CONN. HEARS PITCHES.
The State of Connecticut has issued an RFP to consolidate its 30 outside advertising and PR firms to "as few vendors as possible" for its $9 million in contracts.

Forty percent of that budget is tourism work and total PR spending is believed to be in the mid-to-high six-figure range.

The Constitution State's Dept. of Administrative Services is seeking proposals through March 29 and said it expects the volume of ad and PR expenditures to remain constant. The department warns that pricing, quality and service levels obtained through the current RFP are expected to be "more aggressive" than any single agency may currently have with a firm. It will use the proposals for a continuing short list selection, negotiations and final vendor selections for projects as they arise.

The state also has reserved the right to cancel current contracts if it "serves the best interests of the state."

McLaughlin, DelVecchio & Casey and Lou Hammond Assocs. are the state's main tourism PR firms.

The RFP is part of a state-wide spending management program called "Buy Smart... Buy Together," which aims to use the state's $2.6 billion in buying power to get better deals from vendors.

The contract award stage is expected to take place in late April or early May. Contract(s) run three years with options for extension.

PR GETS $2M JOB FROM SPAIN.
Spain has signed Piper Rudnick to a $2 million contract to handle a broad range of political and economic issues. The firm is to receive $100K a-month under the 20-month agreement. PR is to advise Spain in matters pertaining to public diplomacy, "strategic communications" with the media, Embassy event programming and how to improve ties with the White House, State Dept. and Congress.

Spain, a member of President Bush's "coalition of the willing," has provided troops to oversee the occupation of Iraq, and is eager to get its share of reconstruction projects. Prime Minister Jose Maria Aznar, leading up to the invasion of Iraq, providing key diplomatic support to the Administration.

PR partner Lloyd Hand, who was a close counselor to President Lyndon Johnson, and then senior VP at TRW for a dozen years, is in charge of the Spanish business. He reports to Spain's Ambassador to the U.S., Javier Ruperez, and deputy chief of mission, Felix Valdes.

IPG LOSES $102M IN Q4.
Interpublic suffered a $102.5 million fourth-quarter net loss as CEO David Bell continues his restructuring program at the ad/PR combine.

Revenues were up 5.7 percent to $1.6 billion.
Bell reports the "first phase of our turnaround will soon be behind us," though "there remains much work ahead of us."

Bell, who has put a priority on boosting organic revenue, reports that business from existing clients slipped 1.1 percent during the quarter. That's an improvement from the declines of 3.1 percent, 4.5 percent and 6.0 percent slippage for the earlier three quarters, respectively. Organic growth for the full-year dipped 3.6 percent.

IPG posted a $451.7 loss for `03, compared to a $99.5 million year ago profit. Revenues inched ahead by 2.2 percent to $5.9 billion.

SEGWAY TAPS HICE.
Segway, the Manchester, N.H., maker of the two-wheeled human transporter, has tapped Joseph Hice, a former Harley-Davidson PR exec, as its first chief marketing officer.

Hice was director of corporate communications for the motorcycle company before leaving last summer to become VP of marine and recreation accounts at Russell & Herder. He earlier headed marketing communications for Bombardier.

[Segway hired former Bombardier exec Gary Pietruszewski last month to head sales and customer support.]

The company has been lobbying governments and resorts for two years on behalf of the transporter, which launched in 2001 with much fanfare aided by Burson-Marsteller. The devices began selling to consumers last year but some reports have questioned whether the company has lived up to its buzz. A recall of 6,000 units in October 2003 was widely covered. Business Week last year asked "Is Segway Going Anywhere?"noting three senior marketing execs left the company in the last few years. Tobe Cohen (Procter & Gamble veteran), and Gary Bridge (earlier with IBM), are among those departed execs.

GRUBBS CHECKS IN
AT CITIGROUP.
Wendy Grubbs has joined Citigroup as VP-federal government affairs. She left the White House in February, where she worked in its legislative affairs office.

Grubbs also served as an aide to former Florida Senator Connie Mack, and deputy chief of staff to Labor Secretary Elaine Chao.

Grubbs will work in Citigroup's global investment bank unit, and brief its bankers on how developments in the Washington, D.C., political scene will impact their business.

