The MT interview: Mark Getty

Heirs to fortunes rarely manage to increase the family wealth, and in the case of the Getty family some of those heirs have done their best to dissipate that fortune - with one exception. Mark Getty has not only proved himself, but has put the Getty name back in business too.

by Chris Blackhurst
Last Updated: 31 Aug 2010

Clogs to clogs in three generations. A well-worn saying, but nevertheless frequently accurate: the brilliant, voracious business founder, whose children lack his appetite and commercial acumen; then, the grandchildren with the same lack of hunger and nous. Result: disappearance of a business name and dissipation of a fortune. Such familiar downward spirals are proof that, in business, genes don't matter.

Mark Getty, grandson of the richest man in the world, shows no sign of a return to the use of wooden footwear, however. His feet move so fast as he races between his many and varied business interests that a pair of gold-plated Air Jordans would suit him better. If he isn't in Seattle chairing Getty Images, the most successful picture agency in the world, he's taking legal action to protect the family oil business against the Russians or keeping an eye on online Wisden, the cricketer's electronic bible. (Or he's giving slices of his vast wealth away - the National Gallery received £10 million a couple of years ago.)

Those heirs who go on to grow the family firm and wealth are rare; those who take the name in a different direction and are successful, rarer still.

In a sense, why should entrepreneurs' families be any different? It stands to reason that the children of someone of incredible talent are unlikely to be so blessed.

True in real life, true in business. And, when all is said and done, why should the next generations bother? Imagine you're born into money, you have more than you need - and thanks to trust lock-ups and skilful fund management, more than you and your children and their children will ever need. What would you do?

Come on, be honest: you'd probably do a worthwhile job that paid you very little, or dabble in charity work and play a little golf, or paint, maybe. What you wouldn't do is a company start-up, one where you had to roll up your sleeves and put the hours in, all the time risking your family's reputation and also some of its cash. Would you?

Getty did. Business is all about people and human nature. It's too easy to apply analysis, to say that Getty, in co-founding a photography company, produced a model that worked, that he and his business partner, Jonathan Klein, set out to build market share in a fragmented industry through acquisition and consolidation, and now head a billion-dollar concern with shares quoted on Nasdaq.

Put yourself in Getty's shoes, inside his mind. You're born a Getty, grandson of the late oil baron John Paul Getty, son of the father who, along with your uncles, sold Getty Oil to Texaco for $10.1 billion in 1984. Like many of his extended family, Mark Getty could have chosen to do ... well, not very much. Nobody blames them - heaven knows, most people in their position would do the same.

This Getty, though, was different. He didn't want 'to spend the rest of my life observing other people running businesses. I wanted to build a business myself.' From an early age, he explains, 'I wanted to go into business. The last thing I wanted in life was to be measured by what I had inherited, as opposed to what I had done.'

He was also keen to re-establish the Getty name, not to remain as a family known for fabulous riches and little else, but for generating wealth, for being a leading player in an industry. Already he could see the disappearance of commercial wherewithal from the family. His aim was to restore it, to put Getty back in business.

We meet in his office in central London. His style is modern functional.

His clothes are work casual. Among the papers on his desk is a catalogue from the El Greco exhibition at the National Gallery. The wall behind his desk is dominated by two drawings. One, by the Italian artist Alighiero Boetti, is in Biro on paper. It picks out in code the letters to form the words, 'improbable non impossible'. Next to it is a similarly baffling diagram for Getty Images' platform to sell pictures on the internet.

He is a large man, fit-looking, with a powerful frame and strong jaw.

A full head of wavy, reddish brown hair makes him appear more farmer than sharp media business executive. Invariably, he is described by colleagues and friends as affable and personable. It is certainly true that he seems laid-back.

He is also thoughtful and serious: questions are answered deliberately and slowly. Every word is carefully chosen. He gives the impression of taking his responsibilities extremely seriously - either to shareholders and staff, or to his wife and children, or to the rest of the extended Getty family, or to the world at large.There is an air of burden and duty about him. That's not to say he isn't jolly - he is, he has a quick sense of humour. But there's caution as well. He isn't one to let go, not with a journalist, at any rate.

He has a famous name, but an unknown face. You won't find him at many celebrity gatherings; he's not a regular in those party shots beloved of the tabloids and glossy magazines. He lives at Wormsley, in the Chilterns, with his wife Domitilla and children on the estate of his late father, Sir Paul Getty; he works; he goes home; from time to time he travels abroad. His officially supplied CV lists just one hobby: reading. That's it. West End premieres, fast cars, polo and yachts are for the other members of the super-rich - this one isn't interested.

