IRAQ PR RFP GOES PRIVATE.

The U.S.-led military force in Iraq has moved a multimillion-dollar RFP for PR firms to work in Iraq from a public database to a private system designed for “sensitive but unclassified” acquisition information. Only firms that are cleared beforehand to provide services to the government can view the materials in that database, FedTeDS.gov.

Last month, the Multi-National Force-Iraq issued a notice via the public Federal Business Opportunities system, or FedBizOpps, stating that it planned to release an RFP in May to collect proposals from PR firms for a marketing campaign supporting its electrical reconstruction efforts in Iraq. The work was valued from $11M-$25M. Past RFPs for PR work in Iraq were handled in the public FedBizOpps system.

Hill & Knowlton, Jaffe Associates, The Gallup Organization, and Hooah Advertising and Marketing are among firms that have expressed an interest in the RFP. The Lincoln Group has been the Multi-National Force-Iraq’s primary PR firm through the war.

FULLER JOINS APCO

Craig Fuller, former chief of staff to President Bush I, has joined APCO Worldwide as executive VP and a member of the independent firm’s international advisory committee. He also served as chairman of the `92 Republican National Convention.

Fuller made his mark in the corporate world as VP-corporate affairs at Philip Morris and president & CEO at the National Assn. of Chain Drug Stores. He resigned that post in `06. At that time, Fuller was one of the highest paid association executives, pulling in more than $3M a year.

Fuller also held top posts at Hill & Knowlton and Burson-Marsteller. He served in the Reagan White House as assistant to the president for cabinet affairs, and worked at Deaver and Hannaford from `77 to `81. That was the firm of former Reagan advisors Mike Deaver and Peter Hannaford, an APCO advisor.

A federal judge has “certified” the class action securities fraud lawsuit filed against Omnicom over its dot-com investment losses on behalf of those who purchased its stock from Feb. 20, `01 through June 11, ’02.

Judge John Keenan, U.S. Southern District of New York, appointed New Orleans Employees’ Retirement System as the lead plaintiff in the case. It claims that OMC established a shell company, Seneca Investments, to shield its bottom line from losses that occurred during the dot-com bust.

408 FIRMS EXPAND ENTRIES IN PR DIR.

A record 408 PR firms have expanded their entries for the 2007 O’Dwyer’s Directory of PR Firms which will be published in June.

Included in this total are virtually all of the 151 PR firms that documented their fees and employment totals.

The expanded entries display the logos of the firms and provide their own descriptions of their unique philosophies and specialties.

More than 2,000 PR firms are listed in the Directory which has a cross-index to their 10,000+ clients.

Publisher pays shipping for pre-publication orders.

WS MAPS CHRYSLER TAKEOVER.

Weber Shandwick is guiding Cerberus Capital Management as it agreed to acquire an 80 percent stake in Chrysler from DaimlerChrysler in a deal worth $7.4B.

The private equity firm, based in New York, will also absorb responsibility for Chrysler’s $18 billion retirement and healthcare obligations.

Peter Duda, executive VP in WS’ corporate/crisis group leads the PR effort. Duda told O’Dwyer’s that his firm has had a previous relationship with Cerberus.

The Interpublic unit, for instance, repped Cerberus in its $14B deal to acquire a 51 percent stake in General Motors Acceptance Corp.

Daimler bought Chrysler in ’98 for $36B in the so-called “merger of equals” that never panned out that way.

The German automaker will change its name to Daimler AG once Chrysler is unloaded to the private equity firm. Cerberus’ auto operation is headed by David Thursfield, a Ford Motor veteran.

KAMER EXITS MS&L FOR F-H.

Larry Kamer, North America president of Manning, Selvage & Lee, joins Fleishman-Hillard June 18 as western regional practice head and co-chair of its corporate communications group.

Based in San Francisco, Kamer will be in charge of five offices in California and Oregon.

The PR veteran led MS&L’s General Motors account and counseled blue-chips such as Procter & Gamble, Roche, Home Depot and Reebok.

Kamer and Sam Singer founded high-tech firm Kamer/Singer Assocs., which was acquired by GCI Group in ’99. Kamer assumed the presidency of GCI’s PA group following that transaction.