W-C FIGHTS GAY MARRIAGE AMENDMENT
Witeck-Combs Communications is helping the Log Cabin Republicans, a band of GOP members who support gay rights, with a wide-reaching PR and ad campaign to fight their own party on a constitutional amendment which would ban gay marriage.

President Bush caused a furor in the gay community when he said last month that the White House would support a federal amendment defining marriage as a union between a man and a woman.

Mark Mead, communications director for the group, told this website W-C was brought in to bolster their two-man press operation and take the campaign national. "They've helped us get attention in national outlets and the response has been through the roof," he said, adding W-C got the nod based on a friendship with the D.C.-based firm's president Wes Combs over the years.

The Log Cabiners kicked off a $1 million ad campaign – the first ad blitz in the group's 27-years – March 11 across the Washington, D.C., area and several swing states like Ohio, Florida and Wisconsin. The overall campaign begins today with lobbying and PR efforts in D.C., along with grassroots work and the revamp of the group's website, logcabin.org.

Colleen Dermody, VP at W-C, said her firm has specialized in gay and lesbian issues and marketing in the past, advising companies like IBM and Ford on issues related to that group. She noted that W-C has generally been associated with left-of-center groups in the past and the current work for the Log Cabiners is its first for that group.

Party of Lincoln or Buchanan?

Blasting a segment of the GOP as the "radical right," the group's executive director, Patrick Guerriero, said the campaign is meant to highlight the "exclusion and discrimination" in the amendment, facts which he says violate the principles of the Republican Party.

"As Republicans, it is our obligation to stand up and speak out when our party is headed in the wrong direction," Guerriero said. "The Republican Party has a choice. Be the party of Lincoln, Reagan, Schwarzenegger and Guiliani, or be the party of Bauer, Falwell, Robertson, and Buchanan."

The Log Cabin ad opens with Vice President Dick Cheney – who's daughter is openly gay – outlining his position on same-sex relationships during a 2000 debate with Sen. Joe Lieberman. Cheney said then states should make decisions on unions, not the federal government. Images of the civil rights movement are superimposed over the vice president. He now supports the President's position.

SMITH TACKLES TECH AT LNS
Cameron Smith has been named managing director of LNS Communications' technology practice. He was partner at G2PR, advising tech companies NSI Software, EqualLogic, Vocal Tec and SavaJe.

Smith left that boutique shop because he was interested in tapping into LNS' global reach and public affairs capabilities it has as a unit of Chime PLC, the U.K's biggest independent PR firm.
He also worked at Bridgeman Communications (Texas Instruments and Cabletron) and Mullen (S&H Greenpoints and Hifi.com).

Rich Nagle is CEO of Cambridge, Mass.-based LNS.

INFOTECH SPEAKS UP
FOR ‘OFFSHORING'.
Washington, D.C.-based Infotech Strategies is promoting the benefits of "offshoring" high-tech jobs on behalf of the Computer Systems Policy Project. CSPP is the high-powered coalition of eight CEOs from leading technology companies.

The roster includes Sam Palmisano (IBM), Carly Fiorina (Hewlett-Packard), Edward Zander (Motorola), Craig Barrett (Intel), Michael Dell (Dell Computer), Joe Tucci (EMC), Mark Hurd (NCR) and Larry Weinbach (Unisys).

CSPP maintains that the U.S. high-tech sector must improve competitiveness by shipping jobs to lower-waged countries like India and China, and concentrate on research and development here.

The group spelled out its philosophy in a report, "Choose to Compete: How Innovation, Investment, and Productivity Can Grow U.S. Jobs and Ensure American Competitiveness in the 21st Century," that was released in January.

Members of CSPP, such as Fiorina, have been criticized for showing a lack of sensitivity to the outsourcing issue. She was roasted for her remark, "There is no job that is America's God-given right anymore." Sacramento Bee writer Rich Heintz mused if that "Marie Antoinette-approved remark makes me wonder if H-P hasn't already offshored its public relations department."

IS was founded in `96 to provide "vision and voice in the digital world." Its chairman Ken Kay is former executive director of CSPP. Tamika Spaulding heads the CSPP account.

