Monday, September 23, 2013

USAT | New lawsuit adds to Hilton deal drama

The legal complaint filed last week against USA Today over its Hilton hotels digital portal is the latest chapter in a drama that extends back to the retirement of Publisher Dave Hunke last year, and the never-explained departure of his young technology lieutenant, Rudd Davis.

On Friday, UrbanDaddy accused USAT of breaching an agreement to pay the New York City company to develop the site for the hotel chain two years ago. In its New York Supreme Court lawsuit, UrbanDaddy accused USAT of misappropriation of trade secrets, and asked the court for monetary damages plus an injunction against the paper's continued use of the technology it says it created.

Hilton installed the portal, called The Point, at 3,000 hotels toward the end of 2011, according to a press release announcing the suit. The site, which guests use to access Wi-Fi, now draws about 130,000 daily visitors, helping the struggling newspaper recover lost print circulation as guests switch to smart phones and tablet apps.

But for a time in February 2012, USAT battled a published report that Hilton was canceling its business entirely. Leading industry blogger Jim Romenesko quoted an unidentified source saying the hotel chain was "about to cancel their contract,” and that “serious panic and scrambling [are] going on inside Gannett as we speak."

Asked for comment, USAT spokeswoman Heidi Zimmerman only fanned the rumor mill. “We don’t comment on or confirm the status of any customer or partner relationship,'' he quoted her saying. ("Really?" an evidently frustrated Romenesko wrote. "That’s the best you can do?")

On Hunke's watch
Later, Hilton spokesman Scott Carman told Romenesko his source was wrong.

The Hilton portal was developed while Hunke was relying heavily on Davis for tech help. Davis had joined USAT in 2008 when the paper bought his action sports site, BNQT. He rose rapidly when Hunke restructured the paper, eventually getting promoted to president of the new USA Today Travel Media Group.

But only weeks after that promotion, Davis left the company without any public explanation in early 2012. Three months later, in April, Hunke unexpectedly announced his retirement. Corporate hired Larry Kramer to replace him that May.

The UrbanDaddy suit can't help relations between USAT and one of its most important clients, Hilton. The chain doesn't need the negative public relations while getting snared between the newspaper and an angry vendor.

Plus, if Corporate doesn't settle the suit, the pretrial discovery process could be very interesting, should UrbanDaddy's attorneys at the Susman Godfrey firm depose Hunke and Davis.


  1. This comment has been removed by a blog administrator.

  2. Here's an edited version of 8:46's comment:

    Love the way Gracia unceremoneously dumped Hunke, who couldnt b.s. an explanation for his surprise departure at a staff meeting. For this song and dance man, it was a sad note. But it is my understanding that he was the one responsible for getting Hilton to sign on to the digital deal.

    Drinking buddy Rudd didnt do as well. ... Gracia would do well to thin the corporate ranks of excessively paid senior leaders


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