SARD, VERBINNEN LEAD CSV BUYOUT.

U.K.-based Huntsworth has agreed to sell its Citigate Sard Verbinnen unit to a management team led by George Sard and Paul Verbinnen for $20M. The financial PR unit had $16.9M in revenues and $5.2M in fees for fiscal ’05, which ended last February.

Huntsworth acquired CSV as part of a 2005 merger with Incepta. It says CSV does not fit its goal of achieving “strong visibility of sustainable annual revenues.”

Each Huntsworth unit is expected to start the financial year with 70 percent of projected fees from annual contracts or long-term commitments from clients. Financial units Citigate Dewe Rogerson, Hudson Sandler and Global Consulting are near that mark, having more than 65 percent of projected `06 business from retainers.

Huntsworth calls CSV an “excellent business in a clear niche in the U.S. market,” but notes that only 35 percent of its annual business is contracted and those pacts are on a 30 day notice basis.

The firm also made the deal because it believes CSV management was going to leave the firm with the expiration of their contracts, a move that “would result in the loss of a very substantial amount of business,” and leave Huntsworth with $17M in lease commitments. Huntsworth says it wanted to avoid a potential court fight. It also cites “strategic” and “cultural” differences as reasons for the transaction.

CSV management agrees to pay Huntsworth $2.5M by Jan. 1 for a 51 stake in their company with the balance due Dec. 31, 2009.

Chairman Sard and president Verbinnen (Ogilvy Adams & Rinehart veterans) founded CSV in `92. The firm has 65 staffers in New York, Chicago and San Francisco.

Huntsworth CEO Lord Chadlington, the former Peter Gummer, says the CSV deal completes the integration of Incepta.

METCALFE JOINS WEBER SHANDWICK.

Kim Metcalfe has left her senior VP-media relations post at Edelman for a spot in Weber Shandwick’s Chicago office.

She handled Edelman/Chicago’s media outreach for five years. Prior to Edelman, Metcalfe spent 13 years in TV news in Grand Rapids and Minneapolis, and worked at the Marshall Space Flight Center in Huntsville, Ala.

Cathy Calhoun, president of WS in Chicago, praised Metcalfe’s “proven track record of delivering strategic plans and high-impact media placements.”

Metcalfe reports to Bryan Specht, who heads the corporate affairs team at WS.

UCONN SEEKS FIRM TO BOOST BIZ SCHOOL.

The University of Connecticut’s School of Business, ranked No. 51 on U.S. News & World Report’s vaunted scale of the top 50 graduate business schools, sees PR as a way to break into the list.

UConn’s School of Business is eying an effort to boost its outreach to the media and other audiences as part of an overall plan to hone its “brand identity.” The institution has issued an RFP for a PR firm to design and develop the effort.

The school wants a firm to put together an ongoing campaign to promote its “newsworthy” events, people and places to local, regional and national press, along with a means to measure its success. The push will also target deans and directors at other accredited schools, recruiters and students.

A one-year contract is planned with four option years. A budget figure was not available as pricing is 10 percent of the evaluation.

A mandatory pre-proposal conference has been set for Feb. 21 in Storrs, Conn. Karen White ([email protected]) is the school’s purchasing department contact for the PR RFP.

Intel has selected WPP Group units Burson-Marsteller (domestic), Hill & Knowlton (Europe) and Ogilvy (Asia) in its long-running PR search. New CEO Paul Otellini, the first non-engineer to head Intel, has promised to rev up its marketing efforts.

JOHNNY ROCKETS TAPS H&K.

The Johnny Rockets Group has replaced CarryOn Communication with Hill & Knowlton as its agency of record for PR following a competitive review.

CarryOn, which landed IHOP’s PR account late last year, had the business for three years.

The Lake Forest, Calif.-based company features a 1950s-style diner format in its 183 restaurants. It has restaurants in 29 states and eight countries, including Mexico, Bahrain and Kuwait.

JR’s board of directors, which has pursued overseas expansion, was a key factor in making an agency change as it wanted a firm with international capabilities.

