Edition, March 8, 2000, Page 1
REPORTS 1999 REVENUE OF $275M
New York, reported its worldwide revenue reached $275 million
in 1999, up six percent from 1998.
B-M global key client relationship strategy--coupled with
dramatic gains in new business from technology and Internet-related
companies--added to revenue growth, it said.
firm currently handles more than 85 Internet companies.
U.S. operations--with strong revenue growth in 1999--continue
to be the engine driving our worldwide company," said
Christopher Komisarjevsky, president/CEO, B-M Worldwide.
"Looking ahead, I am very positive about each of our
regions: Europe is getting stronger and stronger, Asia Pacific
is recovering well from the economic pressures of the past
few years, and our single-brand network in Latin and South
America is unmatched."
MANHATTAN TAPS KETCHUM
Chase Manhattan Corp., New York, has selected Ketchum to
serve as its corporate PR agency of record after receiving
pitches from eight agencies.
a unit of Omnicom Group, will work on a range of assignments,
including a major initiative to increase public understanding
of Chases capabilities for companies creating value
in the new economy, according to Frederick Hill, EVP, Chase
corporate marketing and communications. He said Ketchums
capabilities in New York, San Francisco and Silicon Valley
set it apart from the rest of the firms pitching Chases
opportunity to serve Chase is one of the most exciting assignments
related to this new economy," said David Drobis, CEO
of Ketchum. "It will leverage the investments in our
global corporate and technology practices and in training
programs that foster collaboration."
& Rubicam acquired Robinson Lerer & Montgomery,
New York, 130-person firm handling corporate and financial
PR including mergers and acquisitions.
Linda Robinson and vice chairman Walter Montgomery are remaining
with the firm with Robinson also becoming a Y&R vice
Lerer, the third owner, has joined client America Online
as SVP of PR/IR. He gave up his title as president/COO of
RL&M but continues to be an owner.
ranked fifth among IR firms handling M&As in 1999, according
to The Daily Deal. It worked on two deals worth $88 billion.
Clients include Oxygen Media, Revlon and Texaco.
PASS RATE HITS 35-YEAR LOW
pass rate of those taking the "Universal Accreditation"
exam of PRSA and eight other PR groups in the fall of 1999
hit an all-time low--46%.
89 of the 193 PR people taking the test passed it. The previous
low pass rate for the test, created by PRSA in 1965, was
52% in the fall of 1998.
406 people taking the test in all of 1999 (57.3% passing
it), was fewer than the 457 who took it in 1989, when PRSA
had about 5,000 fewer members. PRSA members pay $275 and
members of other groups, $385. Almost all of those taking
the test are PRSA members. PRSA is spending $635,875 on
APR this year (net cost of $475,075).
test has not materially changed for 15 years and a new version
suitable for PRSA members and members of the other groups
is being prepared. The highest pass rate in recent years
was in 1992 when 346 of 422 passed it (81.9%).
Gerard left Deloitte & Touche after
five years. He was national director of marketing and communications,
a title taken by David Crutcher, who was in charge of Tri-State
& Decker and PR counselor David Olsen and his firm,
filed notice they will appeal the Baltimore court decision
awarding $3 million to Phyllis Brotman and her firm, Image
Dynamics (Jan. 19 NL)...
Edition, March 8, 2000, Page 2
WEBSITES LACK CREDIBILITY
annual Middleberg/Ross Cyberspace Study found journalists
distrust the information on websites.
so much information posted on the Internet--often without
editing or fact checking, credibility of information has
emerged as a significant issue," according to New York
PR counselor Don Middleberg
Steven Ross, a Columbia University journalism professor,
have co-authored the study for the past six years.
they solicited the opinions of managing and business editors
at 1,509 daily newspapers and managing editors at 2,500
out of 15,000 magazines. The response rate was approximately
10%. For the first time, representatives from computer-focused
publications were included.
to rank the various types of online sources on a five-point
scale from "not credible" to "highly credible,"
only trade associations were seen as more credible than
not credible, including those sites supported by nonprofit/public
interest groups and activists.
as least credible were message boards and chat groups.
the lack of credibility, most journalists continue to use
Web or Usenet forum postings as sources for an article,
especially if the information is confirmed elsewhere.
percent say they would consider doing so in the future,
even if not confirmed by a source.
reporters are much more likely to use forum postings as
sources than reporters from newspapers.
