© Jose Luis Magana/AP
"Beck has driven [Mercury Radio Arts, Beck's wholly owned private umbrella company] into the ground due to his own erratic behavior, excessive spending, and mismanagement," Balfe alleges in a countersuit filed Monday afternoon in Dallas County, Texas, District Court—a response to Beck's July 29 lawsuit accusing his former protégé of fraud, breach of contract, dereliction of duty and various other misdeeds.
Balfe—whom Beck quietly fired in December 2014 while publicly lavishing praise—is demanding more than $3 million in deferred compensation and unpaid bonuses and legal fees, as well as unspecified "exemplary," or punitive, damages.
Beck's lawsuit—in which the official plaintiff is Mercury, parent company of Beck's The Blaze—demands that Balfe, who was Mercury's chief operating officer and The Blaze's chief executive, return a portion of the $13 million he was paid from 2009 until his forced departure.
Balfe is pursuing a separate legal action claiming that Mercury and Beck are liable for his lawyer's fees and must indemnify him from any monetary damages because of the laws of Delaware, where The Blaze is incorporated, and because The Blaze's corporate bylaws protect officers of the company from lawsuits.
If Beck and Balfe can't settle their disputes and their dueling lawsuits go forward, a take-no-prisoners discovery process could very well precede a full-blown jury trial that would undoubtedly air a mountain of dirty laundry.
Ironically, Balfe—who last year joined with several former Beck executives to launch their own digital media company, Red Seat Ventures—continues to own a slightly more than 10 percent stake in The Blaze.
"Balfe propelled Beck and Mercury on a meteoric rise to national prominence and delivered millions of dollars in profits to Beck and Mercury," claims the complaint filed by the 38-year-old Balfe against his 52-year-old erstwhile mentor, for whom he started working as a 19-year-old computer geek in 1997, when Beck was a relatively unknown local radio host in Hamden, Connecticut.
Mercury Radio Arts responded to Balfe's lawsuit in a statement: "So now the world is to believe that Glenn Beck would not be Glenn Beck without Mr. Balfe? Well, that's not only comical but we look forward to presenting actual evidence that proves our position and makes a mockery of his."
Balfe's complaint, meanwhile, says: "Balfe tuned into Beck's show daily. Beck often spoke about his recovery from his long journey with alcoholism and how he felt called to give back, particularly by creating a website for a charity he was starting—Family First. Even at 19 years old, Balfe was a skilled web designer. was building websites with advanced technology, such as live streaming. When Balfe learned Beck was doing a remote broadcast from a local coffee shop, he eagerly attended and offered Beck his help to make the website a reality."
The lawsuit describes Balfe, who dropped out of the University of Connecticut and worked as a consultant before joining Beck's enterprise fulltime in 2001, as a "close friend" who spoke at Beck's 1999 wedding to his second wife, Tania.
"Nevertheless," Balfe's complaint alleges, "when Mercury later struggled due to Beck's own erratic and reckless behavior, Beck suddenly fired Balfe with an unceremonious email. As before, Beck promised that Balfe would be taken care of in terms of a severance package commensurate with his long service, and that Balfe did not need to worry about Beck keeping his word because the two were close friends. Unfortunately, these promises proved hollow."
Balfe's lawsuit repeatedly acknowledges that he never had a written employment contract with Beck. "Claiming he was a man of his word," it claims at one point, "Beck falsely and repeatedly promised Balfe that he did not need written contracts confirming their contractual agreements."
Balfe's complaint—which offers an epic narrative of Beck's climb from "a morning radio DJ to a national superstar, appearing on the covers of Time, Forbes, and [New York Times] Magazine"—focuses on a more recent period in which "Beck's behavior became increasingly erratic and he distanced himself from the company," the lawsuit alleges.
"Beck became obsessed with rebranding himself as an entertainment figure as opposed to a news personality, even though news is what had made Mercury millions," it continues.
"Though Beck was known as a news personality, because of the backlash he had received from the major networks, Beck turned his back on the most lucrative part of his career, instead choosing to focus on entertainment.
"Beck began to refer to himself as Walt Disney and went so far as to paint 'Walt' above his door and 'Roy' above Balfe's door," the lawsuit goes on, in a reference to the entertainment legend's older brother and business partner Roy Oliver Disney.
"Beck insisted his work with news be quashed, sometimes refusing to participate in a show entirely if it contained a news segment. He spent Mercury's money developing films, planning amusement parks, and planning to reinvent the healthcare industry starting by building his own hospitals. In the summer of 2013, Beck even produced a live stage show called 'Man in the Moon' that cost over $2 million for a single night run."
The lawsuit continues: "Beck also became suspicious of almost everyone. He began terminating employees, including those who had been with the company for more than a decade. Balfe navigated these terminations for Beck at his request, working hard to ensure that they did not result in the release of information that was embarrassing and potentially devastating for Beck's brand."