Mimi Somerman, SVP of marketing, said the company wanted a firm to deliver “creative thinking and buzz-building initiatives” to introduce more consumers to the restaurants. She praised H&K’s track record in creative lifestyle marketing communications and media relations.

H&K’s Irvine and Los Angeles offices, under the direction of GM Bonnie Goodman, service the account.

GAO: BUSH ADMIN. PAID $200M FOR PR.

Seven federal departments contracted with 54 PR firms and spent $200M between Jan. 2003 and mid-2005, according to a General Accountability Office report released last week.

An additional $15M went to contracts with media organizations and $90K was earmarked for individual members of the media.

When coupled with advertising, Uncle Sam racked up a $1.62 billion tab over that time period, with $1.1B of that for the Defense Dept. alone.

The report did not name individual PR or ad agencies, but detailed contract numbers and descriptions, along with budget information, for campaigns carried out by outside contractors for the seven departments. The work detailed includes assignments like promoting new currency for the Treasury, the Army’s role in the “Global War on Terrorism,” fire safety, and touting “marriage-related research initiatives.”

The seven departments – Commerce, Defense, Health and Human Services, Homeland Security, Interior, Treasury, and Veterans Affairs – account for nearly all the obligated federal dollars for PR and advertising, according to the GAO, which produced the 160-page report after requests by Democratic Congressmen in the wake of the Ketchum-Armstrong Williams flap.

A “Federal PR Spending” report conducted for House Democrats in early 2005 found that $250M was spent on PR between 2001-2004, with about $227M going to Omnicom units like Matthews Media Group, Fleishman-Hillard, Porter Novelli and Ketchum.

U.S. SEEKS FIRM FOR ANTI-POPPY PUSH.

The U.S. State Dept. is soliciting proposals from firms to conduct a national social marketing campaign in Afghanistan to discourage the cultivation of poppies and support for the international drug trade.

The request for proposals comes as the heroin trade is soaring in Afghanistan amid occupation by U.S. and NATO forces. Opium exports accounted for more than half of the country’s GDP in ’05 and Afghan heroin is showing up in the U.S. as its cultivation boom has made it cheaper than South American produced heroin.

The budget for the anti-poppy effort is set to top out at $3.8M. The complicated assignment must be administered in both Dari and Pashto languages and target Afghan citizens and community stakeholder groups like teachers and business people.

Technically, the campaign is to incorporate posters, radio and TV PSAs, educational comic books, calendars and billboards, among other tactics and methods. The State Dept. sees the campaign as complementing “alternative livelihood projects” and law enforcement institution building in the country. It will also build on existing work that has included radio broadcasts, distribution of stickers, matchbook covers and posters.

The U.S. Embassy’s Counter-narcotics Public Information Chief will oversee the work from Kabul.
Proposals are due March 16 and questions can be sent to contract specialist Anthony McIntosh ([email protected]) through Feb. 22.

GAP SHELVES REVIEW AMID EXEC CHURN.

Gap Inc. has shelved a review to find a main PR firm in the final stages of the process. The unusual move is apparently the result of the clothing retailer’s ongoing struggles and turnover in its executive ranks.

Gap had narrowed down its search to Edelman, Hill & Knowlton and Weber Shandwick last fall, but twice delayed a final decision.

But the last few years have been tough on the company as Wall Street and the press have amplified its sales and fashion woes.

In addition, Gap’s PR/marketing department suffered two major departures last year. Rebecca Weill, a nine-year veteran of Gap PR, left as director of PR for a senior post at sister company Old Navy last year. Jeff Jones, executive VP of Gap marketing, has also departed.

Gap has worked with fashion PR/marketing firm New York-based KCD Worldwide in recent years.
Select Resources International handled the aborted PR review.

FT COLUMNIST RAPS PR STONEWALL.

Sathnam Sanghera, who writes the “Inside Business” column for the U.K.’s Financial Times, devoted his Feb. 10 column to a complaint about his failure to gain access to CEOs, putting the blame for this on their PR executives.

