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Internet Edition, Aug. 11, 2004, Page 1

Burger King, which bid adieu to its CEO last month amid a plan to reverse the company's fortunes, has tapped a corporate turnaround exec to head its PR unit in a bid to overcome what Business Week sees as "a dull menu, dirty stores, and debt-laden franchises."

BK has brought in Steven DeSutter as SVP of corporate comms. of the Miami-based company.

A spokesman from BK's PR firm, Coltrin & Assocs. (the firm was hired last year), said DeSutter takes over for VP Rob Doughty, who has left.

DeSutter was SVP of TurnWorks, an equity and advisory firm focused on righting corporate ships headed by BK's newly minted CEO Greg Brenneman. DeSutter left that post in 2002 to head corporate comms. at PricewaterhouseCoopers Consulting during its restructuring. PwC was headed by Brenneman — who also had a key hand in Continental Airlines turnaround in the 1990s — at the time.

As BW pointed out in a July 7 piece before Brenneman's appointment in mid-July titled "Burger King's Whopper-sized Woes," Bradley Blum was the company's ninth CEO in 15 years.


Bill Ehrlich, EVP in charge of PR and internal comms. at Washington Mutual, is taking a sabbatical from the company, a spokeswoman confirmed.

Ehrlich, who joined the Seattle-based company in 1990, hands over his duties to Adrian Rodriguez, manager of corporate PR. Tara Williams, a WM spokeswoman, told this NL Ehrlich is scheduled to return in April.

The departure comes as WM in July slashed its earnings forecast for the year and said it will shutter its 53 commercial banking operations by the end of October. It announced layoffs totaling 3,700 employees.

The Wall Street Journal pointed out July 30 that the closures come as Washington Mutual's "core mortgage business is in trouble" because of rising interest rates and a cooling of the refinancing boom. The paper notes restructuring moves reinvigorated speculation that the company may be an acquisition target.

Robert Argento has been named national media director at Euro RSCG Magnet. He had consulted on the Evian business at the PR firm owned by France's Havas, the No. 6 ad/PR combine.


Interpublic trimmed its second-quarter loss to $5.4 million from $13.5 million, and recorded its first-quarter of organic growth (0.3 percent) since '01. Overall revenues jumped three percent to $1.5 billion.

CEO David Bell said he is pleased with IPG's "progress in closing the growth gap with the competition." He called the ad/PR combine's restructuring program "essentially complete."

Bell said IPG's PR units, which include Weber Shandwick, GolinHarris and MWW Group, posted "strong top line domestic results."

IPG picked up new business from Dell Computer, Old Navy, Pfizer's Viagra and Sony PlayStation during the quarter. Its significant losses were Circuit City, Pier One, HSBC and John Deere.

The company's head count shrunk to 43,900.
Wall Street sent IPG stock price to a 52-week low on Aug. 6 ($11.73) as its shares were downgraded by CIBC World Markets from "sector outperform" to "sector perform."


Cheryl Procter-Rogers of HBO, Rosemont, Ill., was nominated for president-elect of PRSA over Maria Russell, treasurer. Jeff Jullin reportedly was picked for secretary over Tom Vitelli. Art Stevens of New York was not nominated by the board.

49 NEW APRs.

The 31-year rule of PRSA by its accredited members is again under attack.

PRSA/Cleveland has proposed letting any board member of a chapter, section or district serve in the Assembly. The bylaw change has the backing of PRSA president Del Galloway and the national board.

Expressing support for the change are presidents of four of the five biggest chapters–National Capital, Georgia, New York and Chicago. Colorado, seventh biggest chapter, is "disappointed" that the subject has been brought up again after last year's battle in which "decoupling" lost by only five votes.

Meanwhile, the Universal Accreditation Board, made up of representatives of PRSA and nine other groups, reported that 49 of 68 candidates (72%) had passed the new accrditation process in its first year ending June 30. Forty-one are PRSA members.

In calendar 2002, 274 of 488 candidates passed.
(Continued on page 7)

Internet Edition, Aug. 11, 2004, Page 2

Fleishman-Hillard is taking a media hit for its failed campaign on behalf on Enterprise Rent-A-Car to defeat a $4 a-day car rental tax to help pay for part of a $250 million arena in downtown Kansas City. Voters okayed the tax on Aug. 3.

