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Internet Edition, Dec. 17, 2003, Page 1

Tyco International, which is trying to rebound from its corrupt past, has hired Hill & Knowlton for media relations and PA support for military issues.

Gene 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.

Tyco 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.

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 against terrorism.

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.

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 comms.

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 succeed Kiker.

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.


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 operations.

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 then.

"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 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 committee.

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, and PricewaterhouseCoopers.


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

Internet 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 APCO.

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 had purchased.

Fitch has "Stable" ratings for OMC and WPP. The top rating it gives is "Positive."

Employment Down

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 false statements.

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.

Debt/Equity Ratios Provided

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" $2.55B.

IPG goodwill was $3.4B as of Sept. 30 vs. $3.3B as of Dec. 31, 2002.


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.

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.

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.

Internet Edition, Dec. 17, 2003, Page 3


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."

Who is Paying?

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," said Sergel.

"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," he said.

How Unit Operates

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 Sergel.

He is at 175 Highland ave., Needham, MA 02494; 781/455-6016; fax: 455-6037, [email protected].

AT EWEEK. 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 Vaas
—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.


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.


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

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.

(Media news continued on next page)

Internet Edition, Dec. 17, 2003, Page 4


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 PR pro.

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 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 World—5,887,000; PC Magazine—5,768,000; Business Week—4,671,000; Forbes—4,510,000; Fortune—3,728,000; Computer Shopper—2,843,000, and Inc.—1,283,000.
PC World, which is based in San Francisco, is a subsidiary of IDG in Boston.


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 retail chain.

"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.


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 company."

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.


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 in July.

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 years.

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 Cos.


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].


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 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 paragraphs—preferably 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.

Internet Edition, Dec. 17, 2003, Page 7

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. 29.

Hammond, 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.

The 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.

Owners 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.

Burson-Marsteller, 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.

Byoir 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 1978.

Had Small List of Blue Chips

The 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.

The 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 client.

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.

JWT, the owner of H&K, had itself been purchased by the WPP Group in a hostile takeover.

There was a mass firing of about 30 staffers in 1983 apparently to improve the bottom line of FC&B.

Employees had been told in a memo in 1982 that profit-sharing was the lowest in the firm's history and salaries were running too high–65% of fees in the New York office. The industry standard was said to be 50-55% of fees.

Several 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 as Newsman

Hammond 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 Brooklyn.
A lifelong golfer, Hammond had a golf hole, including a green, constructed at his homes in Redding, Conn., and Mystic.

Hammond 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.


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., and Strat@comm.

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 policy.

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 cargo planes."

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."

Internet Edition, Dec. 17, 2003, Page 8



Two 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 repay debt.

Longterm debt of the "Big Five" holding companies that bought out much of the PR counseling business, starting with Byoir, is now a hefty $13.29 billion.

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 felt betrayed.

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 emotionally.
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 materials.

By 1996, only three New York Byoir staffers out of the original 175 in 1986 were still at H&K–Lee Silberman, Jack Griffin, and secretary Pearl Lester.

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 Act.

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.

--Jack O'Dwyer


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