He said that not only he but other journalists he has talked to have the same problem. “This reticence is widespread,” he wrote, and possibly due to the fact that companies are spending heavily on PR and “no PR consultant dares risk a mistake.”

Sanghera said that a couple of years ago he tried to do a column based on interviews with CEOs but gave up after a month or two because “so few CEOs were willing to talk.”

More recently, CEOs would not even talk to him about an “inconsequential piece” on executive cars. Six of the eight CEOs he called declined comment.

PR Is Widely Used

“Nowadays, everyone in business employs a PR consultant,” says Sanghera.

He recently interviewed David McMurtry, head of Renishaw, a listed engineering company, and realized that for the first time in eight years as a business journalist there was no corporate PR person present to supervise the interview.

McMurtry told him an outside PR firm was hired when the company went public in 1984 but the firm “never impressed me.”

Sanghera says many journalists feel PR people “stand in the way of us getting information” but his own view is that “some PR pros are excellent” while others are not.

He said he realizes financial PR people do more than deal with reporters since they are involved in analyst relations, investor relations, internal communications and provide strategic advice to CEOs “whose attitude to the media is generally akin to Osama bin Laden's attitude to the Central Intelligence Agency.”

VIACOM PICKS UP GORE FLICK.

Viacom’s Paramount Pictures has agreed to distribute former Vice President Al Gore’s documentary on the dangers posed by global warming.

“An Inconvenient Truth” outlines Gore's efforts to publicize the links between carbon emissions and climate change. It will open in the U.S. on May 26. The 95-minute film received a good reception when it debuted at the Sundance Film Festival in January.

Davis Guggenheim, whose credits also include the HBO’s “Deadwood,” and public broadcasting’s “The First Year” directed the film. Environmental activist Laurie David, the wife of Larry David of HBO’s “Curb Your Enthusiasm” fame is executive producer.

Paramount's Participant Productions unit also produced politically based films “Good Night, and Good Luck” and “Syriana.”

A book version of An Inconvenient Truth will be released by Rodale Books to coincide with the film's debut. It is touted as a follow-up to Gore’s ’92 bestseller “Earth in the Balance.”

CLAUSE SHADOWS K-R'S AUCTION.

Knight-Ridder has revealed that its corporate charter requires a potential acquirer to receive approval of a takeover by 80 percent of K-R’s outstanding shares if an independent panel deems the new owner is not committed to “journalistic excellence.”

A “journalistically acceptable” buyer would only need the nod from two-third of K-R’s shares. K-R’s board of directors appoints members to the review panel.

BusinessWeek has proposed a dream ending to the K-R saga: a joint takeover of the newspaper chain by the New York Times Co. and The McClatchy Co.

The Times would scoop up K-R’s big city properties in Philadelphia (Inquirer), San Jose (Mercury News) and Miami (Herald), while McClatchy would add K-R’s smaller city holdings under BW's scenario.

DISNEY OFFERS VIDEO ON DEMAND SERVICE.

Walt Disney Co. launched MovieBeam on Feb. 14, a video-on-demand service delivering high-definition first-run films in nearly 30 cities including New York, Chicago and Los Angeles.

The Burbank-based company developed MovieBeam a few years, but the service went nowhere. Disney revived the venture after receiving cash from Intel, Cisco Systems and a trio of venture capital firms.

Cisco will sell a MovieBeam box under its Linksys brand in electronic stores (Best Buy, CompUSA) for $200.

There is a $30 activation fee for MovieBeam. First-run movies will rent for $3.99 and high-definition video will go from $4.99.

MovieBeam is aimed at video stores like Blockbuster, which rent 85 percent of first-run features in the U.S. The 30 million people who rent at least four videos a month is MovieBeam's market.

Dennis Publishing’s Blender will post and repurpose content for AOL Music. The partners will unveil a co-branded Blender/AOL radio station within a month.

MCGUIRE TO GUIDE PR FOR THE CW.

The CW, the upcoming network to be formed from the merger of UPN and The WB, has named a veteran of both networks, Paul McGuire, as senior VP of communications.

