Edition, Dec. 17, 2003, Page 1
TYCO HIRES H&K IN REBOUND
which is trying to rebound from its corrupt past, has hired
Hill & Knowlton for media relations and PA support for
Reineke, H&K's COO and Washington, D.C./G.M., leads
the account. He is joined by Neil Dhillon, H&K s PA
director, and Paul Clark, senior managing director for media
relations. The H&K team reports to Tyco s New York office,
which is where general counsel William Lytton is located.
has lured David Polk, VP of comms. for Raytheon s Integrated
Defense Systems unit, to join the company as VP of media
relations. He is the company s primary spokesperson reporting
to Charles Young, senior VP of marketing and communications.
Gwendolyn Fisher, manager of global product comms. at Merck
& Co., has been named director of media relations at
Tyco, reporting to Polk.
SAUDIS SEND $11.1M QORVIS
Saudi Arabia paid Qorvis Comms. $11.1 million during the
six-month period ended Sept. 30 for drafting/placing op-ed
pieces, creating ads, conducting outreach events, organizing
press conferences and arranging interviews with key media
to position the Kingdom as a vital U.S. ally in the war
Qorvis set up interviews for Prince Bandar, Saudi Ambassador
to the U.S., with media heavyweights. Pro-Saudi events were
held in New Orleans, Los Angeles, Phoenix, Nashville, San
Francisco, Birmingham, Ala., and Columbus, Oh.
The Patton Boggs affiliate received $14.6M for ad/PR during
last year s reporting period.
KIKER MOVES TO CENDANT.
John Kiker, who was executive VP at Edelman PR Worldwide,
has taken a PR post at Cendant Corp. He had joined Edelman
in Sept. `02 from United Airlines, where he was VP-worldwide
Cendant is a provider of travel (Avis, Travelodge) and
real estate (Century 21, Coldwell Banker) services.
Edelman has appointed Russell Dubner to the general manager
slot of the New York-based corporate and PA practice to
Dave Drobis(62) steps
down as Ketchum's chairman on Dec. 31, becoming a
consultant and chairman emeritus at the Omnicom unit. Drobis,
a 36-year veteran of Ketchum, turned over the CEO reins
to Ray Kotcher in 2000.
EPRW PLAYS UP
Edelman PR Worldwide is preparing to launch The Recording
Academy s first major PR campaign to touch on the issue
of illegal downloading. The research-based public education
work involves a website, PSAs, advertising and PR via Edelman
s main unit and its Blue and StrategyOne ad and research
The campaign is slated to roll out with a PSA Feb. 8 during
the Academy s annual Grammy Award telecast. Edelman has
spent the last year conducting research with the Academy
to shape the work. The firm quietly won the work in an RFP
last year and the Academy has kept a lid on the hire since
"We have learned that there is a lot of confusion
about what is legal and not legal, especially among music
lovers in the 12-24 age range," said Brad Jamison,
VP in Edelman s Los Angeles office who heads the account.
Edelman is also handling a major anti-piracy campaign for
the Motion Picture Assn. of America.
WPP ACQUIRES QUINN GILLESPIE.
WPP Group has acquired Quinn Gillespie & Associates,
the three-year-old firm founded by former Clinton White
House Counsel Jack Quinn and Ed Gillespie, Republican spokesman
during the Florida recount who now chairs the GOP national
The British ad/PR conglom says QG&A had revenues of
$12.5M last year and employs 25 staffers in Washington,
D.C. Its blue-chip client roster includes General Electric,
Verizon, Coca-Cola, Diageo, Microsoft, Hewlett-Packard,
IPG RAISING $650M;
BIG 5 DEBT IS $13B.
Interpublic, owner of Golin/Harris, Weber Shandwick and
other PR firms, is selling $650 million in stock to pay
down debt and for other purposes.
IPG debt is $2.52 billion according to SEC filings.
Combined debt of the "Big Five" ad/PR congloms,mostly
as a result of their acquisition activities, is $13.29B.
Omnicom s debt is $2.59B and WPP Group 's is $3.29B, making
the debt of the three biggest $8.4B. continued
on page 2
Edition, Dec. 17, 2003, Page 2
IPG SELLING STOCK (cont'd
from page 1)
Havas has a debt of $1.54B and Publicis, $3.35B (which is
more than its 2002 sales of $3.12B).