In 25 years, Kamer has tackled crises such as Jack-in-the-Box Restaurants’ food contamination issue, labor strife at General Motors and rumors over AIDS-tainted blood at a San Francisco hospital.

(Continued on page 7)

PENN’S CONFLICT POTENTIAL PROBED.

Mark Penn, Burson-Marsteller CEO and Hillary Clinton’s pollster, is profiled in The Nation, which hits the stands on May 16, as “perhaps the most important figure” in the New York Senator’s presidential campaign. [Penn was President Clinton’s pollster.]

Beyond his connections to Clinton, Ari Berman notes that Penn’s firm, Penn, Schoen & Berland, “polls for America’s biggest companies.” PS&B, for instance, has counseled Microsoft, Texaco, Procter and Gamble and Monsanto.

Penn’s double duty “creates a dilemma for Hillary: Penn represents many of the interests whose influence candidate Clinton—in an attempt to appeal to an increasingly populist Democratic electorate—has vowed to curtail.”

The article, which is currently online, asks: “Is what’s good for Penn and his business good for Hillary’s political career.” It is difficult to “tell where Penn’s corporate life ends and the political one begins.”

Penn has no intention of taking a leave of absence from B-M. President Bush, writes Berman, forced his top advisor Karl Rove to sell his direct mail business in `99.

Howard Paster, who was President Clinton’s lobbyist and B-M chairman, dismisses talk of a potential Penn conflict. “B-M is a lot bigger firm than Senator Clinton. There’s a whole `nother life we live.”

HASTINGS MINES SUPPORT FOR PROTEST.

The Hastings Group is providing PR support for a delegation of Appalachia citizen groups calling on the U.N. to ban “radical” forms of surface mining like the removal of mountaintops.

Hastings senior partner Scott Stapf told O’Dwyer’s the non-profit Massachusetts-based think tank Civil Society Institute is a Hastings client that is backing the work of the coalfield delegation.

The Arlington, Va.-based PR firm coordinated a press event in Dag Hammerskojold Plaza Park last week. Representatives from four groups – Save Our Cumberland Mountains (Tenn.); Coal River Mountain Watch (W.Va.); Kentuckians for the Commonwealth (Ky.), and Ohio Valley Environmental Coalition – highlighted coal industry abuses that, the groups say, have destroyed more than one million acres of forests, 500 mountains, and hundreds of miles of streams.

FREMES DIES AT 57.

Charles Fremes, CEO of Edelman’s Canadian operation, died of a heart attack on May 7. He was 57.

Fremes joined Edelman a decade ago. He had been VP-corporate affairs at Molson, Canada’s venerable brewer. He launched a drunk driving prevention program there and the country’s first corporate campaign to support HIV/AIDS research.

At Edelman, Fremes counseled the province of Ontario during the SARS crisis and advised companies like Hudson Bay and Canadian Broadcasting.

Richard Edelman remembers Fremes as a “wonderful friend” and “older brother.”

A memorial service is planned for later this month.

IPG DROPS $133M .

Interpublic reported a $133M first-quarter net loss last week, an improvement from the $182M year ago deficit. Revenues inched ahead 2.4 percent to $1.4B.

CEO Michael Roth said the firm must increase the rate of organic growth, while paring staff costs.

IPG’s organic growth posted a solid 4.2 percent increase in both the U.S. and U.K., but tanked in Continental Europe (-5.9 percent) and Asia Pacific (-4.7 percent).

The ad/PR combine posted a 7.5 percent drop in office and general expenses to $495M due to reduced professional fees related to its restructuring efforts.

Roth promises to invest in both emerging markets and the digital category. He believes IPG’s turnaround plan remains on target.

Weber Shandwick, GolinHarris, MWW Group and Rogers & Cowan are IPG’s key PR holdings.

AZAR BECOMES LILLY’S PR CZAR.

Alex Azar, who until Feb. 3 was deputy secretary of Health and Human Services, has joined Eli Lilly & Co. as senior VP-corporate affairs and communications.

He is responsible for government relations, corporate branding, PR and will spearhead the $16B drug giant’s effort to curb the flow of counterfeit medicines.