Supporters of the arena make little distinction that the campaign was handled by F-H's St. Louis office, and not its 100-member strong Kansas City unit. An aide to Mayor Kay Barnes, who staked her career on the project, told the Kansas City Star that F-H "should stay out of issue campaigning, not because of ethics but because they are incompetent." Steve Glorioso, according to the paper, was referring to F-H's new ethics policy announced in the wake of the Los Angeles overbilling story.

Betsy Solberg, F-H's regional president, believes her firm is unfairly being singled out and made a scapegoat of by opponents. To her, F-H was doing only what it is supposed to do, which is representing the interests of clients.

Anne St. Peter, GM of F-H/K.C., said even though her office had nothing to do with Enterprise it is time to move on. She is buoyed by support from people who recognized the "rough and tumble world of politics and business." St. Peter noted that none of F-H's key K.C. clients (Hallmark Cards, Negro Leagues Baseball Museum, Burns and McConnell, Gold Banc Corp and Teva Neuroscience) plan to drop the Omnicom unit because of the political work.

The K.C. Star noted that F-H's "much-vaunted PR process has come into question," especially in light of the double-whammy loss at the polls. F-H also lost a vote to allow riverboat gambling in Rockaway Beach, Mo.

Iraq's Ministry of Finance has hired Cleary, Gott-lieb, Steen & Hamilton to help gauge the financial claims on the country from the Saddam Hussein era.

The New York-based firm will verify an estimated $120 billion in claims from creditors in 67 nations.

Those obligations include grants given to Hussein's regime from Saudi Arabia, Kuwait, Qatar and the United Arab Emirates to finance Iraq's war with Iran.

CGS&H was hired by Kuwait in the aftermath of the Persian Gulf War to assess financial damages from Iraq.

The firm is required to register as a lobbyist on behalf of Iraq's Ministry of Finance because it will meet or communicate with U.S. officials about Iraq's financial obligations.

CGS&H has handled the sovereign debt restructurings of more than 25 countries, including Russia, Mexico, Indonesia, Chile, Madagascar, South Korea and the former Yugoslavia.

It will work closely with Iraq's accountant, Ernst & Young.


Green Bay Packers quarterback Brett Favre has signed on as a pitchman for Snapper lawnmowers, Howard Cosgrove, senior VP at Lindsay, Stone & Briggs, told O Dwyer's . The Madison, Wis.-based firm arranged the match.

Cosgrove said LS&B has done branding projects for Snapper, and handled opening day festivities for the football team's opening of the "new Lambeau Field" (a $300 million expansion project) in '03.

Cosgrove could not go into details about how Simplicity Manufacturing, Snapper's parent, plans to use the legendary quarterback. "That hasn t been worked out yet," he said. Favre is supposedly a lawn mowing enthusiast who looks forward to cutting the grass at his home in Mississippi during the off-season.


More than eighty percent (83 percent) of New Yorkers are not happy that the Republicans will hold their national convention in the Big Apple (Aug. 30-Sept. 2), according to a phone survey conducted by 5W Public Relations.

The poll of 536 people who either live or work in New York was conducted Aug. 2-3, which was after Homeland Security Secretary Tom Ridge's warnings about a possible terror attack on the New York Stock Exchange or Citigroup headquarters.

New Yorkers say they are unhappy with the GOP convention because of security issues/traffic congestion/closed streets (cited by 53 percent), "too many out-of-towners" (27 percent) and because "I hate Republicans" (13 percent).

Ronn Torossian, CEO of 5W, said the survey shows that New Yorkers expect mid-town Manhattan will be turned into a tense "war zone." He also said that ads by former NYC Mayor Ed Koch urging New Yorkers to make nice with the Republicans, and speeches by current Mayor Mike Bloomberg have not gained much traction.


Atamira Communications is handling PR for Andre Tolme, the 35-year-old civil engineer from New Hampshire who has just golfed across Mongolia.

Tolme divided the treeless steppes of Mongolia into 18 holes. He figured par was 11,800 for the 2.3 million yard course. That's equal to the distance between New York and Oklahoma City.