McGuire, in addition to developing overall and day-to-day PR strategy, is charged with orchestrating the network's fall ’06 launch and building its communications unit. To launch The CW, the network said McGuire will work closely with president of entertainment Dawn Ostroff and COO John Maata.

McGuire has directed corporate and consumer PR campaigns for The WB as a senior VP since 2001 and earlier was senior VP of media relations at UPN. He earlier promoted NBC's prime-time lineup as a VP.

The CW will feature a six-night, 13-hour primetime lineup targeting a younger demographic, in addition to other programming which will incorporate pieces from both WB and UPN. It plans to broacast a 30-hour weekly schedule.

Meanwhile, Joanna Massey, who headed communications for UPN, has moved into a senior VP/communications role at parent CBS Corp. for the West Coast.

TIME WARNER RELIES ON KEKST.

Time Warner relied on Kekst & Co. to fend off a proxy challenge launched by corporate raider Carl Icahn, according to Susan Duffy, VP-communications at TW. “We’ve always worked with Kekst,” she told O’Dwyer’s.

Time Warner Inc and billionaire Carl Icahn reached a deal last week to end a six-month public battle over boosting the value of the media giant.

Time Warner’s board has agreed to repurchase as much as $20 billion in stock and would consider electing two new directors with Icahn’s input. The company also also agreed to implement $1 billion in cost savings and continue to review a report by Icahn and Lazard Ltd, which investigates ways to overhaul companies.

Icahn Partners has agreed not contest the company’s slate of directors.

The U.S. Federal Trade Commission had given Icahn Partners the “green light” to launch its proxy fight.

Icahn’s group controls about five percent in TW. It uses Source Communications, the home of former Mayor Giuliani Press Secretary Ken Frydman, as its PR firm. Icahn said he wanted to split TW into four separate entities in an effort to unlock shareholder value. TW has maintained that it is on the right track with CEO Dick Parsons in charge.

The City of Philadelphia has emerged as the lead plaintiff in a lawsuit by investors filed against Tribune Co. over the circulation scandals at Newsday and Hoy.

Newsday reported the city’s Board of Pensions and Retirement said it lost $310,600 by purchasing Tribune stock when the company’s execs allegedly failed to detect inflated circulation numbers for the papers and then allegedly were tardy in disclosing the problem.

Shares fell from more than $47 to less than $40 during the period.

(Media news continued on next page)

Briefs __________________

Budget Living is shutting down after three years, following a 60-day period of trying to find a buyer.

A post on the magazine’s online message board said the Jan./Feb. double issue is being combined with March and should be on newsstands in mid-February.

Circulation of the title was over 500K.

Pace Communications has been tapped to produce a custom, quarterly magazine for Wachovia Wealth Management targeting its most affluent clients.

The publication has not yet been named, but is slated for a May 2006 debut at the Wachovia Championship professional golf event in Charlotte, N.C. It will be sent to 50,000 Wachovia clients and prospects with a minimum of $2M in “investable” assets.

External ads are capped at eight pages for the 52-page glossy pub.

LTB Media, the publisher of cultural titles like Art & Auction, Modern Painters and Gallery Guides, is planning a new magazine, Culture & Travel, for a September launch.

The new publication will cover travel from an arts perspective, according to LTB, which expects to publish two issues this year and six in 2007.

Michael Boodro, formerly an editor at Elle Décor, New York Times Magazine, and Garden Design, has signed on as editor.

Hanley Wood, the construction and home building media company owned by JP Morgan Chase, has signed a multi-year deal worth $30M for R.R. Donnelley & Sons Co. to produce HW’s 22 business-to-business magazines. The titles include Coastal Contractor, Masonry Construction and Upscale Remodeling.

A group of investors has purchased Campaigns & Elections magazine and its political training seminars from Votenet Solutions. The 26-year-old mag is billed as the only non-partisan publication for the political campaign and public affairs sectors.

The investors, under the name Political World Communications, LLC, said C&E’s staff will remain in place under current managing editor Morgan Felchner. The all-cash deal also includes the “Campaign Insider” weekly newsletter, Political Pages directory of consultants and CampaignLine.com.