At HHS, Azar handled Medicare/Medicaid, disease prevention, research, food/drug regulatory, mental health and emergency preparedness issues.

Previously, he was general counsel at HHS, partner at Wiley, Rein & Fielding and clerk for U.S. Supreme Court Justice Antonin Scalia.

Azar succeeds Anne Nobles, who becomes VP-compliance and enterprise risk management. She is a 16-year veteran of the Indianapolis-based company.

HILTON/MINTZ GET BACK TOGETHER AGAIN.

Socialite Paris Hilton has rehired longtime publicist Elliot Mintz five days after firing him for “miscommunicated information” about her right to drive in California with a suspended license.

Mintz told gossip site, TMZ, that they agreed to “continue our professional relationship.” He will “continue to respect and support her as her media rep and friend.”

Hilton is looking at 45 days in jail for violating the terms of her probation in her alcohol-related reckless driving case.

Mintz, in a statement on May 6, said he told Hilton that she could drive on “work-related” matters. That was the impression he got from Hilton’s attorneys.

The publicist was “deeply and profoundly sorry” for telling Hilton it was all right to drive in certain circumstances. He expressed “sadness over the ruling of the judge and the irrational sentence he imposed.”

Hilton is to report to jail on June 5. Her attorneys are appealing the sentence.

The New York Times profiled Mintz in a “Walking Ms. Hilton” profile last August.

The paper called Mintz, who also repped Bob Dylan, John Lennon and Yoko Ono, Hilton’s “press agent, quasi bodyguard and all-around hand-holder.”

OTTAWAY RIPS MURDOCH.

News Corp.'s Rupert Murdoch would destroy the journalistic integrity of the Wall Street Journal if he acquired control of the paper from Dow Jones & Co., according to Jim Ottaway, who sold his regional newspaper chain to DJ&C in 1970.

The online version of the WSJ posted a statement from Ottaway in which he attacks Murdoch's practice of pushing his "personal, political and business biases through his newspapers and television channels." That's because Murdoch is steeped in the Australian-British media tradition, according to Ottaway.

Murdoch's New York Post, in Ottaway's view, "regularly runs biased news stories and headlines supporting his friends, political candidates and public policies and attacks people he personally opposes."

Ottaway offers News Corp.'s Fox News, which is headed by former Republican strategist Roger Ailes as a "unique example in American broadcasting in which one man's political opinions have become the editorial and news policy of a major national news channel."

Ottaway accuses Murdoch of always putting business before journalism. He charges Murdoch with kowtowing before the Chinese communist government to allow market access for News Corp's Star TV broadcasts. He doubts the WSJ under Murdoch's ownership would be free to criticize China's government.

Ottaway dismisses Murdoch's "charm offensive of public media interviews" designed to woo DJ&C's controlling Bancroft family into approving his $5B takeover offer. He also notes that Murdoch is 76 years old. "His promises no matter how sincere, will not last very long. Who will keep his promises in the future? Rupert Murdoch is a remarkably vigorous man, but he is not immortal."

The Ottaway family controls a 6.2 percent stake in DJ&C.

News Corp. dismisses Ottaway's letter as relying on "tired misconceptions and clichés." Its execs would like to meet with Ottaway to sort things out.

FIRMS WORK THOMSON/REUTERS DEAL.

Brunswick Group and Finsbury are guiding the $17.5B merger of Thomson Corp. and Reuters Group to create an entity called Thomson-Reuters, which would be the No. 1 supplier of electronic news and financial data.

The combo is expected to result in $500M in synergy savings over the next three years. The partners remain wary that the merger can be pulled off since it is a "large and complex transaction." There also is a thicket of regulatory issues to overcome.

Thomson CEO Richard Harrington, 60, who guided its transformation to a electronic/software powerhouse, will step down in the aftermath of a completed merger. Reuters chief Tom Glocer, 47, will assume the helm of the combined entity.

Thomson's offer represents a 43 percent premium to what Reuters shares were trading before its announcement of an acquisition interest.

Thomson uses Finsbury's James Leviton to deal with the U.K. press to supplement the work of Jason Stewart (VP-media relations) and Frank Golden (VP-IR), the duo are located in Stamford, Conn.