Using only a three iron, Tolme played "the front nine" last summer, and completed "the back nine" three weeks ago. He shot a 12,170.

Tolme has told various media that he golfed Mongolia because he wanted to.

Atamira, which is in Atlanta, will handle a media tour and sponsorship opportunities for Tolme. He has been booked on "The Today Show" and "The Tonight Show with Jay Leno" on Aug. 4. Atamira also handles book and movie rights.

Tolme is currently figuring out his next golf outing.

Dan Boston, the former VP-legislation and political affairs at the Federation of American Hospitals, has moved to Health Policy Source in Washington, D.C.

He joins from Baker, Donelson, Bearman, Caldwell & Berkowitz, where he founded that firm's health policy practice. The Hill, in its '04 rankings, rated Boston as one of the top healthcare lobbyists.
HPS was founded in '02 by Monica Tencate, who served as health policy director for the Senate Finance Committee, where she was responsible for Medicare and Medicaid. Tencate also served as health aide to Republican Sens. Bill Frist (Tenn.) and Bill Roth (Del.).

Boston is a fellow GOPer, having worked for Sen. Mitch McConnell (Ky.) and Reps Sue Kelly (N.Y.) and Joe Knollenberg (Mich.). He also was a member of the Florida Presidential Recount Team for Bush-Cheney 2000.

HPS has counseled Genentech, Biogen and American Healthways.

Internet Edition, Aug. 11, 2004, Page 3


Editors of the two largest syndicated newspaper supplements -- USA Weekend and Parade -- look for story ideas from publicists with a news angle that will have a national interest to their readers.

Jack Curry, editor of USA Weekend; Fran Carpentier, senior editor of Parade, and Colleen Curtis, managing editor/features for The New York Daily News' new "Sunday Now" section, familiarized publicists on the types of stories they use at a Publicity Club of New York meeting July 28, which was attended by 140 people.

Curry tries to come up with material on a national level that will have a "high level of exclusivity and interest" for USAW's 600 different papers across the country, which distribute the magazine.

Reward Needed

"There has to be a reward, there has to be something special every week because basically the newspaper business is in a little bit of trouble," said Curry.

"For a cover story, it has to cover things on a national level that our competitors are carrying and our newspapers are carrying or covering, but we have to come up with an angle that's so good, so exclusive, so unique to USA Weekend that it won t duplicate what the newspapers are doing, and it won t be the same as Parade is doing," he said.

Curry urged the publicists to think of "anything that can help us to get a national-level story that allows us to serve our newspaper's need to have promot-able items. If you have a local client of any kind you have to think, 'Where is the national aspect to this?"

He said publicists should be on the watch for stories about "major pop culture events," such as "Spider-man," the Olympics, Super Bowl and things related to Thanksgiving, Christmas, New Year's , and back-to-school.

"One of the things we try to do is use our clout and the fact that we can deliver 25 million readers to get the stars and to get the studios to do something for us that they may not do even for Time or Newsweek or for the local paper in which we re carried," said Curry.

Looks for News Peg

Carpentier, who oversees features at Parade, said the ideas behind a pitch should be "pertinent and fresh," and the clients, the causes, the products must be newsworthy and national in scope.

She welcomes story ideas that are oriented to trends, personalities in entertainment, health, science, technology, food, lifestyle, the home, family and environmental issues.

"When you re getting ready to pitch, figure out whether what you re pitching is a story or an item because we do have places where your items can fit," she pointed out.

The bottom line when approaching Parade, which goes into 36 million homes across the country, is "We want real people talking about real things, interesting things, and I m sad to say this does not mean the new CEO of the top pharmaceutical company."

Carpentier said it is a good idea for publicists to "personalize your pitch...Let us know what experts, authorities, or victims you can put us in touch with. Can you help us to arrange a photo shoot?

Even if your good efforts don t win you a placement, they will win our attention and start a relationship."

While every editor at Parade has his or her own preference on how to receive a pitch, Carpentier likes e-mail. The formula at Parade is to send the e-mail to the person's firstname_lastname@parade. com, and put in a real clear subject line.

