[UPDATE 12/12/2012 4:45 p.m. PST] NMR has gotten a hold of the company-wide letter sent by Danny Zappin addressing Ray William Johnson’s Allegations. You can find it HERE

[UPDATE 12/11/2012 4:00 p.m. PST] Shay Carl has responded to Ray’s post with his side of the story in a YouTube video: http://newmediarockstars.com/2012/12/shay-carl-responds-to-ray-william-johnsons-allegations-against-maker-studios-video/

Editors Note: All images that Ray refers to are attached in the gallery at the bottom of this post.

Let me start off by saying that I should have said all of this two months ago when everything went down. I held back because I don’t like to beef publicly. I’m not some sort of gangster rapper or pro wrestler; I’m an entertainer. As an entertainer, I make a lot of jokes about this or that, but it is never my intention to be malicious towards anyone. It’s just not who I am as a person.

However, Maker Studios has pushed me to a point where I need to tell the truth about what happened in the order in which the events occurred. I feel that I have a responsibility to myself and to the Youtube community to stand up to them and their rather thuggish tactics.

Two years ago, I signed my Youtube channel over to the Maker Studios network with hopes that I could utilize some of their production resources – which I did, and to be fair, for the first year or so I was content with my decision to sign with them. Unfortunately, things then took a turn. The first red flag arose when the now CEO Danny Zappin got drunk with me one night and informed me that he was a “convicted felon” and that he was waiting for his criminal record to be expunged so that he could officially become CEO of Maker. I’m not sure as to why he confessed to having an alleged criminal record, but this is not something I was informed of prior to signing with them, and it may have influenced my decision had I known beforehand. Regardless, I’m not one to judge someone for something that they may or may not have done in their past, so I tried to forget about it.

Six months later he approached me and said that Maker Studios needed to take a bigger cut of revenue from my online show “Equals Three,” and asked me to renegotiate my existing contract eight months prior to its expiration. I was reluctant to renegotiate my contract at first, but eventually I agreed. Their company had just recently laid off a significant percentage of their employees, and I wanted to be fair and allow them to take a bigger cut of the show’s revenue. At the end of the day, Youtube-based networks are built around exploiting Youtube channels for profit, and I totally understand that. Ultimately, I wanted to help them out and was open to seeing what the terms of the new contract might be.

When they brought me the terms of the new contract they wanted me to sign (See below “Maker Contract Page 1/2 and 2/2”), the terms were incredibly aggressive. They wanted 40% of my Youtube channel’s Adsense revenue after production costs, and more importantly, they wanted 50% of the show’s intellectual property in perpetuity. Let me clarify: they wanted to own 50% of the intellectual property of “Equals Three” for the rest of eternity and weren’t offering much in return. I have it all in writing.

When I politely refused their deal, as it was not in my best interest, they became increasingly aggressive. Negotiations quickly became a bizarre pissing contest between the heads at Maker Studios and myself. I wouldn’t hand over my intellectual property, and they wouldn’t stop aggressively trying to get me to sign it over to them.

After three weeks of failed negotiations, they suddenly brought me two other possible term sheets which were equally as unfair as the one shown. They more or less said that if I didn’t sign one of their deals they were going to shut down production on the album I was recording with their company. Of course I didn’t sign anything, and 48 hours later they shut down the “Your Favorite Martian” album that I had been working on for eight months. A day after that, they shut down production on “Equals Three,” a show that has been running strong for nearly 4 years – all of this in hopes of strong-arming me into signing over my intellectual property.

When they started shutting down my projects in a poor attempt to get me to sign a contract, I decided that Maker Studios was not the place for me. I don’t play ball like that. I do honest business, and I like to think that I’m always fair. The next day, I left the company and started shooting “Equals Three” from my apartment.

Two or three days later I casually announced in a Youtube video that I was leaving the company. My statement was vague, so as not to stir up any controversy or speculation. In response to my announcement, Maker Studios released a factually inaccurate statement to the press about the situation in a public attempt to make me look bad. (See below “Maker Statement”). Interestingly enough, at the time I hadn’t experienced an overall decline in “Equals Three” viewership. In fact, I was receiving 5 to 6 million unique viewers per month when the entire Maker Studios network was only receiving 21 million total unique viewers per month (See below “Comscore Breakdown”). The statistics are public and anyone can look them up. I also never had a “production staff of 12 people including a team of writers.” These are simply false accusations designed to paint me in a poor light.

Despite their thuggish negotiation tactics, their attempts to trash me, and the CEO’s personal claim to a criminal record, I still refrained from calling them out publicly, because again, that’s not who I am as a person. Even as I write this, I feel a bit out of character.

After their passive-aggressive PR statement went public, we called a meeting to work things through. In the meeting the heads of Maker Studios did plenty of backpedaling and CEO Danny Zappin himself specifically stated, “I won’t hold your Youtube channel/Adsense account in our network against your will. We will give it back to you.” The problem is, they aren’t giving it back to me. They haven’t made reasonable attempts to give it back to me. They are now even trying to leverage my own Adsense account against me so that I will “sign over all of Your Favorite Martian’s intellectual property, void my stock options in the company, sign a confidentiality agreement to never tell the truth, and are even suggesting that they have legal claims against me for trade libel, slander, etc.” (See below “Email screenshot”) even though I have kept my mouth shut about this and tried to play nice up until this point.

Hopefully, you can see now why I’m at my wits ends with these guys and am speaking out after being silent for so long. I would only like for my Youtube Adsense account to be returned to me as promised so that I can move on with my life. I don’t feel comfortable with it in the hands of people who do business this way – especially when one of them personally said to me that he is a convicted felon. I’ve never wanted to believe that people are overtly dishonest, but I’m beginning to change my mind.

At the end of the day, I have an obligation to my audience to perform and entertain them and keep my projects moving forward to the best of my ability. I hope that this story will make anyone in the Youtube community think twice about signing their Adsense over to a Youtube network or third party and that what I’ve gone through will help some digital content creators avoid the frustrations I’ve been dealing with. [laughs] If their aforementioned email is any indication, they will probably attempt to sue me for releasing all of this information publicly, but I have to stand up for myself. At the very least, I owe it to the Youtube community.