Let's deal with some of the personal stuff, the bit he refers to as the 'tragic background paragraph' and the 'trite association of money and tragedy - it's so profoundly boring'. To an extent, his cynicism is merited: whenever anyone focuses on him, they mention the early history and he does find it tedious. But who can blame them? It's too beyond the ken of ordinary folk to ignore and, like it or not, it's part of him.

He was born in 1960, in Rome. His grandfather, John Paul, sent his father there to manage the family oil interests in Italy. Grandfather and father didn't get on. The old man was a tough, fierce individual who believed in divide and rule even among his own children, and could be notoriously tight-fisted when he chose.

Eugene Paul (he later dropped the Eugene in favour of John Paul II and then lost the John to become Paul) married Gail, whom he'd met at university, and they had four children: John Paul III, Aileen, Mark and Ariadne.

The marriage broke up and Mark's father married Talitha Pol. The pair took drugs and in 1971 Talitha died of a heroin overdose. John Paul II became a recluse, living in Cheyne Walk in London and bingeing on drink and drugs. After more than a decade, he emerged from his self-imposed exile and rejoined the world, moving to Wormsley, indulging his love for all things English, especially cricket, and giving financial support to whatever took his fancy.

Back in Italy, Gail was determined her children should have as normal an upbringing as possible, and moved them to a village near Siena. In 1973, Mark's brother, John Paul III, was kidnapped and had part of his right ear cut off to extract a ransom. The money was paid and he was released - but, notoriously, his grandfather refused to pay the ransom immediately and the affair dragged on for months. John Paul III never recovered, later suffering a severe stroke that has left him partially paralysed and almost blind.

Mark's sister, Aileen, who once described money as 'a toxic element', married Elizabeth Taylor's son, Christopher Wilding. She became addicted to cocaine and later developed Aids.

Even retold in this condensed form, Mark Getty's background is more than a paragraph. Just a smidgeon would be enough to weaken some people, but here he is, looking normal and proclaiming his normality. It's something he likes to mention: how normal he is. The litany of trauma is bound to have affected him, but he doesn't bear any obvious scars. He is more serious, more determined to stay out of trouble himself and not to succumb to temptations put in his way, more suspicious of strangers, less likely to make close friends easily - that's about all.

For that, credit must go to him for developing a hide thick enough to take the pain and to his mother for keeping his feet on the ground. His childhood in the Italian countryside was, he insists, settled and blissful. He later married an Italian and keeps a home there. If asked for his nationality, he makes a point of saying he carries an Irish passport, is based in Britain and was raised as an Italian.

After his brother's kidnapping, he was sent to boarding school in England, not with the other rich kids at Eton or Harrow, but to Taunton, in Somerset.

It was a wise choice. At Taunton he could play lots of sport, study, and mix with boys from more ordinary, professional backgrounds. At Oxford, too, he avoided the glamour set, preferring the company of a tight circle of friends. He read politics and philosophy, and left without a firm idea of what he wanted to do.

He knew it would be in business, but he didn't know where or what sort.

By chance, during a flight, he struck up a conversation with the man in the next seat, who turned out to be Scott Smith, head of a prospecting company in Utah. Smith told Getty that if he wanted a job, to turn up at Salt Lake City airport with a pair of boots and some Levi's. Getty did, the job was on an oil rig and he stayed nine months. Typically, Getty didn't tell Smith who his grandfather was.

He then landed a job with Kidder Peabody in New York. The $50,000 a year trainee investment banker's salary meant that for the first time he didn't have to turn to the family for handouts, and his desire to self-start a business career was underway. The period at Kidder coincided with the family's sale of Getty Oil. He was involved, albeit tangentially, as he helped his relatives sell their heritage.

He came to London to work in the corporate finance department of Hambros, which is where he met Klein. Clever and forward, Klein was a director of Hambros at 28; a South African by birth, he wanted Hambros to be the first foreign entity after Nelson Mandela's release in 1990 to back the new rainbow nation. Klein's idea was the Conservation Corporation, high end-user tourist game lodges in rural South Africa.

'Mark was a good person to work with me. We wanted high net worth individuals to join with us,' says Klein. Getty knew some of them, including members of his own family. On long flights to South Africa and the US, the thrusting banker and determined grandson of the world's richest man talked a lot.

They had an easy rapport. Klein had been at Cambridge, Getty at Oxford.

They were the same age and their view of the world was similar. 'He was aware I didn't want to stay in banking,' says Klein. 'He felt the Getty family had lost something valuable when they sold Getty Oil. They'd lost a lot of expertise and knowledge for a pile of cash. He wanted to build a business for the Getty family, which was appealing to me. I liked the idea of alighting on one area and building over the long term, and it would enable me to try my hand and run things. The idea of starting up and building something really attracted us.'