The revenues of the five holding companies totaled about
$25B in 2002.
Grey Global Group, owner of GCI Group and APCO, and which
has not been a major acquirer of other firms, has a debt
of $200M. Its revenues in 2002 were $1.20B. Grey is selling
Fitch Ratings, commenting on the new IPG offering, said
the outlook on its credit ratings for IPG "remains
Negative." IPG has made "significant progress
toward improving its balance sheet through extended debt
maturities and lower balances" but there continues
to be "uncertainty regarding the eventual success of
IPG's turnaround," said Fitch.
The rating service said it had not "anticipated the
magnitude of certain cash obligations including the potential
costs related to the Motorsports businesses" that IPG
Fitch has "Stable" ratings for OMC and WPP. The
top rating it gives is "Positive."
IPG's employment has fallen to 43,500 from 62,000 two years
ago (including 4,000 dropped via the sale of NFO Worldwide).
Some of the affected employees were at Weber Shandwick,
which claimed to be the No. 1 PR firm two years ago with
more than $425 million in fees.
IPG this year admitted internally booking $181M in fees
it never collected, causing it to re-write five years of
earnings reports. It has just agreed to pay $115M in cash
and stock to shareholders who claimed they were misled by
An analyst teleconference by Fitch April 2, 2002 said the
"Big Three" were "largely created through
acquisitions" and they continue to pursue policies
they did during the plush years of the late 1990's, causing
"the current weakened credit metrics."
IPG has said it has all but ceased making acquisitions.
It made over 200 of them in recent years.
When IPG purchased Weber in late 1997, IPG CEO Phil Dooner
promised that the holding company would soon have the No.
1 PR firm in the world.
The resulting acquisition binge included the
purchase of Shandwick, itself a collection of 35+ PR firms.
It still had a debt of 47.5M British pounds (about $75M)
when it was purchased by IPG in 1998.
The debt-to-equity ratio of IPG as of Sept. 30 was 1.297,
meaning its debt exceeded its equity.
The debt/equity ratios of the others are Omnicom, 0.83;
Publicis, 2.13; Havas, 1.13, and WPP, 0.49.
Goodwill at OMC rose from $4.8B on Dec. 31, 2002 to $5.58B
as of Sept. 30, 2003, a $731M gain. This means OMC continued
its highly active acquisition program. Payables at OMC as
of Sept. 30 were $6.45B and receivables were $4.0B. OMC
s own balance sheet shows assets are a "negative"
IPG goodwill was $3.4B as of Sept. 30 vs. $3.3B as of Dec.
RENDON BIDS TO REBUILD
The Rendon Group is part of a nine-member consortium that
has made a $98 million bid to rebuild the Iraqi Media Network.
WorldSpace Corp., the Washington, D.C.-based satellite broadcaster,
leads the group.
The Coalition Provisional Authority is awarding the contract
to repair the infrastructure, provide programming and train
workers for Iraq's national TV, radio networks and Al-Sabbah
newspaper. Al-Sabbah is Iraq s largest paper with a daily
circulation of more than 60,000. One of its two printing
presses was bombed during the Iraqi invasion. The contract
also calls for development of an "exit strategy"
to pave the way to the privatization of IMN.
Rendon Group was hired by the Citizens for a Free Kuwait
days following the invasion of that country by Iraq. It
remained active during Operation Desert Shield and Desert
Storm, and its staffers were among the first to enter liberated
Kuwait City. John Rendon s firm promoted the Iraqi National
Congress as a viable alternative to Saddam Hussein following
the Persian Gulf War. The Pentagon hired Rendon in the aftermath
of the 9/11 terror attacks.
TUNA BIZ FISHES FOR
The U.S. Tuna Foundation, the trade group for the billion-dollar
tuna industry, is feeling the brunt of reports that the
U.S. Food and Drug Administration plans to warn children
and women of childbearing age about elevated mercury levels
in seafood, and specifically tuna.
The Aker Partners is the Tuna Foundation s outside PR counsel,
and is advising the group on the mercury issue.
"The Foundation supports the FDA s advisory,"
said Colburn Aker, managing partner of the firm.
However, he feels "the government is great at telling
people what they shouldn t do, but doesn t do a great job
of telling them what they should do."