COS. OPEN CALLS TO INVESTORS
for the National Investor Relations Institute, Vienna, Va.,
shows a major increase in corporations opening their analyst
conference calls to individual investors and the media.
Louis M. Thompson Jr. said "The most astounding finding
is that 48% of the companies that conduct conference calls
are now Webcasting them over the Internet, real time. This
wasnt the case just a year ago."
shows of the 83% of companies that currently conduct conference
calls, 82% allow individual investors real-time access as
compared to 29% in a survey conducted nearly two years ago.
percent of the media have access to their calls, compared
to 14% as reported in the prior survey.
of companies providing open access is expected to increase
this year to 90% for individuals and 86% for the media.
which was conducted by the Rivell Research Group, Westport,
Conn., between Feb. 3 and 16, surveyed 225 senior IR officers
by phone, representing about 10% of the companies in NIRIs
PLAN FOR PAC/WEST FILED
F. Tobia Jr., and his wife Maureen who are president and
VP, respectively, of the former Los Angeles-based Pacific/West
Communications, will use the $2.3 million of their arbitration
award to pay off creditors of the bankrupt PR firm.
will be considered at a confirmation hearing, which is scheduled
for April 10 at 2 p.m. in the U.S. Bankruptcy Court, Los
who opened Pac/West in 1982, filed a voluntary Chapter 11
bankruptcy petition in 1998, claiming it was precipitated
by a downward turn in its client base following a dispute
with the California Dept. of Transporation, a major client.
had filed a lawsuit in Feb. 1997 against Caltrans, seeking
$10 million in damages for breach of contract and defamation.
an arbitrator ordered Caltrans to pay Pac/West approximately
$2.1 million, and on Feb. 14, 2000, Caltrans issued a warrant
to Pac/West for $2,301,521.43 in total satisfaction of the
liquidation plan, the Tobias will make lump sum payments,
totaling about $2 million, to its secured creditors, including
a payment of $1.8 million to the firms attorneys,
and to pay off a loan of $180,000 made by Stephen's brother.
is seeking $50,000 as compensation for assisting counsel
both prior to and during the course of the Caltrans action.
will provide the Tobias with more than they would otherwise
get should Pac/West be liquidated in Chapter 7, the attorneys
the reopening of Pac/West is on hold.
and his wife are undergoing treatment for post-traumatic
stress resulting from the ordeal.
J. Lipper, who was VP/PR of Aerojet-General
Corp. during the days of the Apollo moon landings, died
Feb. 13, a day after his 80th birthday. Lipper is survived
by his wife of 48 years, Donna, and four children. His
daughter Donna Lucas is president/CEO of the Nelson Communications
Group, Sacramento... James
Adshead Jr., 76, a retired PR executive
of the DuPont Co., died Jan. 12.
New Yorks PR director Kathleen Ruane
is helping her husband Peter Ruane, a former NYPD lieutenant,
in his bid to win the Democratic nomination for a New York
Senate seat. Ruane is running against Hillary Clinton.
Gaines, a reporter and editor for The Chicago
Tribune since 1977, has joined Hill and Knowltons
media relations practice in Chicago as a senior managing
who heads the Council of PR Firms, said six firms have joined
in the last month, and not in the last year as reported
in the March 1 NL. Bergen said 80 firms had joined
the CPRF in 1999.
Edition, March 8, 2000, Page 3
HAS $372,000 STASHED AWAY
350-member New York Financial Writers Assn. started
2000 with a total cash balance of $372,800, according to
the just-released treasurers report.
of the money in the treasury is raised through the sale
of tickets and ads for the annual Follies Show and Spring
dinner. The bulk of the tickets and ads are bought
by PR firms and corporate PR departments.
the annual meeting, which was held Jan. 26, a new slate
of active and associate member officers were elected, with
Dan Bases of Reuters moving up to president.