Despite their pedigree - Klein in banking, Getty being a Getty and in banking - they were still just two young guys with no operating experience and no clear notion of what they wanted to invest in. They agreed on the need to secure backing from sources additional to Mark's family. As well as the Gettys, they obtained promises of funding from Jacob Rothschild and the investment side of Hambros through senior executive Christopher Sporborg. 'There was no blank cheque from anyone,' says Klein. 'In principle, what we had was that if you bring a deal to us we may or may not approve it.'

In early 1993, Getty left Hambros; Klein joined him at the end of the year. Soon after, they had a lucky break. A Hambros staffer mentioned to Klein that he'd come across a business that seemed made for them: stock photography. They looked into this almost unknown profession of supplying images on request for advertising agencies for use in campaigns, companies for annual reports and brochures, and for the media. And they realised that the reason the industry was so little known was that it comprised many small agencies, most of them founded by photographers and poorly managed. The products, however, crossed national boundaries, and digital technology was coming up fast. Stock photography was crying out for consolidation and a professional eye. It was made for them.

Then they had another stroke of luck. Within the industry in the UK, one agency stood out as the market leader: Tony Stone Images. Klein's brother, who was in mail order and a user of stock images, mentioned to Klein that he'd had a call from 3i, the venture capital house. It was looking to sell a business called ... Tony Stone Images. Klein got on to 3i immediately and, in March 1995, in a closed auction, made a winning £16 million offer.

It was the first of more than 40 acquisitions. Today, Getty Images is worth more than $1 billion. Last year, the company notched up $523 million in sales and made a profit of $64 million. This year, it's looking to sell between $560 million and $580 million worth of photos. The company has a database of 70 million pictures, three million of which are available immediately on the internet.

As well as buying in photographers' work, it has also started to generate its own editorial image bank, sending snappers on assignment to cover news stories and sports events. At the forthcoming Olympic Games in Athens, Getty Images will have 40 photographers, compared with Reuters' 30. At one time, after all the various acquisitions, the firm's head-count was up to 3,200. After consolidation, and with the advent of digital technology and the internet, that figure is now 1,700.

It's a lucrative business. Getty can sell an image for up to $200,000 for an exclusive-use shot for an advertising campaign, say. The average price per image is $552 when a royalty is paid to the photographer, and $165 otherwise. When the partners bought Tony Stone, they paid four times cashflow; today, Getty Images shares trade at 30 times cashflow.

There's no question that Getty and Klein struck lucky. Strip away the pretty pictures and there was a badly run industry, populated in the main by enthusiastic but nerdy types. For example, Getty and Klein saw instantly what digital imaging could do; typically, the rest wanted to stay faithful to the old-fashioned lightboxes.

As well as their brains and energy - they would sit together, side by side in an office in Camden, ferociously swapping ideas and thoughts all day long - Getty and Klein had another key advantage: they were outsiders.

'I don't believe people within an industry are capable of driving through change to that industry,' says Klein.

Getty agrees. 'One of the questions we were asked all the time was: why do you think you can aggregate this industry? We didn't say: because we're so clever. But we did say that one of the skill sets we had, which wasn't present in the industry, was M&A. It was an industry populated by very good creative people, a lot of whom were ex-photographers. There was no-one with mergers and acquisitions expertise.'

At first, their intention was to let the individual businesses carry on trading under their own names, in different locations with their own budgets. This led to the situation, recalls Getty, where they had 88 offices around the world with more than 120 different marketing and sales systems.

'We had to aggregate, we had to consolidate. Eighty-eight offices went down to just 30, and the 120 systems became 20. Our basic strategy was an aggregation strategy.'

Lewis Blackwell, Getty Images' creative director, says he was approached by them in 1998 and was 'blown away' by their vision. 'They were consolidating a cottage industry; plus, when they started out, the internet was a raw thing. They realised they were one of the few businesses that were perfect for the web because they were handling digital information.'

It's hard to think of a company better placed to exploit the internet - Amazon, possibly, but even it has stocking, warehousing and distribution costs. Getty has none of these.

The arrival of the world wide web was manna for Getty Images. 'Where we were lucky was that someone came along and invented the internet,' acknowledges Klein. 'It meant our distribution costs went from very high to very low. But where we can take the credit is that we saw very early the potential and invested in it, and very quickly moved that way.'

Both Getty and Klein had to learn how to run a business, to be front-seat drivers rather than bankers sitting in the back. They had to gain staff management skills. 'We were one-dimensional; our experience was all M&A,' admits Getty. 'There's a sea of difference between being a banker and actually running a company. You're more involved in everyone else's lives. As a banker, you go from project to project. It's changed both of us - I've felt overwhelmed by it all at times.'