HYRE JOINS DIX & EATON.
John Hyre, who handled the great "Oscar" heist crisis, has joined Dix & Eaton as VP. The 16-year veteran of $3 billion (revenues) Roadway Corp. dealt with the media firestorm connected with the theft of 55 Academy Award "Oscars" that were stolen in `00 from Roadway's loading dock in Los Angeles.

Fifty-two of the purloined statuettes were discovered next to a dumpster in L.A.'s Korea Town nine days later. The ongoing probe into the whereabouts of the three remaining pilfered Oscars received a boost in June as the FBI discovered one of the looted Oscars in Miami during a drug bust.

Hyre served as investor relations director at Roadway, which was recently acquired by Yellow Corp. Roadway is a D&E client, which supported Hyre during the Oscar robbery story.

HALLIBURTON OWES
FOR BUSH'S PHOTO-OP
Halliburton, which according to its just-released 10-K report has earned $85 million on $3.6 billion in Iraqi work last year, has not yet paid the subcontractor that prepared the Thanksgiving Day photo-op of President George Bush serving the troops dinner in Baghdad International Airport.

The President addressed the troops, and then ladled out mashed potatoes for about ten minutes before heading off to meetings with members of Iraq''s Governing Council and military commanders.

Salt Lake City-based Event Source has been dishing out 100,000 meals a day under a contract with Halliburton. CEO Phil Morrell told NBC News that Halliburton owes his company $87 million. He says ES hasn''t been paid since November and the financial shortfall is starting to hurt. The company has laid off workers, and soon will feed sandwiches rather than hot meals to the soldiers as an economy move.

Halliburton, which has been accused of overcharging the government on Iraq work, does not dispute ES'' bill. It currently is auditing its dining facilities, and plans to pay its subcontractor as soon as possible.
Wendy Hall of Halliburton, has told O''Dwyer''s that she cannot comment on PR firms used by Dick Cheney''s former company because of "competitive" reasons. Hall did say that Halliburton "from time to time" hires outside PR firms for specific projects.

REUTERS IS `OFFSHORING' REPORTERS.
Reuters is hiring six reporters in Bangalore, India, to cover financial news of small- and mid-cap U.S. companies using press releases transmitted by the news release services.

"Basically, what we re doing is offshoring," David Schlesinger, Reuters global managing editor, who is based in New York, told Business Week online. "We re simply experimenting with doing reporting from a different location."

It is "certainly not outsourcing, which is giving work to another company," said Schlesinger, who also pointed out the reporters are employees, and must adhere to Reuters standards. "It's simply moving the work," he told BW.

He said the journalists in Bangalore will cover the basic earnings announcements of U.S. companies by watching PR Newswire and Business Wire for announcements of small- and mid-cap companies that "we re currently not even covering on a regular basis."

The program could be expanded to other locations if it goes well, said Schlesinger, who sees it as a way to free up reporters in New York and London, and other financial centers, to do more "value-added reporting," of larger companies, which entails interviews, attending analyst meetings, and visiting companies.

"I think the wire monitoring you can do anywhere. But for value-added reporting, you need to be able to go to the meetings, visit the company, have the relationship with the anyalyst and the company officials," he said.

Schlesinger said there will be a "signifcant difference" between the salary of the new Bangalore reporter and an entry-level reporter in New York, who can earn about $58,000 a year.

BLUMENTHAL HEADS
SALON'S D.C. BUREAU.
Salon.com, the San Francisco-based website, is opening a new bureau, in Washington, D.C.
It will be run by Sidney Blumenthal, a veteran political journalist, who was a senior advisor to former President Clinton.

Blumenthal also will be a daily contributor on Air America, the new left-leaning progressive radio network, which will feature Salon's leading story each day.

David Talbot, who is editor, said Salon has 74,000 subscribers.

N.Y. TIMES PICKS
BOOK REVIEW EDITOR.
Sam Tanenhaus, currently a contributing editor at Vanity Fair, was named editor of the "Book Review" section at The New York Times. He takes over on April 1, replacing Chip McGrath.

