Tuesday, November 5, 2013

Tierney's Sales Work "Considerably Below Expectations"

By Ralph Cipriano
for Bigtrial.net

Brian Tierney's performance as a sales consultant was "considerably below expectations," according to a confidential management analysis that preceded his firing.

In February, former Inky publisher Tierney began negotiating a deal to launch a national advertising campaign on behalf of Interstate General Media [IGM], owners of The Philadelphia Inquirer, Daily News, and philly.com. He was to be paid a salary of $25,000 a month, or 10 percent of the revenues he generated, whichever was higher.

The contract took effect in April, when, according to confidential records, Tierney was paid a partial month's salary of $12,500, and brought in zero revenues.

In May, according to the records, Tierney was paid $25,000 in salary and brought in zero revenues.

In June, according to the records, he was paid $25,000 in salary and brought in in zero revenues.

In July, according to the records, he was paid $25,000, and brought in zero revenues.

Anyone see a problem?

"After four months of zeroes, somebody should have said, 'What's going on here,' " said Bill Ross, executive director of the Newspaper Guild of Greater Philadelphia.

"When Brian was the publisher and he had a sales rep who brought in zero revenues after four months, I'm pretty sure he would have wanted to terminate him," Ross said.  "Why he (Tierney) was allowed to get away with such an outrageous deal is offensive and disgusting to me and my membership."

Tierney is the former publisher of the Inquirer, and CEO of Philadelphia Media Holdings LLC, the company that bought the Inquirer, Daily News and philly.com in 2006 for $515 million, and went bankrupt three years later. IGM bought the two daily newspapers and philly.com website last year for the reduced price of $55 million. Tierney also is chairman of the Poynter Foundation, the fundraising arm of the journalism institute.

In response to an email seeking comment, Tierney issued a blanket denial and a threat. He said he was putting this reporter "on notice" that the confidential analysis dealing with his performance as a newspaper salesman was "replete with falsehoods." Publishing a story based on that information would "knowingly and recklessly defame me," Tierney wrote. "If that happens I will take appropriate actions against you and any co owners of your blog."

When asked to elaborate on what the falsehoods were, or explain his side of the story, Tierney did not respond over the past two days. He also did not respond to a repeated request for an interview.

Tierney is a former newspaper publisher whose name has been bandied about during a highly publicized court battle between rival groups of IGM owners. One group of owners has proposed bringing Tierney back as publisher. The other group has literally said, over our dead bodies. So Tierney's performance in his latest reincarnation as an IGM sales consultant is of public interest.

The plan to hire Tierney began with optimism and good feelings.

On Feb. 11, Tierney wrote George Loesch, IGM's senior vice president of sales and marketing, "I look forward to the possibility of working with you guys ... there's a lot we can help you accomplish fast on the revenue front. Best, Brian."

On Feb. 25, Loesch broached the proposed the idea of hiring Tierney to Inky publisher Bob Hall, associate publisher Mike Lorenca, and new owners George Norcross and Lewis Katz.

"He [Tierney] would be looking for a 4-month commitment for services, $25,000 per month," Loesch wrote. "He can help us to drive revenue and go after incremental opportunities."

On Feb. 23, 2013, Tierney wrote Loesch in an email, "It was great to meet with you today and I'm more convinced that ever that we can help you move that revenue needle. As we discussed, our initial focus will be on the top 25 national accounts as well as others where we agree the account is worth targeting."

"Sound good?" responded Tierney. "Let's go! Best, Brian."

A proposed agreement dated Feb. 22 called for paying Tierney $25,000 a month or 10 percent of gross ad revenue "for mutually agreed upon target accounts." The list of 25 initial targeted accounts included Kmart-Sears, Kohl's, AT&T, Target, Citizens Bank, T Mobile, JC Penny, Sleepy's Mattresses, and Dick's Sporting Goods.

But the list wasn't big enough for Tierney.

On March 13, Tierney emailed Loesch, saying, "You might want to add other accounts where I have a special relationship such as Verizon (my old ad agency was advertising agency of record, creating the James Earl Jones campaigns); Comcast (I was able to get them to more than double their ad buy when I was publisher. They went from about $3 million to $6+ million)."