Auerbach, a retired PR consultant, Alan Goldsand, a publicist,
and Thomas Mariam, an IR pro, were reelected associate representatives.
minutes of the meeting show Sally Heinemann, who is chair
of the active nominating committee, suggested a "fusion"
slate in light of the two competing slates that were offered.
committees slate had removed Susan Rodetis as a VP
candidate because she works parttime for Paine Webber.
said the bylaws disallow anyone to participate as an active
member if they work for a non-media company.
fusion slate, which was rejected, nominated Rodetis as treasurer,
her current position, instead of VP, which puts her in line
to move up as president.
Kandel objected, saying Rodetis work in no way fell
under the category of PR or investment counsel.
who was at the meeting, had no comment when given an opportunity
alternative slate, with Rodetis as VP, got 69 votes to top
the active slate, which got 20 votes.
dispute erupted when Irene Weissman raised objections to
having an executive secretary who lives outside of the New
said the current secretary, Joyce Spartonos, who lives in
Arizona, had missed several Follies rehearsals, was late
for the Follies show and could not get in for the annual
meeting because of severe weather conditions.
also questioned the cost of the 800 phone number. Robert
Yafie said the Association had handled the phone bill when
Spartonos was living on Long Island.
Deutsch wanted to know what, if anything, was not getting
done because Spartonos is in Arizona. There was no
response to her question.
SHOWS RISE IN NON-PROGRAM TIME
in network programming rose to record-high levels in 1999,
according to a report put out by the American Assn. of Advertising
Agencies and the Assn. of National Advertisers.
study, which defines clutter as "all non-programming
content," reveals non-programming time on network TV
during the primetime period increased 59 seconds to hit
an all-time high of 16.43 minutes per hour over the previous
increase is a major source of concern for ad people, who
believe there is a direct correlation between the increase
in clutter and a diminishment in the effectiveness of ads.
continues to reign as the most cluttered and most commercial-laden
network daypart, with 16.52 commercial minutes per hour,
an increase of 54 seconds per hour from the same period
a year ago.
report said certain broadcast and cable networks are allocating
more time to public service announcements (PSAs), a trend
that started in 1998.
report said ABC aired the most PSAs among the networks during
primetime, daytime and early morning hours, followed by
CBS and NBC.
TNN, TNT, and CNBC gave the most time to PSAs among the
report places no negative stigma on time donated or allocated
to the delivery of PSAs.
FUNDS TO MOVE H.Q.s TO N.Y.
Funds magazine is relocating to Time Inc.s worldwide
headquarters in New York.
magazines move from Deerfield Beach, Fla., is expected
to be complete by June.
acquired MF and a stable of seven investment newsletters
in late 1998 from the Institute of Econometric Research.
Curran is managing editor.
first bureau will remain in Deerfield Beach, and the bureau
will continue to produce IERs newsletters.
SPORTS ILLUSTRATED FOR WOMEN
first issue of Sports Illustrated for Women, which will
be published every other month, went on newsstands this
Bailey, editor, claims the magazine, which is targeted to
women ages 18-34, is the only magazine that covers the full
spectrum of women's sports through the eyes and spirit of
will focus on training routines, nutrition and health, fashion
of the premier March/April issue features tennis superstar
Edition, March 8, 2000, Page 4
OF READERS DIGEST RESIGNS
P. Willcox, 53, has resigned as editor-in-chief of Readers
resignation follows the recent appointment of Eric Schrier
as editor-in-chief of all Readers Digest products.
and the magazines senior staff will direct operations
until a replacement is named.