TravMedia, a service which provides company PR information and materials to travel journalists, has opened a U.S. headquarters in Boston after five years covering the U.K., Australia and New Zealand.

The company, which says it is eyeing expansion to Germany and Japan in 2006, claims 4,000 reporters access its news feeds, which include press releases, photos and e-mail alerts.

Mark O'Toole, a founding member of New England Cable News, is VP of sales and marketing for TravMedia USA. Mark Sheehan, former int'l sales and marketing director for the Travel Corporation & Destination America, is VP of business development in the U.S.

The premiere issue of Quince Girl magazine has been published targeting the 400K Hispanic girls that turn 15 each year and plan events for their “emergence into adulthood.”

The inaugural edition coverage includes traditions of the quinceanera, beauty tips, personal recollections, as well as features on gowns, dresses and budgeting.

The magazine is published by Quince Media and operates the website quincegirl.com.

People ___________________

Former CBS News medical correspondent Howard Torman is hosting and serving as managing editor of a TV news segment being distributed via cablecast and syndicated placement by broadcast PR company Mediahitman, Inc.

Torman’s program, “HealthBreak with Dr. Howard Torman,” is aimed to generate consumer awareness of advances in health and medicine. The distributor said the program is produced in a familiar news style, featuring the rapid script-to-screen turnaround time, the look, feel and projected authority of a network newscast. Torman calls it the “synthesis of news, consumer education and DTC health marketing.”

Prior to a four and a half-year stint on “CBS This Morning,” Torman was a health reporter and editor in California for nine years, and earlier, a full-time faculty member at Harvard Medical School. He was a cardiovascular staff physician at the Brigham and Women’s Hospital in Boston.

Linda Shiner was promoted to editor of Air & Space/Smithsonian magazine. She has been with the Washington, D.C.-based publication for 19 years.

Youthworker Journal, a bi-monthly magazine which targets youth ministers in North America and is published by Christian media company Salem Communications Corp., has named a new editorial team. Chap Clark, chairman of the Youth, Family and Culture department at Fuller Theological Seminary in Pasadena, Calif., and Steve Rabey, a journalist and author, will oversee content, which includes features and reviews relevant to youth ministers.

Professional golfer Annika Sorenstam has inked a long-term deal to serve as “playing editor” for Golf Digest and Golf for Women magazines. Sorenstam contributes bylined instruction and feature articles, under the deal. She joins a slate of playing editors like Tiger Woods, Jack Nicklaus and Tom Watson.

Bill Clinton is the latest to sign on for an online/TV course called “Issues in Media & Public Policy” put together by C-SPAN, the University of Denver, and Cable Center of Denver. USA Today editor-in-chief Ken Paulson, Bill Press and Newt Gingrich are among participants in the course, which will be available for students at the Univ. of Denver, George Mason Univ., Purdue Univ., and Pace Univ.

Omnicom, biggest owner of PR firms (about $1 billion in PR fees), had its usual rosy earnings report Feb. 14 but the stock dipped (page one).

Its PR revenues (Fleishman-Hillard, Ketchum, Porter Novelli, Brodeur) were said to be up 2.1% for the year, which is no great gain. How much of the revenues came from acquisitions is not known.

For the fourth straight year, OMC won’t let its PR units provide any fee or staff totals. This tell ‘em-little-or-nothing attitude typifies OMC’s financial reporting and is one of the reasons the stock dipped.

The blockbuster news is that CEO John Wren in January unloaded 200,000 shares worth $17.2M and has exercised options to unload another $17M.

This is the same John Wren who, to show his faith in OMC, purchased 20,000 shares worth $1M on June 13, 2002, the day after a Wall Street Journal expose of OMC accounting practices halved its stock.

Some investors are now wondering if his huge sales is a signal he is getting ready to “bail out.”

They remember that OMC, once a 32% owner of Razorfish, sold four million shares at $35 on March 14, 2000, a month before the dot-com crash.