The Foundation formulates the industry s public response
for its main harvesters and marketers like Starkist, Bumble
Bee and Chicken of the Sea.
"We cover mercury issues with our client in discussions
and strategy, but the main media relations and communications
response comes from the Foundation," said Teresa Siles
of Nuffer, Smith Tucker, which handles PR for Chicken of
the Sea. Fleishman-Hillard works on behalf of Bumble Bee;
Citigate Sard Verbinnen handles media relations for Starkist
s parent, DelMonte Corp.
B-M'S MACKEY JOINS H&K.
Judi Mackey, who stepped down as chair of Burson-Marsteller
s U.S. corporate and financial practice in October, is moving
to sister WPP Group firm, Hill & Knowlton, in a similar
spot on Jan. 5.
Mackey is re-uniting with Steve Aiello, H&K s acting
general manager, who is a veteran of B-M and Cohn &
Wolfe. He is filling in for Marilyn Castaldi who is shifting
to Columbia University.
Edition, Dec. 17, 2003, Page 3
ON FULL DISCLOSURE.
Roger Sergel, managing editor of medical coverage for ABC
News, which is based in Needham, Mass., expects PR pros
to disclose who their client is right at the top when pitching
an "issue" with an "expert."
"I consider press pitches that present an issue,
and an expert without disclosing who you are working for
deceptive and sneaky," said Sergel in an e-mail
that he sent to all of his contacts at 106 PR firms.
"I want all pitches to have the vested interests of
your client on the table, up front," he said. "If
you believe that your client s interests are the public's
interests, prove it. But please do not try to con us with
this old technique of selling the `issue and the `expert
as if there is no vested interest. Usually there is."
Sergel would prefer getting the views of an industry scientist,
rather than some expert who may have undisclosed financial
ties to a company. "Then we have to sort out how deep
those ties are and whether they could create bias. With
the industry scientist, at least I know the bias,"
"There is nothing wrong with pitches on behalf of
industry clients. Drug companies make important contributions
to our health. But there is something wrong with pitches
that do not provide full disclosure of whose interest you
are representing, and who is paying the bill for your time,"
Sergel set up the medical unit in 1996 with a goal of centralizing
the approach to medical news coverage at ABC News.
Today, the unit has broad reach, and considerable resources.
"We work in ways that are unlike any news organizations
PR people deal with," he told this NL.
"We evaluate stories for all ABC News programs, and
write a daily note that is distributed to the key editorial
staff of every ABC News program, plus the medical reporters
and producers at more than 40 ABC-affiliated stations.
Getting connected to the ABC News medical unit can be done
in a variety of ways. At the most basic level, a publicist
s address is entered into Sergel s address book, which automatically
means the publicist will get information about stories in
the works at ABC News, or resource lists being prepared
for ABC News programs.
Sergel said publicists should e-mail news releases to [email protected].
When providing the name of an expert, he said the unit
needs the name; e-mail address, and the specialty areas
you want them placed in. The unit currently has 7,000+ experts
in its system.
Each expert gets an e-mail from Sergel as an introduction.
"Our system is to always copy the PR person in the
institution on every e-mail I send to an expert," said
He is at 175 Highland ave., Needham, MA 02494; 781/455-6016;
fax: 455-6037, [email protected].
EDITORS ASSIGNED BEATS
eWEEK.com has assigned nine editors to cover individual
IT topics. They are:
Storage: David Morgenstern
Desktop and Mobile: Rob Enderle
Security: Larry Seltzer
Linux and Open Source: Steven Vaughn-Nichols
Messaging & Collaboration: Steve Gillmor
Enterprise Applications: John Pallatto
Databases & Business Intelligence Software: Lisa
Developer & Web Services: Peter Coffee
Wireless: Jim Louderback
Macintosh: Matthew Rothenberg
Each editor will write two columns a week.
Louderback, who is editor-in-chief of Ziff Davis Internet,
said the topic experts will provide "a unique focused
mix of news, analysis and insight, to ensure that profitable
technology decisions are made."
The move will allow the current editorial team at eWeek
to provide more news that matters; key technology stories
and scoops throughout the day.
AP PHOTOGS TO GO ON
News photographers for The Associated Press will be available
to go on assignments for members of PR Newswire who want
images to accompany press releases.