New York Times Co.
has put seven daily and non-daily newspapers, and nine telephone
directories, up for sale.
dailies being sold are Santa Barbara (Calif.) News-Press,
Opelousas (La.) Daily World; Palatka (Fla.) Daily News,
and Lake City (Fla.) Reporter.
non-daily papers, all in Florida, being sold are: Sebring/Avon
Park News-Sun; Fernandina Beach News-Leader, and Marco Island
total, the papers and directories being sold account for
approximately $52.7 million, or 2% of the companys
which owns 55 daily newspapers in Canada and the U.S., is
selling all but one of its more than 130 daily and weekly
combined circulation of Thomsons daily papers exceeds
1 million, including The Globe and Mail, the companys
Toronto flagship and the only paper Thomson will keep.
chairman/CEO, Richard Harrington, said newspapers no longer
fit in the companys longterm strategy of electronic
delivery of information, which comprises the bulk of Thomsons
$6.3 billion in 1999 revenue.
Journal Register Co., Trenton,
N.J., has put five daily newspapers in Ohio and Illinois
and a chain of weeklies in Missouri up for sale.
Ohio papers are: The News-Herald in Lake County, The Lorain
Morning Journal, The Dover-New Philadelphia Times Reporter,
and The Massillon Independent.
Missouri and Illinois papers include the Suburban Newspapers
of Greater St. Louis and The Alton (Ill.) Telegraph.
WEB NEWSPAPER TO BE LAUNCHED
Mick McFadden, a former automotive engineer who is based
in London, Ontario, is starting a worldwide daily newspaper
on the Internet.
CityByCity.com, McFadden said the site will offer local
news, weather, sports, classified ads and a chat room for
"every city in the world."
has already created a separate website for every city in
North America for classified ads.
plans to hire more than 15,000 reporters, editors and photographers
across North America and 44,000 worldwide.
said he has hired about 2,200 editorial staffers, covering
news in about 674 different cities, including New York,
and about 25 other cities in the state.
who founded Request International Corp., six months ago,
is also exploring the possibility of entering into partnerships
with local newspapers to supply news and classified ads.
believes his Web paper will eventually replace local newspapers.
is the future of local news, and its here now. If
someone is too busy to browse through the paper, then they
can have specific sections, or even specific articles E-mailed
to them or buy products by entering a list of keywords specific
to their interests," said McFadden, who sees a large
market for local classified ads.
will be charged an annual flat fee of $40 to get E-mail
delivery of news off the website.
journalists can apply for jobs at CityByCity.com. McFaddens
phone number is 519/686-2777; E-mail: [email protected].
TRAFFIC INCREASES REPORTED
Company Digital, the Internet division of The New York Times
Co., reported an increase in traffic on all three of its
results for January 2000 vs. January 1999 were as follows:
views (number of individual Web pages viewed during
a particular period of time) rose 47% at NYTimes.com;
118.7% at Boston.com, and 57.6% at NYToday.com.
(total number of visits to a site) grew 39.1% at NYTimes.com;
51% at Boston.com, and 167.3% at NYToday.com.
achieved a home/work reach of 3.4% (Source: Media Metrix).
previously Boston bureau chief, AP, has been named executive
editor, TelekomNets publishing division, Boston.
Windolf, who is executive editor of The
New York Observer, a weekly paper, is joining Vanity Fair
as senior articles editor.
replaces Ned Zeman, who was named contributing editor.
Edition, March 8, 2000, Page 7
LIKE WSJ, BIZ BOOKS, ARs
Street Journal, Forbes, Fortune, Business Week and annual
reports rank high among investors in terms of credibility,
according to a survey by Columbia University for the PRSA
Credibility Index" shows that corporate information
is highly believable when it takes the form of a story in
a financial or business newspaper or is provided by an industry
expert, professional financial planner or "a stockbroker
reports got the highest score for overall credibility--82
out of 100. However, only 8% of those in the survey said
they read the reports.
were given to different forms of company advertising and
business papers such as the Wall Street Journal topped all
media at 81, ahead of Forbes or Fortune (77), and also specialized
investing magazines (73).
news got a mean rating of 56 and local daily papers, 61,
the same as investment advisory newsletters.
found that giving easy access to investment information
does not assure credibility.
to name sources for advice on investment decisions, respondents
identified websites more than other outlets, even though
they also felt online sources to be among the least believable.
percent said the Internet was their most frequent stop,
compared with 24% citing professional advisors and 15% naming
personal sources as well as personal research.
president of the Foundation, said, "Clearly, the web
had become the medium of choice for seeking out investment
information today, though it has yet to become the medium
officers were rated highest in credibility at 70, below
consumer advocates and university professors, but above
CEOs and company presidents, both of whom received ratings
of 65. CEOs ranked below more personalized sources such
as a friend in the business (68).