SN Wants Local Angle

Curtis emphasized that "Sunday Now," which made its debut on June 6, is a local publication, and all the stories are targeted at readers who live within a 50-mile radius of the city.

She said the new section has a mix of arts and entertainment, with a lot of movie coverage.
It also has music coverage, book reviews, five food pages, some fashion and style stories.

The section features "lots of celebrity pictures," which she pointed out are not something the publicists want their clients included in.

She is not looking for "really racy coverage, we want something that people can feel comfortable with, we know because we see them on the subway; they take it around with them during the week and refer to it."

Wendy Bowman-Littler, who covers the non-profit beat for The Atlanta Business Chronicle, also handles the weekly Time Out entertainment and Corporate Caring calendar columns, and compiles special sections for the Chronicle, such as a Volunteer Inc. guide about how companies give back to the community and the official guide for the BellSouth Classic.

As another part of her job at the paper, she is editor of ATCOMM Publishing, a joint venture with the Atlanta Convention and Visitors Bureau. She has to produce many of the ACVB's visitors publications, including Atlanta Now magazine.

She told iCD Media that she prefers to get e-mail pitches. She is at [email protected].

Lyric Wallwork Winnick, who writes the weekly "Intelligence Report" in Parade magazine, is looking for "consumer-oriented news," according to Fran Carpentier, senior editor at Parade.

Winnick is interested in getting information about celebrities who are involved with an issue, cause or something unusual. She also likes surveys and "stuff that's out there and doesn t get a fair hearing or that's ignored," Carpentier said.

Winnick, who is based in Chevy Chase, Md., can be reached at [email protected].
(Media news continued on next page)

Internet Edition, Aug. 11, 2004, Page 4


Cox Enterprises, which owns 47.5% of The Daytona Beach (Fla.) News-Journal, is suing the publisher of the daily paper over sponsorship of a new performing arts center.

Cox, which is based in Atlanta, alleges the Davidson family, the majority owner of the News-Journal, had misused corporate funds in paying out $13 million up front to title a new performing arts center. The suit also accuses the owners of the paper of a conflict of interest.

Tippen Davidson, president/CEO of News-Journal Corp., is also founder of the Seaside Music Theater, which will be the primary tenant in the News-Journal Center, and Davidson's daughter, Julia, who is a member of the paper's board and an employee, also is the theater's managing director.

According to a memo from the paper's attorney, the sponsorship deal was made to offset "the necessary ill will" created by the practice of journalism.

"Our image as the grand patron of the arts is the velvet glove within which we clothe the iron fist of our journalistic independence," the attorney's memo said.


Shop Etc., published by Hearst Magazines, will go on newsstands Aug. 17 as a rival to Lucky, Conde Nast Publications women's shopping magazine, which has just increased its circulation rate base to one million.

Shop Etc., whose initial rate base is 400,000, will be published three times this year and 10 times in '05.

The magazine will divide its sections into fashion, home and beauty, and each section will feature content on products, ideas, trends and shopping information.

It will also have three checkbooks with voucher offers from fashion, home and beauty retailers. A column called "Top Floor" will show products available only to the Shop Etc. reader.
Mandi Norwood is editor-in-chief.


DM News will publish a special 25th anniversary issue in its Oct. 4 edition.

Tad Clarke, editor-in-chief, said the special edition will contain an overview of the evolution of the industry as well as articles written by industry pioneers and practitioners, that will highlight the trends, brands, people, suppliers and technology that marked the last quarter century in direct marketing.

Joe Fitz-Morris, who started Advertising News of New York (ANNY), which later became Adweek, was the first editor of DM News.

The special issue will be edited by Mickey Alam Khan, senior editor and director of editorial and business development for DM News.

Publicists can reach Khan at 212/925-7300, ext. 216, or at [email protected].

Chicken Soup for the American Soul, a magazine developed by Modern Media in Memphis, Tenn., and the creators of the "Chicken Soup for the Soul" book series, will make its nationwide debut with a June 2005 issue.

The magazine will have a distribution of 150,000 and will be sold at Wal-Mart and other retailers.

It incorporates the now defunct American Magazine, which was first published in winter 2002.
CSAS will cover family, food, fashion, home, health, travel, lifestyle, entertainment and culture.