The lawsuit doesn't specify the "embarrassing and potentially devastating" information it alleges. Nor does it name Jonathan Schreiber, a former tech entrepreneur and self-described Beck "superfan" with scant media experience, who networked his way into his idol's confidence and ultimately displaced Balfe as Beck's top executive—earning the nickname "Voldemort" among some employees who found his manner off-putting and his influence with the boss alarming.
Balfe's complaint chronicles his own alleged role in Beck's rise from 2005 onward as a ratings-grabbing personality on CNN's sister network HLN and then on Fox News, as well as a munificently paid radio star, but dates the beginning of Beck's troubles to a 2009 appearance on Fox & Friends during which he asserted that President Obama had "a deep-seated hatred for white people or the white culture..."
In a November 2014 video on The Blaze, a tearful Beck blamed that low moment on a recently cured mysterious brain illness that "quite honestly has made me look crazy."
"Balfe knew that Beck was an incredibly controversial figure, and that his relationships with mainstream media outlets were sensitive and prone to risk," the complaint reads. "Balfe recognized Beck's behavior was only moving him further away from the mainstream media, so Balfe set out to mitigate those risks by building up strong, independent digital assets, including a robust subscription-based web site, generating millions of dollars per year, and strong social media presence."
The complaint continues: "In 2009, Beck solidified his disconnect with the mainstream media, which would effectively isolate him and Mercury from many future opportunities—Beck appeared on Fox & Friends and called President Barack Obama a racist. Although Beck was known to be controversial, the blowback was the most severe public relations crisis the company had dealt with yet.
"Mercury felt the effects across all of its media relationships. By mid-2010, it became clear that Beck's future with Fox News was unstable at best. Beck wanted to continue making the controversial statements he was known to make without fearing censorship and backlash. Therefore, at Beck's request, Balfe began to build a fully-independent media operation that would not be subject to the pressures of the major media companies—TheBlaze, LLC."
Balfe's lawsuit narrates: "In April 2011, Fox News made the announcement the production staff was expecting—they were parting ways with Beck. With his mainstream media presence shrinking, Beck decided to leave New York and move to Texas. Although Mercury had a full-time staff of around 200 and complete studios and production facilities in New York, Beck—the primary host—decided he could no longer remain in New York.
"The vast majority of the staff refused to make the move to Texas, and therefore only certain production staff joined Beck in the beginning. Despite the limited staff, Beck leased (and later purchased) the Studios at Las Colinas, a 72,000 square foot production space. In addition to this massive cost, Mercury was forced to build connecting studios in the new Dallas offices and link the new studios and staff to the primary infrastructure already present in New York."
Later, Beck purchased an expensive-to-maintain private jetliner, a 1966-vintage DC-9 formerly owned by Beck's friend, the late right-wing billionaire, Richard Mellon Scaife.
The narrative continues: "By 2014, Mercury faced immense cash pressures as services continued to decline, ad sales lagged, and deals fell through. Balfe watched as Beck's erratic behavior devastated the company Balfe had spent his entire career building. In an effort to save Mercury from the mounting financial pressure, Balfe even agreed to defer his own compensation—essentially providing an interest-free loan to Mercury. Balfe deferred his compensation based on the understanding that he would be paid as soon as Mercury was less stressed by the mounting cash pressures. By the time Balfe was terminated in December 2014, Mercury owed him approximately $1.68 million in deferred compensation.
"As Beck's paranoia increased, so did his spending. The company was spending excessive amounts to pay for unnecessary private security Beck required, and Beck insisted on leasing unnecessary office space as well as building and rebuilding himself unnecessary offices and sets. Despite Balfe's best efforts, Mercury soon fell behind on vendor payments."
The lawsuit continues: "As 2014 came to a close, Balfe was one of the only original executives left. For the first time in Balfe's long relationship with Beck, Beck began to exclude Balfe from key decisions, resulting in the wrong people being selected to pursue key business opportunities.
"Sensing a disconnect, Balfe flew to Texas to meet with Beck in person. He realized Beck wanted to take the companies in a direction Balfe could not agree to, but in the interest of preserving over 17 years of friendship with Beck, Balfe suggested an exit plan that would be mutually beneficial.
"Balfe met with Beck at his home [in suburban Dallas] and discussed two options. First, Balfe offered to buy The Blaze from Beck and assume the New York office space obligations, an idea that initially came from Beck.
"Alternatively, Balfe offered to start a new company, taking several employees that Beck had been trying to fire for months, and allow Beck and/or Mercury to be an investor.
"Beck asked Balfe to let him think it over. Regardless of which option he chose, Beck assured Balfe that night that Balfe would be taken care of and treated fairly. Beck represented this would include a standard severance package. Beck again emphasized to Balfe that his word was binding and that Balfe was like a member of his family. Balfe once again relied on Beck's repeated promises.
"Two days later, Beck emailed Balfe and told him Mercury was choosing a third option—to simply fire Balfe."
Who cares? It's Glenn Beck