Brunswick's Nick Claydon is helping Miriam McKay, Reuters' global head of IR, on the transaction.

ALBRECHT OUT OF HBO.

Chris Albrecht, who is responsible for the rise of cable programmer HBO, has resigned as chairman/CEO of the Time Warner property following his arrest for assaulting a girlfriend in a Las Vegas parking lot earlier this month.

At first, Albrecht planned a leave of absence to deal with alcoholism, but TW announced May 9 that he agreed to "no longer serve as chairman and CEO of HBO effective immediately."

"With great regret," Albrecht honored TW's request that he step down at HBO because he recognized that he could not allow his "personal circumstances" to distract him from business.

TW dismissed Albrecht following a same-day Los Angeles Times report that HBO paid $400K to settle a battery case brought against Albrecht by another girlfriend 16 years ago.

Albrecht became HBO's programming head in `95 and CEO in `02. The 54-year-old executive is credited with the development of "The Sopranos," "Sex and the City" and "Six Feet Under."

HBO's COO Bill Nelson is taking over for Albrecht on a temporary basis.

MCCRACKEN BACK AT PC WORLD.

Harry McCracken, who resigned as editor-in-chief of PC World earlier this month because of editorial differences with management, is back at the magazine.

Colin Crawford, PCW CEO, has returned to a corporate position at parent IDG, where he will concentrate on strategy as executive VP-online.

McCracken, a 16-year veteran of IDG, reportedly stepped down after Crawford tried to kill a story about Apple and its CEO Steve Jobs.

He returns to the e-i-c post after receiving a promise of full editorial autonomy.

IDG is looking for a new CEO of PC World and sister pub, Macworld.

QUADRANGLE TIPPED AS DENNIS BUYER.

Quadrangle Group, the investment firm of former New York Times reporter Steven Rattner, is the front runner to win the auction for Dennis Publishing.

Women's Wear Daily reports that Quadrangle is leading the bidding contest, which includes offers ranging from $200M to $250M, for the owner of Maxim, Stuff and Blender.

Elevation Partners and Veronis Suhler Stevenson reportedly are among potential bidders for DP. Final bids are expected within a month.

Following the Times, Rattner founded Morgan Stanley's comms. group and was deputy CEO of Lazard Freres.

He launched Quadrangle in ’00. It has a $3B investment in media and communications companies.

(Media news continued on next page)

‘GOOD NEWS’ COVERS SINKS STOCKS.

A positive cover story in BusinessWeek, Fortune and Forbes is a good sign that a company's stock will soon lag, according to The Economist.

The British weekly reports "good news" companies lagged "bad news" counterparts by a 12.4 percent to 4.2 percent margin during the 500 trading days after the magazines hit the stands. Stock of the good news companies had outperformed the "baddies" in the 500 trading days prior to the stories.

The Economist believes the results show that "if news is sufficiently good or bad to catapult a company onto a magazine cover, then it is already reflected in its stock price.

Tom Arnold, John Earl and David North, authors of the survey that studied magazine covers over a 20-year period, surmise: "positive stories generally indicate the end of superior performance and negative news generally indicates the end of poor performance."

Their study, "Are Cover Stories Effective Contrarian Indicators," ran in the Financial Analysts Journal.

DISNEY ROPES IN KIDS ONLINE.

Walt Disney Co. has unveiled Disney Xtreme Digital, a social networking site aimed at pre-teens. Users will have access to games, videos and music files, and can establish a personal page similar to MySpace.

Disney promises the site will allow parents to monitor their kids' use and there is also a feature that limits going beyond content that is offered by Disney.

Paul Yanover, executive VP and managing director of Disney Online, told Reuters that he wants “tons of kids immersed in my brands and franchises. What better marketer do I have than a kid?”

EXPERTISE, CHARISMA BREED TV SUCCESS.

TV programs rely on vibrant personalities for success, said an April 19 Publicity Club of New York panel of cable TV producers.

"It's all about client personalities and access," said Jeanne McHale Waite, vice president and general manager for Atlas Media Corp., a New York-based non-fiction television production company that creates shows for many popular cable networks. "You give us a personality and we can find a way to access that expression."