Under a new agreement with AP Wide World Photos, PRN will
be able to provide its members with a "valuable tool
they can use to create a photograph that not only complements
a story, but also tells the story," said Helen Dowler,
PRN s director of photography services.
Forbes will publish a list of the 2,000 leading global
companies next spring, replacing its "500s" rankings,
which were based on profits and sales, countering Fortune's
annual April rankings of U.S. industrial companies by sales
and Business Week's "1000" list.
Parents magazine will have an article about gay parents
in the March 2004 issue in its "What's It Really Like"
series which explores "atypical parenthood."
Parents editor-in-chief Sally Lee told min that
the article was planned long before the Nov. 10 Massachusetts
court decision legalizing gay marriage.
CMP CLOSES EBN MAGAZINE.
EBN, which was the first publication started by Manhasset,
N.Y.-based CMP in 71, is shutting down.
The last issue of the weekly, which had focused on procurement
and business management for the electronics industry, is
the Dec. 15 number.
CMP will start a new monthly publication, called Electronics
Supply & Manufacturing; a related e-mail newsletter
and a website in early 2004.
Playgirl has added a "sex news" feature,
which the editors say will let readers know everything including
the findings of the latest sex survey, facts on dating,
and other sex-related information.
Prevention's "new and improved" lookoffers
the latest in health news and trends, food and nutrition,
fitness, beauty, family and alternative medicine. The magazine,
whose editors are based in New York, is published by Rodale
Inc. More information is available at www.prevention.com.
Newsweek is raising its national ad rates. The four
color rate will go up 4.4% to $200,000 for a full page,
and the black & white rate will go up 6.4%, to $131,000
for a full page. New one-time national ad rates take effect
with the Jan. 12 issue.
news continued on next page)
Edition, Dec. 17, 2003, Page 4
SURVEY FINDS RUDE BEHAVIOR
Dressing inappropriately, getting overly intoxicated and
having sex are just a few of the offenses some guests at
events have been spotted doing lately, according to a survey
made by BizBash EventStyle Reporter, a quarterly newspaper
for event planners, which is published by David Adler, a
Chad Kaydo, editor of the paper, said 65% of the 4,320
event pros who responded felt guests are behaving worse
now than five years ago.
Respondents reported seeing guests commit these other infractions:
Take more than one gift bag
Treat event workers poorly
Show up at event when they did not RSVP
Take more than one piece of food from a tray
Talk through a performance
Take decor items without permission
Have loud cell phone conversations at an event
Refuse to leave at the end of a party.
PC WORLD MAINTAINS LEADERSHIP
PC World magazine is the most widely read technology
or business magazine, according to the Fall 2003 Mediamark
Research Inc. survey of American consumers.
It was the sixth consecutive time PC World finished as
the leading publication.
The survey shows the average audience totals were as follows:
PC World5,887,000; PC Magazine5,768,000;
Business Week4,671,000; Forbes4,510,000;
Fortune3,728,000; Computer Shopper2,843,000,
PC World, which is based in San Francisco, is a subsidiary
of IDG in Boston.
ABERCROMBIE & FITCH
Abercrombie & Fitch will stop publishing its erotic
quarterly catalogs, the A&F Quarterly, with the
Christmas issue, according to Thomas Lennox, director of
IR/corporate communications for the New Albany, Oh.-based
"While it has enjoyed success with the Quarterly over
the years, the company believes it is time for new thinking
and looks forward to unveiling an innovative and exciting
campaign in the Spring," he said.
A&F's catalog has attracted widespread negative publicity
for the past five years for showing young male models intimately
engaged with young girl models.
WALL STREET JOURNAL
Robert Bartley, 66, editor emeritus of The Wall Street
Journal, died Dec. 10. He had a nearly 40-year career
at the Journal, including three decades as editorial page
editor and editor.
Peter Kann, chairman/CEO of Dow Jones, said Bartley "clearly
was one of the greatest editors in the long history of this
President George W. Bush had awarded Bartley the Presidential
Medal of Freedom, America s highest civilian honor, a week
before his death.
Kann said Bartley s "free men; free markets"
always will remain the editorial philosophy of the Journal.
LEIBY TO COVER GOSSIP
FOR WASH. POST.