J. Mignonne Wright, the founder and former editor-in-chief of American Magazine, is editor-in-chief of CSAS; Jack Canfield and Mark Hansen, co-authors of the book series, are executive editors.

Susan Magrino Agency, New York, is handling publicity for Modern Media.

Parade will introduce a new column in the fall called "Parade Picks," featuring all items involved with home entertainment, movies, books, CDs and DVDs, according to Fran Carpentier, senior editor.

TV Guide is developing a new weekly magazine that will focus on TV celebrities, under the supervision of Steve LeGrice, former executive editor of In Touch Weekly.

"Everyday Food," a TV program produced by Martha Stewart Living Omnimedia, will begin airing on PBS stations nationwide in Jan. 2005.

The first season will consist of 26 weekly episodes.

Each half-hour episode will provide solutions to everyday cooking challenges and present easy-to-make recipes along with tips and kitchen techniques.

Martha Stewart will not host any of the programs.

Plum, a specialty magazine aimed at pregnant women ages 35 and older, will debut in October.

The magazine, a collaboration of Groundbreak Publishing and the American College of Obstetricians, will appear once a year, and it will be distributed free in doctor's offices.

Congressional Quarterly, in Washington, D.C., has acquired Washington HealthBeat, a newsletter founded in 2001 by John Reichard, who will remain as editor-in-chief of newly formed CQ HealthBeat.

Factiva, a Dow Jones/Reuters company that tracks daily press mentions, reports Teresa Heinz Kerry's "shove it" phrase to Colin McNickle, the editorial page editor of The Pittsburgh Tribune-Review, was the most cited Kerry campaign message following the Democratic National Convention. The phrase was mentioned 381 times in U.S. publications.

Daniel Day, former Trenton-based bureau chief of The Associated Press, has joined Stern + Assocs. in Cranford, N.J., as a media strategist.

Richard Berke, 45, presently Washington editor of The New York Times, was promoted to associate managing editor for news. He will move to New York in January.

Alberto Chehebar was named editor of Loft, a men's lifestyle magazine for Hispanics.

Celeste Fraser Delgado was named managing editor of the magazine's U.S. Hispanic edition, which is based in Miami Beach.

Chehebar, 35, who replaces Juan Rendon, was previously co-owner of the boutique women's wear line Soye. Fraser Delgado had been covering the Latin music industry for the Miami New Times.

Loft, which was started in 2001, has a circulation of 80,000 in the U.S., with an additional circulation of 25,000 copies of special editions in Mexico, 10,000 in Colombia, and 10,000 in Venezuela.

Isaac Lee is editor-in-chief of Zoom Media Group, publisher of Loft and Poder Magazine.

David Ewalt was named telecom reporter at

Michelle Lee has joined In Touch Weekly as articles editor.

Iris Sutcliffe was appointed managing editor of Budget Living magazine.

Allegra Hatch, previously fashion feature editor at Women's Wear Daily, has joined Star magazine as features editor.

Mark Yost, who covered the auto industry for the Dow Jones Newswires for 10 years, has joined The St. Paul Pioneer Press as an editorial writer.

Internet Edition, Aug. 11, 2004, Page 7

APR TESTS (continued from one)
the previous written and oral test (56% pass rate).
Carol Scott, of Kailo Communications Studio, Corpus Christi, Texas, chair of the UAB, said the 488-member class was a little larger than usual because many sought their APRs before the new process was installed.

In 2001, according to UAB statistics kept by Kathy Mulvihill at PRSA h.q., 303 of 442 candidates passed for a 68% pass rate while in the previous year 213 of 393 passed for a 54% pass rate. The pass rates for 1999 and 1998 were 59% and 58%, respectively, when 265 and 258 new APRs were created.

The new process includes a rigorous pre-exam requiring a collection of the candidate's work, an interview conducted by three APRs and a computerized multiple-choice test that is given at Thomsen Prometric centers throughout the U.S. PRSA members pay $275 to take the test while members of the other groups pay $385.

In another development, the rule requiring five years of PR experience for exam-takers may be dropped (page 8).