The list was expanded to include 80 targeted accounts. 

New owner Lewis Katz was enthusiastic about the prospects for success.

"This is a proposal I think we should accept," Katz wrote Loesch, Lorenca and Hall on March 12. "George is in favor. I'm in favor. And I think Brian brings enormous value to our sales initiative."

It took a while to negotiate a contract between IGM and Tierney. On March 10, Tierney wrote Katz an email headlined "subject: next steps." "The fee is $25,000 per month or 10 percent of revenues, which ever is higher," Tierney wrote.

So with a deal in place, super salesman Tierney rolled up his sleeves and went to work.

But Tierney's promises didn't match his results. On October 29, Loesch wrote a grim analysis of the deal with Tierney's company, Brian Communications.

How many of those 80 targeted accounts did Tierney bring in?

According to the confidential records, none.

Tierney's scorecard was zero for 80.

In his analysis marked "confidential -- internal use only," under "recommendations," Loesch wrote, "Terminate our strategic marketing and sales consulting services contract with Brian Communications. Overall, Brian Communications ad revenue performance has been considerably below expectations. From the time when the relationship started in mid-April, (6 plus months) Brian Communications has under performed and failed to generate revenue on a targeted list of opportunity accounts provided to them."

"It should be noted that (same month) commission fees earned have failed to exceed monthly retainer fees throughout the term of the engagement YTD" (year to date), Loesch wrote. "While advertising revenue was generated during the engagement, it has been entirely from current accounts, and Brian Communications has been unsuccessful in producing any new accounts."

According to an attached summary, Tierney came up empty on landing any accounts, new or old, in April, May, June and July. In August, he landed Temple University as an account for $59,000 worth of ads. In September, he brought in $35,000 from Temple University and $9,000 from Widener University, for a total of $44,000.

So, over six months from April to September, he brought in $103,000 in ad revenues, according to the confidential records, including $94,000 from Temple, and $9,000 from Widener. During that same six-month period, the records show, he was paid $137,500, for a total net loss of $34,500.

"He apparently set up a lucrative deal for himself," Ross said. "Just looking at the first four months, the fact that he generated zero business and received $87,000, it looks to me like the company was paying him to breathe."

The company would have done much better letting its regular sales force take care of existing ad accounts with Temple and Widener, Ross said.

If a Guild sales rep on salary had brought in those $103,000 in revenues, the sales reps wouldn't have gotten an extra cent in salary, which is, on average, $1,300 a week, Ross said. If the sales reps were working strictly on commission, they earn a forgivable draw of $2,500 a month [10 percent of what Tierney cost the company] and would have been paid no more than 10 percent in commissions, or $10,300, Ross said.

A subsequent study of the Tierney contract projects revenues of $90,676 from Temple and Widener in October, and $63,463 from Temple and Widener in November. From April through November, Tierney would have been paid an additional $50,000 in salary, at $25,000 a month, for a total of $187,500. IGM decided to terminate Tierney effective Nov. 30.

Over an eight-month period from April to November, Tierney was projected to bring in a total of $257,139 in commissions, while drawing $187,500 in salary, for a net gain to the company of $69,639.

Tierney, however, has claimed to one of IGM's owners that he was responsible for generating some $400,000 in ad revenue that he wasn't given credit for.

In response to claim, Loesch wrote in a Nov. 2 email, "A little overstated as Brian was taking credit for some additional revenue sold by us. But close. If we assume the 10 percent commission on $400k, that would be $40k. Unfortunately, at 25K per month retainer, we will be paying Brian Communications $187k. It was time to end it."

While Tierney wouldn't talk about his firing to Big Trial, he told reporter Thomas Fitzgerald of the Inquirer that he lost his sales gig because of the "collateral damage of institutional fighting" amongst the new owners of the Inquirer.

To the Inquirer, Tierney insisted that his sales performance had been satisfactory, if not stellar.

"All of those we worked with at the Inquirer have not only been pleased but delighted by the results we have generated," Tierney told his former newspaper.

So while Tierney's work as an ad salesman may have been considerably below expectations, when it comes to PR, he still knows how to spin a story.

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