Tanenhaus, who was until April 1999 an editor on the op-ed page at the Times, has written several books, including the 1997 biography of Whittaker Chambers. His current work in progress is a biography of William Buckley Jr., which he is setting aside to run the book review.

Bill Keller, executive editor, said Tanenhaus is an "avid reader and incisive critic of serious fiction. To anyone who might have fallen for the notion that we were looking to dumb down this precious franchise: take that!"

Alex Ward, editor of special sections at The Times, was named editorial director, book development, succeeding Susan Chira, who was named foreign editor.

SCHWARZENEGGER IS EXEC. EDITOR OF FLEX.
California Gov. Arnold Schwarzenegger is now also the executive editor of Muscle & Fitness and Flex magazines.

Both magazines are published by American Media, Inc. in Boca Raton, Fla., which also owns The National Enquirer and other celebrity papers.
Schwarzenegger, who refused to accept a salary as governor, will get paid as editor and AMI also will donate $250,000 a year to his Council on Physical Fitness.

David Pecker, AMI president, said Schwarzenegger will have little day-to-day control over content.

PEOPLE
Harry McCracken, editor of PC World magazine, was promoted to VP/editor-in-chief.

Lisa Tant was promoted to editor-in-chief of Flare, a 25-year-old Toronto-based women's fashion magazine that circulates in Canada.

Tant succeeds Suzanne Boyd, who recently joined the publisher of Essence magazine in New York as editor of a fashion and beauty magazine aimed at young African-American women, which is scheduled to publish its first issue this fall.

Tom Slocca, previously a senior editor at Washington City Paper, is joining The New York Observer to write the "Off The Record" column.

Kate Lawler, previously articles editor, was promoted to executive editor of Parents magazine in New York. She also will continue as editor-in-chief of Parents Expecting.

Lauren Tabach-Bach, formerly associate features editor at Vanity Fair, was named west coast editor of Teen People magazine.

Jim Turley was named editor-in-chief of CMP Media's Embedded Systems Programming, a technical magazine for engineers involved in designing processor-based electronic systems. Turley will work out of his home office in Pacific Grove, Calif., at 831/375-8086 or e-mail at [email protected].

Wen Stephenson, 35, who was managing editor of the web edition of the WGBH-TV's documentary series "Frontline," joined The Boston Globe as deputy editor of the "Ideas" section.

Edward Baker was promoted to editor-in-chief of CIO Insight magazine, and Brad Wieners was named to succeed him as executive editor.

PLACEMENT TIPS
AgeWise is the title of a new quarterly magazine that will target residents of Michigan 60 years and older.

Kristine Kletke, a former community relations director for a retirement community in East Lansing, who is publisher, said the first issue will be published this August, and sent free to 20,000 people.
Barbara White, editor, is soliciting articles and stories for future issues from Michigan writers.
White can be pitched at [email protected] or by phone at 517/881-4018. AgeWise is located at 5460 Curtice, Mason, MI 48854.

Swirl Wine News, a bimonthly, 16-page newsletter, which just published its first anniversary issue, is adding four pages in late 2004 to accomodate more features, according to Tom Wszalek, who started the Los Angeles-based publication.
The newsletter, which is targeted at wine lovers, recommends 75-100 different wines, in addition to wine accessories, restaurants, books, and events in each issue.

Wszalek can be reached at 818/788-7686.

(Media news continued on next page)

AUTO PR DEPTS. GOOBLE UP
BEAT WRITERS.
Keith Bradsher, former Detroit bureau chief of The New York Times, who now heads the paper's Hong Kong bureau, is not surprised by the number of reporters who are hired as auto publicists.

Bradsher, who wrote a book about SUVs called "High and Mighty," said it is hard for news organizations to hold on to people against the considerably larger salaries, and much better benefits that the auto industry offers.

He said The Associated Press has lost five out of its last seven auto writers to working for the PR arms of the automakers.

"The strange result is that you go to a press conference one week, and you're standing next to somebody who's asking questions, and the next week they're standing next to the executive receiving the questions," he said in an interview with the host of "On the Media," which airs on NPR stations.

