By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Photo by Keith MayOrange County is home to two of the world's richest men-Henry T. Nicholas III and Henry Samueli, founders of the Irvine-based computer network company Broadcom. Outside their low-profile hardware industry, the two corporate executives were once famous for being rich-they own assets of about $2.6 billion apiece. Now they're famous for almost single-handedly wiping out the extreme-sports media industry in Orange County.
On Sept. 11, Nicholas and Samueli laid off 64 of roughly 130 employees who work for Broadband Interactive Group (BIG), a subsidiary housed in Broadcom's Irvine headquarters. The same day, BIG also killed publication of half a dozen sports magazines the company acquired less than a year ago.
The official reason? BIG wants to shift resources to Bluetorch TV, an hourlong extreme-sports show on cable TV's Fox Sports Net. "This decision lays out a clear and faster path to profitability for BIG and ensures the highest quality of content across strategic elements of the Bluetorch network," the company said in a press release sent to the Weekly.
Many of those laid off had left long-term careers in traditional media to join BIG's extreme-sports website Bluetorch.com; last week, they walked away with two months' severance pay and six months of health-insurance coverage.
Nicholas and Samueli-whose combined 1999 earnings were $64.5 million-could easily pay those employees' salaries until retirement without so much as a dent in Broadcom's financial portfolio. In fact, they're so rich from the cable and computer chip technology they own that it's hard to understand why they'd even be interested in dominating OC's fledgling extreme-sports industry in the first place.
In January 1999, Nicholas and Samueli-who were in the process of entering into negotiations to finance Anaheim's yet-to-break-ground Gotcha/Glacier indoor ski park-founded BIG. In what can now only be described as a failed attempt to dominate televised, online and print coverage of the extreme-sports industry, BIG bought six local magazines-Wave Action, Pit, Wakeboard, MX Rage, Skate and Swerve-along with Chicksticks.com, an Internet site catering to female surfers.
BIG's next move was just as bullish: the creation of Bluetorch.com, which they promised would become the hottest Internet destination for extreme-sports fans around the United States. To staff the publication, BIG lured numerous employees from such other sports magazines and websites as Surfer and Surfing magazines and Swell.com, sucking up some of Orange County's brightest extreme-sports writers and photographers.
In turn, Bluetorch.com bought the rights to Huntington Beach's annual Gotcha Pro surf contest, which it promptly renamed Bluetorch Pro.
It was with this year's Bluetorch Pro contest that the first signs of BIG's corporate personality emerged. Tradition had it that anyone could report on the event. But this year, reporters and photographers who assumed they'd be let in gratis were told not to bother even showing up.
"There were guys out there filming video for other publications, and the police literally threw them out," said one magazine writer who managed to get inside the event area on a VIP pass borrowed from a clothing retailer.
"Why they'd do that, block access to their own event...well, I just can't figure it out," said a photographer who said he was turned away when a former colleague, now a Bluetorch.com staffer, identified him at the gate and directed a security person to bar him. "I thought he was joking. I mean, you'd think it's in their self-interest to have the event covered everywhere by everyone. It just made them look really fucking stupid and petty."
The corporate controversy didn't end there. Bluetorch covered the surfing competition on its website and even posted comments by some participants who said they were worried about the quality of the water in Huntington Beach. Following an online reader's tip, a Weekly writer tried to read those comments for himself but discovered that the Bluetorch link to the story had mysteriously ceased functioning. (See A Clockwork Orange, July 28.) Bluetorch failed to return numerous calls seeking an explanation for what seemed to be an inexplicable act of retroactive self-censorship until several weeks later, when a company spokesperson finally e-mailed the Weekly to say he couldn't locate the story either.
"It looked like they were trying to shut up any critics of their event," said a sportswriter with a local publication.
News that two of Orange County's richest men had just kicked half of their employees out the door was greeted as a set of business statistics by The Orange County Register, which ran a brief article Sept. 13 announcing that BIG had "quietly laid off its work force over the weekend." But online sources-an array of sports-related websites like sacklunch.com and transworldsurf.com-provided more detail about the layoffs.
According to one account posted on sacklunch.com, people who had been employed at BIG for less than a year were "asked to pack up their stuff and leave the building by 2 p.m. or be escorted out by police." One anonymous employee claimed that nobody was even given time to call freelancers and tell them to drop whatever they were working on. "They shut down the network and didn't even let us get access to our computers to get our phone lists," he said.