence myself and form my own opinion.

It is a huge disappointment for me that Sierra died. Actually, Sierra didn’t die, it was murdered. We had tremendous momentum, and a system in place, that I thought would keep the company going forever. It shouldn’t have been possible that the company would be so poorly managed. It was a horrible turn of events, and should have been avoidable.

-Ken W