SHRINKS FINANCIAL REPORT
Assn. of Business Communicators, acting on the advice of
its new outside CPA firm, Deloitte & Touche, sharply
reduced the amount of information in its financial report
line items were cut from 22 to eight and revenue items from
12 to seven.
said it is reporting "broad categories" rather
than "detailed activity lists" in order to "better
display performance in IABCs major business components."
separate expense totals for the executive board ($210,806
in 1998); leader services ($150,464 in 1998); contribution
to IABC Foundation ($202,670); information technology ($287,580);
annual conference ($635,225) and Communication World/Worldbook
expense categories include membership, $1.1 million; conferences,
seminars and awards, $1.3M; general/administrative, $856,006;
"other," $548,955; information/publications, $498,479,
and Communication World/Worldbook, $623,440.
categories include conferences, seminars & awards ($1.7M);
dues/fees, $2.1M, and information/publications ($582,455).
broken out are accreditation costs ($38,681 in 1998) and
lost $339,987 in 1999
had a deficit of $339,987 in 1999 on income of $4,845,061
after a loss of $107,116 in 1998 on income of $4,574,778.
year end (Sept. 30) was $1,879,195 vs. $1,882,864 and net
assets were $519,150 vs. $860,755. Included in 1999 are
the Foundations cash of $91,938 and net assets of
manager of strategic communications development at Hallmark
Cards in Kansas City, Mo., and chair of the IABC, said the
group is investing in web services, international,
and "life-long learning" and planned to have a
deficit. He said the intention was not to withhold financial
data from members and that it would be given to anyone who
asked for it.
said Foundation financials have been combined with IABCs
as advised by D&T and that this is allowable under criteria
of the Financial Accounting Standards Board. Because of
the combination, only 1999 was reported. Two-years of results
will be reported next year.
IABC CFO, said a partner at Grant Thornton left the firm,
and IABC, which had used GT five years, decided to pick
a new firm. D&T, which has a large non-profit practice,
won in a competitive race that included other majors, he
Dues at $1.3M
has a deferred dues account of $1,370,799 to acknowledge
that it has not yet delivered services to members who have
paid dues a year in advance. IABC has had "anniversary"
billing since 1987 (members pay dues each year on the month
they joined) in order to spread income more evenly over
a years time.
payable were $348,727 at Sept. 30, 1999 and were partially
offset by $124,991 in accounts receivable ($38,600 allowed
for doubtful accounts).
had accrued expenses of $237,846.
COMMITS $10M TO POSTAL REFORM
Publishers of America has committed to a $10 million campaign
to fight the Postal Services proposed 15% postal increase.
is currently shopping for a Washington, D.C.-based PR and
PA firm to help with the initiative.
should be made within the next month, said Mary McGeachy,
VP of corporate communications at MPA.
Edition, March 8, 2000, Page 8
ax taken to the IABC financial report (page 7)
is a major disappointment.
leaders, mindful of the $800K debt that was piled up in
the mid-1980s, have been open about the groups finances.
But, acting on the advice of its new "Big Five"
CPA firm, Deloitte & Touche, it has chopped income/expense
line items from 34 to 15.
& Touche gut financial report
(Deloitte & Touche)
seminars, and awards
World and World Book
exhibits, and lists
contrib. IABC Found.
IN UNRESTRICTED NET ASSETS
IN NET ASSETS
net assets at beginning of year
ASSETS, BEGINNING OF YEAR
net assets at end of year
ASSETS, END OF YEAR
dues and fees
seminars, and awards
exhibit and list rental
exhibit and list rental
assets released from restrictions
International Assn. of Business Communicators, on
the advice of new CPA firm Deloitte & Touche,
which replaced Grant Thornton after five years, substantially
reduced the number of categories reported to members.