Bad news had hit RAZF Feb. 15, 2000 when CFO Laurence Begley resigned. He had been with i-Cube, another dot-com with sales of $57M that was purchased by RAZF for $547M in stock. There was a culture clash between RAZF and i-Cube, said a stockholder lawsuit against RAZF, whose execs were charged with failing to divulge key information. RAZF, once $41, later sank to 43 cents.

In getting out early, OMC pocketed a $110M pre-tax gain ($63M after-taxes). We wonder who bought this stock since the bad news broke in February. OMC off-loaded RAZF and other dot-coms, wrongly avoiding an $89M hit on earnings, critics told a Wall Street Journal blast on OMC Feb. 8.Wren was his usual ecstatic self about OMC Feb. 14.

A disgruntled stockholder put the entire transcript on Yahoo!Finance so investors could see the unresponsive answers of OMC execs and Wren’s unbridled enthusiasm about OMC.

Of course, no analyst on the call would dare bring up the huge stock sales nor any other subject that might annoy Wren or CFO Randy Weisenburger.

The latter noted that interest costs, formerly a pittance, would be $100M in 2006. Investors say they will be higher if OMC stock keeps dropping. Holders of these “zero” bonds can demand their money back. Weisenburger also said OMC is switching to “cash- based” pay for execs rather than stock options. Investors complained that, as usual, no details were given. What good are options when OMC stock is about 25 points below its high of $107 in 1999?

OMC paid a net of $643M for its own stock in 2005 but reducing the float did not help the stock price.

There’s just too much disbelief in OMC because of its sketchy financial reporting, investors say. They’re alarmed that no media, except the WSJ (every three years or so), will take on OMC. They’re disappointed in Advertising Age, AdWeek, Financial Times and New York Times. OMC ducks the New York press by taking its annual meeting to distant cities such as L.A., Atlanta and Dallas where attendance is scant.

The big need in PR today, according to Harold Burson (page 7) and many others, is for good writers. He notes this requires lots of reading.

PR once recruited reporters but many of them feel PR and advertising are lesser callings (“baloney!” says Burson) and besides, editorial now pays better.

A proposal has again been made to promote PR careers to students at the 3,700 colleges that don’t have any PR courses (or at least not the five required by PRSA). The 2002 proposal (for at-large student members of PRSA) has irked professors and students at the 270 colleges with PRSSA chapters. Encouraging competition for PR jobs from non-PR students at the other colleges did not exactly make their day.

We urge them to set aside their anti-competitive instincts and do what would be good for the industry. An influx of English Literature and bright liberal arts majors would be good for PR, which must face the fact it has to recruit and train its own writers and can’t rely on media any more as farm clubs. Counselors and corporate execs, who once dominated PRSA, must wrest control back from the Educators Academy and PRSSA, which are blocking at-large memberships. This issue should not have to wait until the Assembly Nov. 11. PRSSA members who want “auxiliary” or “second-class” memberships for those at non-PRSA colleges are not living up to the pledge of “fairness” they take.

One result of opening the student membership doors would be increasing the diversity of PR recruits, who are now almost entirely white women.

We have brought the at-large issue to the attention of Rochelle Ford of Howard University, national faculty advisor to PRSSA; Bob Pritchard of Ball State University, chair of the Educators Academy; Sue Bohle, PRSA director who is liaison to PRSSA; Rick Fischer of Memphis University who won PRSA’s “Outstanding Educator” award in 2005; Mary Beth West, Maryville, Tenn., counselor who is professional advisor to PRSSA; Vincent Hazleton, professor at Radford University who just joined the PRSA board; Rhoda Weiss, president- elect and an instructor at UCLA who backed the at-large proposal in 2002; Sarah Yeaney, 2003-04 PRSSA president who now works a few blocks from us at Articulate Comms. and sends us releases but doesn’t talk to us, and Scott Iwata, 2005-06 president whose one e-mail to us said he was too busy to talk to us. ...the current stock excuse of PR people who want to duck the press is that media is just one of their many duties and they’re “too busy.” We think all these other duties PR pros have taken on is just a convenient excuse for ducking the press.

--Jack O'Dwyer