Richard Leiby, who will begin writing "The Reliable
Source" column in The Washington Post next month,
wants the gossip column to be provocative as well as a well-sourced
compendium of interesting items and news that readers cannot
find anywhere else.
Leiby, who currently is an editor and writer in the Post
s "Style" section, is replacing Lloyd Grove, who
is now the gossip columnist for The New York Daily News.
The column stopping running after Grove left the paper
William Armbruster, previously forwarding/air cargo editor
for The Journal of Commerce, was named editor of
Shipping Digest magazine in Newark, N.J.
Anqoinette Crosby, previously a TV correspondent, is joining
"MotorWeek," PBS automotive magazine TV series,
to cover auto trends. She is replacing Jennifer Khasnabis,
who was the show s consumer reporter for more than four
Julia Kagan, previously editorial director at Consumers
Union, has joined Zagat Survey, a New York-based publisher
of restaurant and leisure guidebooks covering 45 cities,
as VP for content.
Tony Velocci, who currently is senior business editor and
Northeast bureau chief of Aviation Week & Space Technology,
was promoted to editor-in-chief and editorial director of
the Aviation Week Group.
Velocci, who takes over on Feb. 1, is succeeding David North,
who will retire after a 27-year career with the McGraw-Hill
CRAIN PULLS PLUG
ON MODERN PHYSICIAN.
The last issue of Modern Physician was published this month.
The magazine will be merged into Modern Healthcare,
which also is published in Chicago by Crain Communications.
MP will appear as a supplement to the weekly MH and continue
to publish electronically through e-mail and the Internet.
Nine staffers will lose their jobs.
MP, which had a circulation of 31,000, was started in 1996
as a spinoff to MH, which began in 1976.
Multichannel News editor Kent Gibbons is taking
direct pitches now that senior editors James Forkan, Karen
Brown and Simon Applebaum have left. Gibbons can be reached
at 646/746-6590, or [email protected].
PRESS RELEASE TIPS.
Daryl Toor, who has worked in PR for more than 20 years,
and is founder of Atlanta-based Attention, offered these
five publicity tips in his weekly LocalTechWire.com column
about marketing and communications:
1. Never pitch"The biggest PR mistake, which
people make when they write press releases, is to write
it like a sales letter. Tell editors in plain English why
their audience will be interested in your story."
2. Make it newsworthy"Examine your story from
all possible angles. Which angle would make a juicy story
that appeals to your targeted audience?"
3. Short and sweet but complete"Write your press
release in less than 10 short paragraphspreferably
under one page. Be sure to include basic information such
as the What, When, Where, Why and How of the subject matter,
and provide full contact information."
4. Mind your language"Avoid technical jargons
and flowery words."
5. Spice it up"Spice up your press release with
an exciting headline that grabs the editors attention. Include
interesting quotes from relevant people to liven up your
press release," he wrote.
Edition, Dec. 17, 2003, Page 7
DIES AT 96.
George Hammond, who
headed Carl Byoir & Associates from 1956-81, died Dec.
4 in his sleep at his home in Mystic, Conn. He was 96 Nov.
who controlled a reported 66% of the stock in Byoir, long
the No. 2 PR firm just in back of Hill & Knowlton, sold
it in 1978 to Foote, Cone & Belding Communications for
$1.58 million in FC&B stock and another $1.58M in stock
if certain profit goals were met.
price turned out to be a fraction of what other PR firms
were later sold for. CB&A was the first big PR firm
to sell to an ad agency.
of PR firms had expressed fears that their independence
might be compromised but FC&B, which shared several
clients with CB&A over a period of 25 years, promised
Hammond complete independence.
one of the biggest firms, sold to Young & Rubicam in
1979 for about $20M; Manning, Selvage & Lee sold to
Benton & Bowles in 1979 for several million dollars,
and H&K sold to the J. Walter Thompson Co. for $28 million
in 1980, which was about equal to its net fee income.
had 293 employees when it was sold and net fees of about
$11 million. It had 270 employees to H&K s 315 in 1968
but H&K grew much faster, reaching 600 employees by
Small List of Blue Chips
PR firm that Hammond helped build in a 46-year career there
was media-oriented and placed a high value on good writing.