Supremacy of APRs Challenged

The APR test statistics, which Scott said "disappointed" the UAB, came a couple of days after a new challenge emerged to the supremacy of APRs at PRSA.

Only APRs have been allowed to vote in the Assembly or hold national office since 1973.

Galloway told a teleconference Aug. 3 that the board had reviewed the Cleveland proposal to let non-APRs join the Assembly and "responded favorably." He said the "real issue is good government-ensuring representation throughout the Society and definitely at the chapter, section and district levels."

Their board members are "those who are most engaged and who will come to the Assembly and make informed decisions," he said.

David Rickey, chair of the board of ethics and professional standards, agreed, saying the issue has been debated for several years and, "like fine wine, we finally got it to the point where it's drinkable."

Scott: New Test Gaining Momentum

Scott said that since July 1, 2003, when the new exam process was launched, through June 30, 2004, 360 candidates applied to sit for the exam; 171 took part in the Readiness Review; 148 advanced from the RR; 68 took the exam, and 49 passed it.

"That's an average of one application per day and one new APR per week," she said.

"We re gaining momentum for the re-engineered exam and so far have received great enthusiasm from the candidates who have taken it," she added.
"Even though a higher percentage of candidates are passing the exam," she continued, "we are finding that we still have potential candidates who are unsure about the process and therefore hesitant to initiate their application.

"While we re disappointed that our numbers aren t higher, we also recognize that it takes time for such a significant change to be adopted. We are confident as more candidates go through the accreditation process and experience the ease of the computer-based exam, our numbers will increase."

Educators Say Time Needed

Everett Rogers, Ph.D., communications professor at the University of New Mexico, commenting on the new test, said that "Individuals in a social system do not all adopt an innovation at the same time."

Rogers, an authority on the diffusion of innovations theory (one of the theories included in the new computer-based exam), said individuals adopt over a period of time. The initial APR test-takers are considered "early adopters" and "serve a vital role in diffusion of the new APR process," he said.

Four years of preparation and $250,000 went into creation of the new process. Most of the money was supplied by PRSA, which maintains general supervision of the program.

'Best Members Left Out'

Christopher Lynch, immediate past president of the Cleveland chapter, told the PRSA leaders conference call Aug. 3 that many of the "best" members of chapters, sections and districts can t serve in the Assembly because they are non-APR. About half of the presidents of PRSA's 110 chapters are non-APR.

Pamela Miles, president of PRSA/National Capital, the biggest in PRSA with more than 1,000 members, said its 11 delegates voted last year to decouple the Assembly from APR and would do so again.

Jennifer Grizzle, president of PRSA/Georgia, No. 2 with nearly 900 members, said the chapter favors decoupling the Assembly and that she, herself, also favors decoupling the board.

Burt Wolder, president of PRSA/New York, No. 3 with 600 members, said the chapter has long been in favor of decoupling the Assembly and board.

Steven Knipstein, president of PRSA/Chicago, with more than 500 members, said the board is in favor of decoupling the Assembly.

Colorado Chapter Disappointed

Jon Pushkin, of Pushkin PR, Denver, president of the Colorado chapter, seventh biggest and which has been a longtime foe of decoupling, said that while he hasn t discussed the Cleveland proposal with the board, "My personal opinion is that I am surprised and disappointed this issue is coming up again.

PRSA has spent a significant amount of time and energy on decoupling.

Every chapter has had a chance to voice its opinion on multiple occasions, and it has been voted on and failed twice in the past two years. I believe it is time to move on to more important issues facing PRSA and our profession."

Fleishman-Hillard/Washington, D.C., handled media relations for the re-opening of the Statue of Liberty. The National Park Service, which runs the monument, and F-H put together a ceremony for Aug. 3 with Interior Secy. Gale Norton, New York Mayor Mike Bloomberg and CNN's Aaron Brown.

Internet Edition, April 11, 2004 Page 8



Omnicom, which owns PR firms doing about $1 billion in fees (Fleishman-Hillard, Ketchum, Porter Novelli, Brodeur, etc.), is a "beleaguered stock," according to Barron's (page one story).

No wonder!

Practically anyone who comes into contact with OMC is either made a fool of or is had in some way.
Particular victims are those who purchased OMC at $107 in 2001 and are sitting with a 36-point deficit.