Since many publications are dependent on automobile ads, it does have "a chilling effect on coverage," but it varies by the news organization, he said.

The auto industry definitely places ads in media outlets that they perceive as providing a friendly or conducive environment for their products, he said.

AUTHOR OF ANTI-SUV BOOK
RAPS EDITOR.
Adam Penenberg, the author of "Tragic Indifference: One Man's Battle with the Auto Industry Over the Dangers of SUVs," claims an article about him was pulled by an editor at Fast Company out of fear of alienating auto advertisers.

John Byrne, editor-in-chief of FC, said Penenberg's charge was untrue, and accused him of trying to get publicity for his new book, which recalls when Ford Explorers equipped with Firestone tires were involved in a growing number of fatal rollover accidents.

MEDIA BRIEFS
WDSI, a Fox TV station in Chattanooga, Tenn., is shutting down its news department. The station will continue to televise local news during its 10 p.m. time slot, but it will originate from WTVC, the local ABC affiliate.

Rupert Murdoch is consolidating operations of his two New York-area TV stations, with plans to move most operations of WWOR (Ch. 9) from Secaucus, N.J., to the Fox Channel 5's studios on East 67th street in Manhattan.

American Style, a magazine for craft enthusiasts and collectors, is going bimonthly after 10 years as a quarterly.

The April 2004 edition, the first in the new publication cycle, went on newsstands Feb. 24.
Hope Daniels, who is editor-in-chief, said the magazine will undergo a number of editorial changes over the coming year, including an expanded "Arts Travel" department.

The magazine, which has a circulation of 60,000, was started by The Rosen Group, a Baltimore-based company, in 1995.

Pearson, which owns The Financial Times, said the "outlook for our business newspapers remains uncertain" due to the decline in advertising.

The London-based publisher said ad revenues at the FT, which had an operating loss in 2003, fell by 4% in the first two months of the year.

Tribeza magazine in Austin, Tex., celebrated its third birthday on March 6 with an issue of more than 100 pages and nearly 100 advertisers.

The magazine was started by Zarhun Dean, 32, who was born in Afghanistan and immigrated to the U.S. when he was eight years old after his father, a pilot of the Afghani airline, fled the country during the Russian occupation.

The magazine covers everything from art, architecture, beauty, community, cuisine, entertainment, and fashion.

Dean, who is editor, is in the process of hiring a managing editor, according to Michelle DeCrane, VP/marketing.

Dean can be pitched at 512/474-4711.

Bob Schieffer, who hosts "Face the Nation" every Sunday on CBS, said a good interview is when the person being interviewed "makes some news, when he says something that he hasn't said before."

Equally important, is when that person gives a good explanation of what it is he stands for or what it is he has taken a certain position on, Schieffer told the Poynter Institute.

His favorite follow-up questions are: "What do you mean by that?" and "Well, give me some examples."

Discovery Home & Leisure Channel in Silver Spring, Md., will undergo a transformation when it debuts as Discovery Home Channel on March 29.

Programming categories on DHC will include decorating, landscaping, entertaining, home improvement and how-to subjects of particular appeal to women.

David Karp, SVP/general manager, oversees the programming.

Media Industry Newsletter started a new monthly report on advertising.

Ann Cooper, former creative editor at Adweek and founder of Advertising Age's Creativity Magazine, was named editor of the Advertising Report, published by Potomac, Md.-based PBI Media.

The Ad Report will consist of ad statistics, interviews with leading ad agency executives, media planners and corporate marketers and will cover the brands and people on the radar and under the radar.

Cooper can be reached at acooper@pbimedia. com, or 212/621-4833.

Omnicom and Interpublic have now followed WPP Group in reporting the misleading statistic called "net debt," which is long-term debt minus current cash and short-term investments.

It's an illogical number, and non-GAAP as IPG admits, because long-term debt and short-term cash should not be mixed, analysts tell us.

OMC, IPG, WPP, Publicis and Havas are laboring under crushing debt and want to downplay its importance. Debt totaled $13.2 billion at the end of the third quarter of 2003, according to their balance sheets.