Ideally, McHale Waite said an expert's knowledge combined with a star-like charisma is the personality combo networks look for when coming up with new show ideas.

Though this gimmick may seem simple enough, it's the stuff programming is made of: every show from American Idol to the litany of cooking programs uses a variation of this formula, and a producer's ability to perfect this recipe is a work of art.

"We need experts for absolutely everything," she said. "Pop culture, trend people, futurists, food gadgets – you name it. We're looking for energetic people you can hang your hat on."

Alex Campbell, vice president of development for the Fuse Network, offered a three-part formula for pitching his company. "Does it have a voice, is it rock 'n roll, and will it cut through the cable landscape? These are the questions you need to ask before you come to me with an idea."

Fuse, a music video-oriented channel similar to MTV, produces shows Campbell describes as "smart done stupid, stupid done smart." It's a formula that's often viewed as risqué (or maybe passé) among fellow networks, but it's made a splash among the coveted demographics of teenage viewers, causing the nascent network to grow from its humble beginnings to currently staffing a full-service development department.

"A lot of people are scared of what I do. Ad reps roll their eyes when we have meetings together," he said. "But it works and we have an advertising market to prove it."

Cable TV’s changing landscape

Times have changed for cable television, a fact the panel noted as one of the key reasons PR pros have such a hard time landing successful pitches. Politics, technology, FCC regulations and new business models have vastly transformed the industry, and understanding this new landscape is a vital part of finding success in it.

Steve Schwartz, president of New Harbor Entertainment, offered a brief overview of the TV broadcast industry as a primer for publicists who are new to the medium. Before the advent of cable, all television shows were developed by the networks that hosted them, Schwartz said. Nowadays, it isn't uncommon for cable networks to farm out all of their production duties.

Cable networks are constantly in search of shows to fill timeslots, so publicists with fresh ideas are a vital component to production houses like New Harbor. However, Schwartz warned that pitching production companies who lease out their work means understanding a business model steeped in company politics.

"We're out there hustling and selling and we really need ideas. We're a constant supplier of programming and we look to people like you to do it," Schwartz said.

"But you have to be wary when you pitch something. No matter how good the idea may seem, it may cause some problem between ad sales and the producer.”

Schwartz believes the answer lies in developing a consensus with cable networks to know what ideas would be acceptable for their company.

Michael Kaufman, vice president of development and production for Al Roker Entertainment, said he's used more ideas from PR pros in recent years, and cited the evolution of good pitches in the industry as one of the main reasons for this phenomenon.

"I've been hearing more and more from publicists. Traditionally, our agents will solicit talent, but now I'm noticing more and more publicists coming to our office and they're bringing the talent," he said. "We're seeing really polished pitches.” Kaufman suggested keeping the medium in mind when pitching TV networks and to remain visual.

The panel, hosted by PCNY president Peter Himler, said most cable networks are currently looking to add an online component for many of their shows, and advised PR pros to take advantage of the void in content.

Financial reports loaded with spin and sell were put out last week for Omnicom and PRSA.

There are many positives in both reports but the exclusion of important negatives makes them false and misleading.

Omnicom, whose PR firms (Fleishman-Hillard, Ketchum, Porter Novelli, etc.) had $1.2 billion in fees in 2006, had a great first quarter and its finances for calendar 2006 were just fine, according to analysts who track the stock. All of them are doing business of one sort or another with OMC.

OMC delivered a “blowout” Q1 with organic revenues up 7.3%, said Merrill Lynch. It called OMC the “High Quality Leader” and said some of its peers had “weaker U.S. organic growth” in Q1.

Net new business was up 30% in Q1 to $1.3 billion and Q2 has started out “strong.”

ML expects OMC, currently $104, to hit $117 based on expected growth of about 10% in 2007.

Equally enthusiastic was Lehman Brothers, which raised its “target price” from $120 to $123. OMC has met or topped Wall St. expectations of earnings-per-share in 18 of the last 20 quarters, it notes.