They must be chagrined that CEO John Wren and two other insiders sold shares worth $24 million in the first half of 2004 while buying none. Why are they doing this if the future is so great? Other victims are those who lent OMC $2.3 billion at no interest, hoping the stock would soar and they could convert bonds to stock at a big profit.

They are being soothed somewhat because OMC is being forced to pay 2.75% interest on the bonds.

Startling is the news that OMC, a roll-up if ever there was one (1,500+ different companies), only spent $1 million on new acquisitions in the second quarter, which Wren and CFO Randy Weisenberger said was a record low.

Analysts on a conference call July 27 were intrigued by the sudden drop-off. Is this the end of the acquisition road? asked several.

Weisenberger said OMC lawyers have been busy with Sarbanes-Oxley, which will cost OMC $50M this year. Also, OMC never makes a buy without the most thorough examination, he said. It would rather not buy anything. Both Wren and Weisenberger predicted a pickup in acquisitions in Q3 and Q4.

But among those shafted by OMC are all the ad agencies and PR firms it purchased that are no longer allowed to report their billings and fees.

Why would any PR firm want to join the OMC family when it will be deprived of one of its main new business tools–a ranking by legitimate PR publications based on easily available proofs?

Douglas Carmichael, now the nation's accounting "czar" (Public Company Accounting Board), told us in 2003 that the congloms were wrongly citing SOX as the reason they could not allow reporting of payroll and employee totals. Such figures are mere "compilations" and not covered by GAAP, he said.

Robert Benowitz, a securities lawyer with a specialty in SOX and partner at Rick Steiner Fell & Benowitz, New York, said the bill was designed to restore "public confidence in the integrity of the financial markets" and that there is nothing in it that blocks disclosure of employee and payroll totals.

Benowitz, who was at the SEC for six years, said "Companies must ensure that, among other things, the released information is in compliance with their internal disclosure controls and of course, is accurate, but that companies subject to SOX should consult with their counsel on compliance with the law."

The ad industry does not pretend to tell the truth, the whole truth and nothing but the truth about products. Its job is selling and it does it well. But PR is about truth if nothing else. A PR firm that cannot describe its size to clients and prospects has raised questions about its integrity and honesty.

There are plenty of knocks about OMC and the other ad/PR conglomerates that investors talk about although we don t often see them in newspapers.

–The $13.87 billion debt of the Big Five is a heavy burden that could get much heavier if interest rates rise.

–"Procurement officers" are depressing the entire ad/PR business by giving agencies the "third degree," pinching every penny, and demanding proof of effectiveness. New business is at lower margins.

–The holding company model (which pays an extra layer of executives huge sums) is getting on the nerves of clients.

–The creatives who were sold out by the owners of their firms are especially watchful of these sums and are demanding more for themselves. OMC and the other congloms will have to pay more to keep the creatives happy lest they open their own shops.

–The word the congloms fear is "independents, " meaning creative shops without all that overhead.

Attempts to buy up every last ad/PR firm and eliminate the entire category of independents failed.

There is an economy of scale in media buying, at which the congloms excel, but not in creative.

–Particularly wasteful is the $50,000 each of the top ten conglom-owned PR firms gives each year to the Council of PR Firms. CPRF abandoned its goal of ranking all PR firms and now has no visible mission.

This is another power play that failed.

–The economic resurgence may top out early, some forecasters say, blocking ad agency growth.

–OMC has a problem with its biggest PR unit, Fleishman-Hillard, which is charged with false billing by the City of Los Angeles. F-H reported $345M in fees and 2,288 employees in 2001 but no one outside of OMC and F-H knows what the numbers are now. A clue might be that F-H's PRSA members dipped 33% from 70 to 47 from 2001 to 2004. It's a poor clue, but the only one.

–The Big Five ad/PR congloms have wooed Wall St. and snubbed the trade and general press for years.

The most painful example is Wren taking OMC's annual meeting to the hinterlands. Instead of undergoing the purifying lash of the press, the five have dodged it by concentrating on the analysts, many of whose companies do business with the five. But even Wall Street is becoming disillusioned.

-- Jack O'Dwyer


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