New employees had to have at least five years of experience
in a recognized news medium.
firm was noted for having a handful of blue chip clients
such as RCA, Hallmark, Howard Hughes, Honeywell, A&P,
Woolworth and Swift. Upwards of 25 people could be on one
account and a CB&A staffer usually was based at the
hands-on, shirt-sleeve culture of CB&A gradually disappeared
after H&K purchased CB&A with $12M of CB&A s
own money in 1986.
the owner of H&K, had itself been purchased by the WPP
Group in a hostile takeover.
was a mass firing of about 30 staffers in 1983 apparently
to improve the bottom line of FC&B.
had been told in a memo in 1982 that profit-sharing was
the lowest in the firm's history and salaries were running
too high65% of fees in the New York office. The industry
standard was said to be 50-55% of fees.
of those who were fired launched age discrimination suits
against the company that went on for years. The plaintiffs
reportedly received hefty settlements but confidentiality
agreements were signed.
started his career as a sportswriter for nine years at the
former New York Sun. He had won a Pulitzer scholarship to
Columbia University after graduating from Erasmus Hall in
A lifelong golfer, Hammond had a golf hole, including a
green, constructed at his homes in Redding, Conn., and Mystic.
was president of PR Society of America in 1969. His wife,
Jean, died several years ago. Survivors include daughters
Wendy and Craigie, eight grandchildren and 14 great-grandchildren.
LOSES 12 MEMBERS.
The Council of PR Firms, founded in 1998 mostly with funds
from the largest PR operations, added five members in 2003
and lost 12, according to a list of 101 members on its website
Joining the Council were
Behan Communications, Capital Strategies, Stanton Comms.,
and Sunstar Comms. Cohn & Wolfe returned as a member.
Leaving, in alphabetical
order, were Access Comms. (which merged), Cerrell Assocs.,
Connect PR, Donnellon PR, Intermarket Communs., KCSA PR
Worldwide, Metzger Assocs., Phase Two Strategies (which
closed), Ronald Trahan Assocs., Ruder-Finn, Southard Comms.,
FitzGerald Comms., acquired
by Omnicom, was mistakenly listed on the CPRF website as
a 2002 member but it had left earlier. Hawthorn Group, listed
as a 2003 member, resigned in 2001.
CPRF, which started as
the American Assn. of PR Firms, had 126 members in 2000.
Firms pay 0.65% of their
U.S. income as dues to a maximum of $50,000 each. Almost
all of the top ten firms pay this maximum amount.
Founders spent $100,000
in 1998 to have Smith Bucklin & Assocs. survey thousands
of PR firms to see what they wanted in a trade association.
SB&A specializes in creating and managing associations.
Those with less than $1
million in fees that replied were miffed when they found
they would be barred from membership. CPRF reversed this
CPRF reported a 19% decline
in dues to $988,193 for the year ended Dec. 31, 2002. All
but the biggest members were allowed to subtract 20% from
their dues because of the recession.
Barbour Griffith & Rogers picked up a one-year $720K
contract to improve diplomatic, economic and cultural ties
between the U.S. and Ukraine.
Antonov Aircraft Corp., based in Fort Lauderdale, is funding
the pact with the Interpublic subsidiary. It refurbishes
retired commercial airliners in the U.S. for use overseas.
AAC is part of a Ukraine state entity that operates Antonov
Airlines, owner of the world s largest fleet of "outsize
AA was hired by the German
and Italian militaries to airlift cargo into Kabul, Afghanistan.
The company this year began carrying military supplies for
the British into Basra, Iraq, and should see more U.S. contracts
comings its way as the Ukraine has made the grade on Deputy
Secretary of Defense Paul Wolfowitz list of "countries
eligible to compete for contracts funded with U.S. appropriated
funds for Iraq reconstruction."
Edition, Dec. 17, 2003, Page 8
stories that are connected broke last week the death
of George Hammond, formerly of Carl Byoir & Assocs.,
and Interpublic s bid to sell $650 million in stock to help
Longterm debt of the "Big
Five" holding companies that bought out much of the
PR counseling business, starting with Byoir, is now a hefty
This year is the 25th
anniversary of Byoir s sale to Foote, Cone & Belding
and time for a look at what this has meant to PR.
Hammond had gained control
of Byoir and made the decision himself. Fellow executives
His close friend, Robert
Carney, former chairman of FC&B, had become a director
of Byoir. Carney promised the firm total independence.