Expense categories went from 22 to eight and revenue
categories from 12 to seven. Fiscal years end
Sept. 30. No previous year has been provided
for comparison in the '99 D&T report.
no longer get to know what is being spent on the board and
other leadership activities; what the annual conference
and seminars make or dont make, and ditto for awards,
publications, accreditation, information resources, etc.
is a new expense category called "other" that
totaled $548K in 1999. Who knows whats in that?
of the Financial Accounting Standards Board are cited, as
though FASB recommended this. FASB allows things. We cant
imagine it advising non-profits to reduce information to
the IABC atrocity provides a chance to look at financial
reporting of non-profits in general.
Imagine not being able to learn the final score
of a football game for five months because the refs had
to look at all the plays in videotape, analyze players
blood, etc. Who would be interested by then?
IABC report is arriving five months after the close of the
year. If it was in trouble and unable to deliver paid-for
services, members wouldn't be finding out until now. There
is an instant score available--net assets. IABCs net
assets tumbled from $860K to $519K. Major companies often
report results two weeks after the close of the year on
an unaudited basis so theres no need for this delay.
should be setting new standards of disclosure and not taking
its cue from CPAs, who have been under heavy criticism
for years. Business Week Oct. 5, 1998 had 17 pages on companies
"fudging numbers" and CPAs "turning a blind
eye." Forbes on Dec. 14, 1998 had a seven-page cover
story on The Hustling of X-Rated (tax) Shelters. A Deloitte
& Touche letter pitching tax shelters and asking part
of the savings was featured. Criticism by the SECs
Arthur Levitt and others continues.
should be describing the makeup of various boxcar figures
such as accounts receivable and payable. We need to know
how old these are and their nature. The standard audit is
nearly useless to the layperson. The reports are a visual
disaster, with numbers placed far away from the category
and no dot leaders provided. A ruler is needed to connect
the category with the proper dollar figure. Income categories
may not match expense categories or change from report to
report. Much data is simply left out. Rent, but not
square footage, is given.
should post the entire revamped audit report on its website.
Its interesting, even hilarious, to see what little
use information-stingy associations are making of the web--a
cheap, instant way to communicate. PRSA is budgeting only
$60K out of a $9.2M budget for its website in 2000. An ex-PRSA
president said PRSA should conduct its nominations and elections
this year via the web. All members would vote, not just
the Assembly. Bios of candidates, platforms, etc., would
be on web.
barebones IABC audit recalls a similar move by PRSA and
Ernst & Young in 1991. Functional expenses (27
types of spending broken out 12 possible ways, or about
250 expense amounts), were removed from the audit. Treasurer
Joe Vecchione said it was "a better way" and was
advised by E&Y. Complaints brought the chart back
in 1992. But removed were nine important categories including
expenses of the board and leadership; districts; members
directory, and legal, insurance & audit.
of the IABC and PRSA statements shows that some very odd
things are going on in accounting these days. IABC, with
nearly $5M in revenues vs. $8M for PRSA, has $1.9M in cash
but only reports $519K in net assets. PRSA, with $1.6M in
cash, reports net assets of $1.85M. IABC acknowledges liabilities
of $1.37M for services owed to members who have paid a year
in advance while PRSA acknowledges only $350K. Standard
practice is that revenues are recognized when earned, which
is what IABC is doing. PRSA is booking most of its dues
and "subscription" revenue right away although
dues invoices say that $25 is for Tactics and $24 for Strategist,
which are delivered over a years time. Chair Steve
Pisinski answers that "many accountants believe deferred
revenue, especially in the case of membership organizations,
is the equivalent to capital, net worth, or in the case
of non-profits, unrestricted net assets and are not in reality
a liability." Deferred revenue has no effect on a groups
ability to provide future service to members, he says. "That
ability resides in the financial strength of its balance
sheet, liquidity, and the prospect to grow and prosper as
a viable organization," he added.