But their real debt, counting payouts owed to purchased agencies, long-term leases, and adjusting for movements of client funds through them on the way to media, is two to three times higher than the figures reported on their balance sheets, financial experts say.

WSJ Uses Misleading Figure

We wouldn't mind the bogus "net debt" calculation if all reporters were financial experts or had expert financial advice.

But even the Wall Street Journal got snookered by the "net debt" game of IPG March 10.

"Media & Marketing" reporter Brian Steinberg had a boxed headline on an IPG story that said: "Debt of $500 million is down $1.2 billion from the end of 2002."

Nowhere in the story does it point out that this is IPG's "net debt" dream.

The company's total debt actually went from $2.63 billion at the end of 2002 to $2.47B at the end of 2003. That is on page six of the press release.

On page two is the statement that as of Dec. 31, 2003, "net debt stood at $469M, down from $1.7B" at the end of 2002. That's as far as the WSJ read.

IPG says its cash was $2B at the end of 2003 vs. $933M a year earlier. But IPG, as usual, gave no balance sheet with its earnings report. Maybe IPG has the $2B cash simply because it is not paying its bills.

The balance sheet will be filed with the SEC on March 15, the last possible day (75 days after the close of the quarter), and too late for this NL's deadline. OMC also files at the last minute.

Not providing a balance sheet with earnings is a practice condemned by NIRI and analysts.

IPG is a bear when it thinks the WSJ has made a mistake. It twice publicly charged the WSJ with being inaccurate in 1999-2000. The stories related to the restructuring of Lowe Lintas and the purchase of a unit of Caribiner. We wonder if IPG will insist on a correction of this mistake...

IPG, OMC and WPP have run up a large credibility debt by refusing to face the press in press conferences for many years. Analysts are blocked from face-to-face meetings by the practice of teleconferences...

WPP, in its 31-page 2003 financial report of blinding complexity, refers to "average net debt," a rolling figure that changes all the time based on influx of client money. Ad agencies generate huge amounts of funds they re supposed to pass on quickly to the media. There can be large swings in year-end cash and therefore, the size of "net debt," analysts point out. The opening page of the WPP report makes no mention of debt, which at $3.21 billion (says Yahoo), is the biggest of the Big Three. Instead, we get "headline operating profits," "headline profit," and "profit before tax" along with the "reported diluted earnings per share up 136%"...

The WPP (and IPG and OMC) reports are one long argument to see things "their way." Lehman Brothers (8/28/02 NL) rapped WPP on a half dozen counts, saying it disagrees with the way WPP figures its debt, earnings, return on capital, and free cash flow (FCF should have been "zero" in 2001 and not the 504 million pounds claimed.) WPP spends 150-200 million pounds yearly on share buybacks that are used to pay staff, meaning this should be a staff cost, not a buyback, says Lehman...the complexity dodge is a favorite tool of the big CPA firms. The "intricate" tax-dodging (legal) and tax-evading (illegal) schemes of KPMG, Ernst & Young and PricewaterhouseCoopers are under investigation by the IRS, said a front page Feb. 25 Wall Street Journal story. The schemes, "close to the murky line separating permissible from fraudulent tax shelters," were produced in "high volumes" and "marketed with techniques usually associated with credit cards," said the WSJ...

Newsweek's Allan Sloan had the best take on the Martha Stewart conviction. If you re pulled over by a cop who says you were doing 70 and you answered you were doing 50, you could go to jail if someone in the car says you told them you were doing 70. You have lied and "obstructed justice" even though the incident was of little consequence. No adult would get off if the feds went after them the way they went after Stewart, Sloan says. Stewart, the victim of poor legal advice, spoke too much at the beginning and not enough at the end (when she should have taken the stand in her own defense). We hope this case will not be cited as a reason to avoid speaking out in public. Subjects have to know when to talk and when to be silent...

The 20 PR units of advertising agencies ranked by O'Dwyer's show that ad agency units can supply client lists, payroll totals and employment figures if they want to. Appearing on ranking tables is one of the best ways ad agency PR units can market themselves. The nearly 50 PR units owned by the ad conglomerates, in following orders not to release any statistics, have abandoned a major marketing tool.

--Jack O'Dwyer