Hammond didn t realize
it, but he had signed the death warrant of the firm, whose
culture prized good writing and relationships with the press.
New hires had to have five years at a major news medium
and had to take an extensive writing test.
Asked why CB&A sank after its purchase by FC&B,
a former Byoir executive told us: "FC&B didn't
understand the PR business." The collaborative, almost
"family" working atmosphere of Byoir meant no
one was ever "fired." On occasion, one or two
staffers, on request, might depart at a leisurely pace.
FC&B, which saw profits
plummet 8.9% in 1982, engineered "Bloody Friday"
at Byoir on March 18, 1983. Nine execs were summarily canned,
two quit and a half dozen or so support staff were fired.
Several vets sued on grounds
of age discrimination and won although the legal battle
lasted years. This brouhaha drained Byoir financially and
If FC&B didn t understand Byoir, neither did Byoir understand
FC&B. "Byoir never worried about being profitable,"
said former Byoir executives. Clients got unlimited access
to the top seven execs for $50,000 a year. Profits came
out of this. Staff and expenses were billed at cost. Byoir,
which stationed its people at major clients, unwittingly
became an unpaid executive recruiter for the client.
The next blow was the
sale of the firm to Hill & Knowlton in 1986.
H&K s parent, JWT Group, was acquired by the WPP Group
in 1987 in a hostile takeover. WPP s Martin Sorrell told
50 worried H&K staffers on June 26, the day of the buyout,
that he would not change the management, culture or generous
benefit plan of H&K.
But changes did take place
including the sacking of H&K CEO Robert Dilenschneider
in 1991. H&K, which used to publicly reveal 300+ clients,
stopped identifying clients at all, among many other changes.
The Byoir agency did not
fare well at H&K, whose culture was more formal and
oriented to counseling as opposed to providing written press
By 1996, only three New
York Byoir staffers out of the original 175 in 1986 were
still at H&KLee Silberman, Jack Griffin, and secretary
The related story,
IPG s quest for $650M, puts the spotlight on the
"Big Five s" $13.29 billion overall longterm debt.
Where has the $13.29B
gone, one might ask? Mostly into the pockets of ad agency
and PR firm owners who sold out for extravagant sums and
into the pockets of the execs of the congloms. John Dooner,
for instance, although he presided over the worst year in
the history of Interpublic, got paid $6.8M in 2002 and received
a retirement package worth up to $32.7M over a 15-year period.
Hammond, after selling
Byoir, called up the head of another big PR firm and said,
"Jean (his wife), Wendy and Craigie (their daughters)
will never have to worry." No doubt Hammond also thought
he was doing a good thing for CB&A. But the personal
motives of these deal makers cannot be ignored.
Having purchased most
of the major PR firms, the congloms in 1998 set out
to control the rankings of firms by wresting them from this
NL, PR Week and The Holmes Report, which had
been doing them.
They set up the Council
of PR Firms (story on page 7). Ranking PR firms became CPRF's
most visible activity. Participating firms were not required
to provide any proofs of their numbers nor even identify
clients. CPRF allowed ad commissions. But the rankings developed
a big hole in 2002 when the congloms, the initiator of the
rankings, stopped letting their own 40+ PR firms report
any figures because of possible liability under the Sarbanes-Oxley
Lest we paint too rosy
a picture of Byoir, it had its darker moments. The
firm, using the German Tourist Bureau as a blind, signed
an 18-month contract with the Hitler government for the
huge sum of $6,000 a month starting Nov. 1, 1933. This was
long after Hitler s anti-Semitic bent was evident. Rallies
were being held in Madison Square Garden demanding a boycott
of German goods.
Carl Byoir argued against
the boycott, saying it would create ill will against the
German people who would soon dispense with Hitler. He called
Hitler and other dictators "but temporary and puny
obstructions." Ivy Lee also worked at $25K a year for
Hitler, using the German Dye Trust as a blind. Both firms
were outed and excoriated in Congress. The Foreign Agents
Registration Act was then passed in 1938. Byoir in the 1950
s created false fronts (farmer groups, etc.) to oppose an
increase in loads trucks could carry. The hidden client
was the railroads. Byoir and the railroads were found guilty
of an illegal conspiracy in 1957 but the Supreme Court overturned
it in 1961.