Wednesday, August 26, 2009

US Presswire "Steps In It" With MLB and Getty Images

As the boys of summer were just getting into the swing of things, US Presswire hired an unemployed Peter Toriello after he was laid off from Getty four months prior where he was in charge of the Getty's MLB relationship. USPW announced Toriello's hire as "Director of Global Sales and Business Development" on March 4, 2009. What they didn't announce was that in addition to Toriello's physical capabilities, they also obtained a valuable knowledgebase of information about how Getty was handling the MLB contract. With Getty losing the NFL to the AP, the MLB deal becomes that much more important to Getty's cache. What is in question is what potential proprietary trade secrets might Toriello have taken and/or shared with US Presswire, if any?

Not surprisingly, Toriello knows the financial cycles of the MLB teams, and he also had inside knowledge of just what Getty Images was charging MLB teams for asset management services. Each team has their own collection of wholly owned content that not only do they want marketed for revenue generation (that Getty would get a piece of, of course), but also for team uses - everything from billboards to brochures. Getty had an asset management solution that was one-stop shopping for both image licensing, but also asset management.

Was it a timing coincidence then, when Toriello contacted the teams in his new role at US Presswire, and what exactly was he offering them?

(Continued after the Jump)

Rewind a few months, and let's look at Toriello's first mis-steps. He wasted no time in demonstrating his lack of business accumen by using a quote from Michael Madrid of USA Today in his marketing materials to all of the people on his e-mail list. Below is a portion of the brochure he, as as USPW's "Director of Global Sales and Business Development" sent out:
As you can see, USA Today is quoted as saying:
“Week after week we have been continually impressed with the quality of images and their dedication to posting those images as quickly as possible. More often than not, we have found USPRESSWIRE has better quality images than the AP, Reuters or AFP… We trust their news judgment and appreciate the fine quality of photographers they have brought to their team.”
-- Michael Madrid, Photo Editor
There are three problems with the above quote, even if Madrid actually said it (which remains in question). Problem #1 is that even if Madrid did say it, he did not grant permission for it, or his name to be used in an endorsement of USPW. Problem #2 is that USA Today has a very clear policy about endorsements, and doing this violated those policies. Problem #3 is that not only did Toriello/et al use the USA Today logo in their brochure, but they also used the trademarks and implied endorsements by CBS Sports, ESPN, and others, as shown below, in that same brochure:
That brochure was accompanied by a friendly letter from Toriello:
Hello all.
I hope you’re all doing well and retaining as much of your partner base/ success as you recognized in better economic times.

I wanted you all to know I landed at a GREAT agency and have begun to make strides in developing our client base, content, marketing initiatives and partner relations. I am thoroughly excited to be a part of US PRESSWIRE and the close knit family of 250 photographers we work with.

I will be looking for any and all possibilities of where we can work together again. The corp address is Atlanta, as you can see, but I am working out of my home in NJ. It would be great to see you again. PLEASE keep in touch and please send updated contact info.
MLB was quick to object to this, and advised clubs of the MLB/Getty relationship.

This brings us up to date.

Now, just last week, Toriello again wrote to MLB clubs and offered US Presswire asset management, and MLB and Getty images were very quick to react. In response to the USPW solicitation, the MLB apparently sent out an email again reminding all the teams that Toriello is no longer with Getty, and is, in fact, with a competing entity, and encouraged each team to utilize the Getty asset management solution and reminded the teams that Getty is "the ONLY source approved for commercial use of photography."

Toriello wrote to the clubs:
Based on our earlier conversations, I'd like to get the ball rolling with our Asset Management solutions. Attached is a doc you can feel free to send around the Twins organization as budgeting time is upon us all. The numbers below are scalable to your needs. I would like to make myself available to the process of discussing this at length & how this can be an asset. The Club has some exciting opportunities ahead with the new stadium, and some of this increases the reason to look at this service, but please keep me informed of any feedback among your Club colleagues.
º Costs [twelve month contract minimum]

º $2,500 one-time fee
º Graphical interface 'skin' customization included
º Initial ingestion of wholly owned images included*
º Training included
º On-going support included
º Unlimited Users
Hosting Base Package (Up to 250G)
º $750/mo. ($3/G)
º Initial storage = approx 250,000 1MB images
º Each additional gigabyte of storage = $2.50/G (1,000 1MB images)
*If already digital w/ keywords and captioning completed

Peter W. Toriello
Director, Sales & Business Development
Fortunately, this time, Toriello didn't make the same USA Today mistake he did the first time around. Once again, MLB reminded people of the Getty relationship in a letter that was apparently sent out to all the clubs.

What Toriello is missing from all of this, is that the US Presswire access to MLB games is (or certainly was in the beginning), in large part, based upon the relationships that US Presswire President Bob Rosato had with MLB teams and executives which was, in turn, based upon his longstanding tenure as a senior photographer at Sports Illustrated. Rosato traded on that to get US Presswire off the ground, and USPW is a commercial venture that receives access only while in the good graces of the MLB.

With Getty, who pays a substantial amount of money for the exclusive commercial rights to MLB images, and who also expends a great deal of money covering MLB games, this is a colossal mistake by USPW. Getty likely will, in short order short-circuit USPW's access to many games, as MLB's good graces evaporate like dew on a hot August morning.

As the fractional revenue that USPW is generating is likely diminishing, bringing in Toriello seems like grasping at the straws of success, only to wake the sleeping giant of a Getty/MLB contract issue. I understand that Toriello was unemployed, but you don't board what looks to many like a sinking ship as the dock lines are crowded with traffic in the opposite direction. Coming from a place where atleast Getty paid $250 a game, he must have known that USPW wasn't even covering photographer expenses (in almost all cases).

While I can't support a work-for-hire deal for Getty freelancers, and think that those who accept such assignments are penny-wise and pound-foolish, they look like geniuses compared to those that partake in what amounts to free sideline fantasy seats that they justify by shooting during the game, pretending to be "one of the boys". In reality, the landscape is littered with the dashed dreams of those that were lured in by US Presswires' siren song, only to crash onto the shoals of revenue losses when no payments for months on end were forthcoming, and "promotional" giveaways of their images resulted in no revenue-positive sales in the first place.

Toriello seems to have accelerated MLB's need to address what US Presswire is getting for free, when Getty Images paid a princely sum for the rights contract. Look soon for US Presswire to be less present at MLB games moving forward.

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