Amid the relentless upward curve - 'a fairytale ride' is how Getty describes it - there is one blip. Their company is classic B2B, but they made one foray into retailing by buying art.com in 1999. The plan was for consumers to buy art for their homes online, instead of traipsing round poster and framing shops. The public weren't interested, and Getty Images had to write off $120 million on the venture. 'We were wrong to assume consumers would flock to a website to buy pictures for their walls,' says Getty.

'We replaced the physical process with an online business, but it didn't work.'

Getty's company has matured. The frenetic dealmaking has ceased, it's now headquartered in Seattle (to take better advantage of new technology there), and the firm is moving into other regions: Japan, China, India and Russia are all earmarked as areas for expansion. Supplying pictures to news and sportsdesks - something dear to Getty's heart - is also set to grow. He wants the business to become synonymous worldwide as a one-stop brand for quality photographs.

To that end, as well as building the editorial side, Getty Images carries pictures from other agencies on its website. The idea is that the Getty site becomes a home page for the industry, that its platform becomes the main distribution channel for all stock and editorial pictures. Assignment photography is another moneyspinner. You're based in London, you need a shot of your Moscow office for your annual report. Who do you ask? A Moscow photographer? Getty hopes that to save you the time and hassle, you will contact his firm and leave it to them.

Getty's relationship with Klein has shifted. Getty is the chairman back in London overseeing strategy; Klein is the CEO, running the business.

Much of the company's relentless energy undoubtedly flows from Klein. They still speak every day, still see each other for board meetings and whenever they can - they are about to go to China together to promote the business and explore opportunities there. But they're no longer so hand-in-glove, so tied to each other.

It's partly because Getty himself has changed. Since his father's death, he's become immersed in other businesses: some, such as Wisden, the cricket publisher, he inherited from his father; others belong to the whole family.

Much of his time at the moment is taken up with legal actions launched by the Gettys against Gazprom, Russia's part-state-owned gas supplier, in London and New York.

Getty is leading the case, which centres on a family investment in a Russian oil and gas joint venture and its sale to Gazprom. The dispute is complex and its process tortuous. At stake, though, is $150 million to $200 million. 'I find myself overwhelmed by the issue in Russia - therefore, the amount of time I can spend on Getty Images goes down,' says Getty.

Thanks to his business experience, Getty has become an influential voice within the family, especially where its investments are concerned. 'We're not Sicilian,' he says, laughing, 'there was no election. I didn't have to kill anyone.' But then, he adds, still grinning: 'Neither are we a democracy.'

In all, he says, there are 59 family members. 'They're all over the place, there's a branch in the US and a branch here. We try and keep in contact, partly because we have to, for business, but also for sentimental reasons - like any other family.'

Quaint English causes cannot expect to be beneficiaries of this Getty's largesse. 'My father was never interested in anything outside England. He was an Anglophile who was interested in things that, in his mind, were quintessentially English.'

Is he the same? 'No. It's not the way I think.' He adds, possibly with one eye on newspaper headlines: 'That doesn't mean I'm not an Anglophile, though.'

When he writes cheques, they will be to charities abroad. 'I'm interested in helping people obtain the benefits enjoyed by the First World of efficient government. I want people in sub-Saharan Africa and other extremely impoverished parts of the world to acquire those same opportunities.'

He's not going to be rushed, however. 'If you have the good fortune of having money, it's almost an obligation to think creatively of ways of helping other people. But it shouldn't be in a haphazard way. You need a structure, a formula, so you don't give to everything. I'm in the process of developing my thoughts.'

He takes it all very seriously, chairing Getty Images, carrying the hopes of a dynasty. Come on, though. It must be great, being so rich, so young - does he ever feel he's the One? 'You've been watching too many Matrix movies. Unless I'm mistaken, don't they revolve round a character who spends his time saying he isn't the One? I know how he feels, I'm the same.'

And his face breaks into a broad smile.

THREE TOUGH ISSUES FOR MARK GETTY

1. Getty Images has only one significant competitor, Corbis. But the man behind that is Bill Gates, who has very deep pockets and does not like being second to anybody.

2. Getty must be careful to avoid spreading himself too thinly if he is to continue his current run of success.

3. For one of the world's wealthiest men, his feet are planted firmly on the ground. He will need to keep them there.

GETTY IN A MINUTE

1960: Born 9 July in Rome. Educated in Italy, and at Taunton School and

Magdalen College, Oxford

1991: Corporate financier, Hambros Bank, London

1995: Co-founder, Getty Images

1995: Buys Tony Stone Images

1996: Floats Getty Images in New York

2003: Getty's father, Sir Paul Getty, dies

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