Automattic Publishes WP Engine Term Sheet Amidst Controversy

As the Automattic-WP Engine controversy continues, Automattic published the term sheet delivered to WP Engine on September 20, 2024. “In the interest of transparency, we’ve published the term sheet we offered to @LeeEWittlinger and @heatherjbrunner, it’s a simple one-pager.”, tweeted Matt Mullenweg.

The announcement post reveals that initial discussions between Automattic and WP Engine began in February 2023, led by Matt Mullenweg and continued by Toni Schneider during Mullenweg’s sabbatical.

The term sheet outlines five key points regarding a trademark license agreement. Under the terms, Automattic would grant WP Engine the rights to use WordPress and WooCommerce trademarks and branding, with WP Engine agreeing to follow all relevant guidelines. WP Engine was presented with three options for compensation:

Pay Automattic a royalty fee of 8% of its gross revenue on a monthly basis, along with a detailed report of its gross revenue, granting Automattic full audit rights.

Allocate 8% of its revenue to employee salaries for work on core WordPress features under the direction of WordPress.org, with both WordPress.org and Automattic retaining audit rights.

Combination of the above two options.

The term sheet also prevents WP Engine from modifying or forking any software from Automattic, WooCommerce, or its affiliates. The agreement is for seven years with automatic one-year renewals.

However, the announcement post has a critical update: “Given WP Engine’s behavior, deception, and incompetence since September 20th these terms are no longer sufficient.”

Matt also told The Repository, “That deal’s not on the table anymore. We’re seeking more, not 8%. I don’t want to speculate on what the deal might be… In July it was less than 8%, it was smaller. In September it was 8%. The deal they have to do next could be taking over the company, they have no leverage.”

Public reactions to Mullenweg’s tweet sharing the term sheet have been mixed, with most replies critical of him, though some view the terms as reasonable.

You want to see their revenue as a report monthly broken down by product. You are a direct competitor! That can't be ok in terms of anti trust laws or something. The monetary amount also seems excessive on top of that.
— Steve Struemph (@SteveStruemph) October 2, 2024

The final results of a survey by Matt from The WP Minute:

Automattic v. WP Engine
— Matt (@mattmedeiros) September 27, 2024

During the ongoing discussions, co-founder & CEO of Cloudflare Matthew Prince offered to donate the capacity to power WordPress.org for the community.

We’d be happy to donate the capacity to power https://t.co/NYrfF5j4KC for the community.
— Matthew Prince (@eastdakota) October 1, 2024

Meanwhile, the controversy seems to be spilling into Automattic, too.

I've been told by a few sources that it's not a rumor. I don't understand. If you're not with Matt, you're against Matt and he'll pay you to leave? Seems like an odd way of going about things. https://t.co/Eh3NPrIAfm
— Jeff (@jeffr0) October 1, 2024