All of the above is true but analysts we pay to help us understand OMC, WPP, etc., (because they don’t discuss their finances with the press) made some different observations. “OMC has a lot of debt...it’s probably paying its vendors at the last minute,” said one. Payables rose more than $1 billion to $7.3B as of Dec. 31, 2006 and exceed receivables by $1.3B. OMC has negative working capital of $649M. Long term debt was up $995M to about $3.1B. Shareholders’ equity fell $77M to $3.87B. It cost OMC $5.6M in interest and penalties for tax positions that were disallowed. How much in earnings were involved is not told.

OMC carries $6.85B in “goodwill,” meaning the amount it paid for acquisitions above cash and other assets. It says, as usual, that there has been no impairment of these assets. Theoretically, it could sell some of the acquisitions and cash out. Since “shareholders’ equity” of $3.87B includes the $6.85B in goodwill, OMC has negative “tangible net worth” of minus $2.9B. To keep the stock above $98 and discourage bondholders from converting to stock, it spent $1.34B in 2006 to buy back 14.8M of its own shares. The float is now down to about 167M from 187M. Lehman expects share buybacks to cost $826M in 2007 and $874M in 2008. It spent $451M for 4.3M shares in Q1, surprising Lehman which expected the total to be 1.75M. Despite the steady growth, OMC stock is still below its high of $107 on Dec. 17, 1999. CEO John Wren, who was paid $13.2M last year, owns 486,086 shares worth $50M and has options exercisable within 60 days on 3,700,000 shares worth (in total) about $377M.

Wren’s costs per share vary from $24 to $91 and include 1.5M in options at $79.50 that vested in full on April 4, 2007 (worth a net of $30M to Wren). He’s well paid for a CEO whose stock is below its 1999 high.

PRSA CEO Rhoda Weiss announced that net assets rose 7% to $2.82M, “the highest level in the Society’s 60-year history.” Revenues grew 12% to $11.46M. Seminar income spurted 38% to $1.13M while costs rose only 11% to $300,470. The annual conference grossed $1,361,738 and “netted” $283,925. Cash/investments rose 54% to $4.52M.

Weiss stressed such positives but left out the fact that payables rose 76% to $1.36M. PRSA simply didn’t pay a lot of its bills and hung onto the cash, which is what OMC does. Bragging about “record” net assets is uncalled for since PRSA is counting as assets about $2M in dues it has received but hasn’t yet earned. Real net assets (as almost all other groups count them) are about $800K which is very thin for a group with expenses of $11.2M. The net on $11.46M in revenues, which Weiss doesn’t mention in her statement, was $195,429 or 1.7%.

The conference did not “net” $283K because PRSA has again left out staff costs of more than $1.5M. “Administration” costs of 13 programs are now lumped together and rose to $3.18M in 2006 from $2.65M in 2005. Thus far, the complete audit, which includes a detailed look at spending in 17 categories, is being withheld from members. We asked a couple of directors to help us get this but they refused to buck leadership.

Some senior PRSA members at the May 4 lunch for COO Bill Murray in D.C. (4/9 NL) were astounded that not a single question came from the 60 members present. Murray, who was making his first public appearance, read from a text while the members were eating and finished well before lunch was completed. Only silence came from the audience for the next half hour. Nor did he ask for questions. Here’s the explanation: Reporter Christine O’Dwyer was in the audience taking notes and recording the speech (although a member asked her not to). Her presence “froze” the audience and Murray. Neither could handle being “on the record.” At last year’s Assembly, our presence “froze” the delegates when bylaw changes came up for discussion on the COO being president and more power being given to the Assembly. There was no debate at all and two brief comments on the CM proposal. A long debate took place in the a.m. when proxy voting came up and we were not present...more than 1,000 journalists have been killed in the past ten years while on duty but we don’t hear this issue being taken up by either U.S. or international PR groups, although their members work with journalists. Many journalists face tyrannical regimes that can’t tolerate criticism. Business organizations often behave the same way...Fortune mag is preparing a feature on the 25th anniversary of the Tylenol murders that we hear will support Tylenol as “PR’s No. 1 crisis success story.” ...the final years of PR queen Denny Griswold, who was blocked from seeing friends in the last years of her life, may be made into a movie. PR friends were unable to get through to her. She was heartbroken that her friends had apparently deserted her.

They hadn’t but they didn’t have the drive to get through to her, either.

--Jack O'Dwyer