PN LANDS $4.5M S.D. AIRPORT EXPANSION

Porter Novelli has won a three-year, $4.5M contract to handle public outreach as San Diego County implements a $700M revamp of Lindbergh Field airport.

PN was one of five firms that attended a pre-pitch meeting of the San Diego County Regional Airport Authority Board in February. Katz & Associates, AdEase, Lista Design Sudios, and MNA Consulting rounded out that group, although nearly 20 firms signed on as interested bidders for the RFP.

The SDCRAA board approved PN’s contract for media relations and public outreach at its April 3 meeting. PN worked on a $500K ’07 project for the authority regarding the expansion’s environmental impact.

MEHLMAN TO KKR TO BOOST OUTREACH

Ken Mehlman, who ran President Bush’s re-election campaign and helmed the Republican National Committee, has joined private equity firm Kohlberg Kravis Roberts & Co. in a new post to head global public affairs.

Mehlman, an attorney who had recently been a partner at high-powered D.C. law firm Akin Gump Strauss Hauer & Feld, is a managing director at KKR. The company said he will focus on “constructive outreach” to the firm’s shareholders, companies, as well as governments, NGOs and other entities.

Henry Kravis and George Roberts, co-founders of KKR, said in a joint statement that Mehlman, 41, will allow KKR to expand and institutionalize its outreach as it communicates “the public benefits of private equity.” Mehlman was a field director for Bush in 2000 and was later named White House director of political affairs. After managing Bush’s re-election, he was named chairman of the RNC.

SAUDI ARABIA SLICES H&H’S RETAINER

Saudi Arabia has sliced Hogan & Hartson’s monthly retainer to $33,333.33 from $50,000 according to the lobbying firm’s revised contract with the Kingdom.

H&H has a one-year pact for legislative, regulatory and public policy work. It also advises the Kingdom on “media reports and related public affairs developments.”

The D.C. firm stands ready to take on “specific advocacy assignments” for the Saudis aimed at U.S. government officials or members of the media.

H.P. Goldfield, H&H’s senior int’l affairs advisor, is working the Saudi Arabian business. He is vice chairman of Stonebridge International, the global strategy firm founded by President Clinton’s national security advisor Sandy Berger.

IPG’S ROTH GETS 24% PAY HIKE

Interpublic CEO Michael Roth received a 23.9 percent pay hike at the March board meeting, according to the ad/PR conglom’s proxy released April 18. His salary is now $1.4M

IPG directors granted the boost because Roth had not received a raise in his $1.1M base since he became CEO three years ago. They also considered Roth’s role in the firm’s “transformation,” improvements in pre-tax earnings, operating margin, revenue growth and becoming Sarbanes-Oxley compliant. The board members also wanted to “ensure his retention.

Roth’s total `07 compensation package hit the $8.9M mark, up 16 percent from the prior year. IPG earned $167.6M in `07 vs. a $31.7M loss in ’06.

Philippe Krakowsky, executive VP/strategy and corporate relations, also received a pay boost. The board’s compensation committee increased his salary to $620K from $550K effective April 1, 2007.

SANDOR EXITS K-C

David Sandor has exited the VP-communications post at Kimberly-Clark after a brief stint at the $16.7B Dallas-headquartered tissue company. Dave Dickson is director of communications.

Sandor served as VP-PR at Home Depot, VP-corporate relations and PA at VISA USA, and VP-corporate communications at Associates First Capital Corp. prior to its acquisition by CitiGroup in 2000.

He is a founding member of Powell Tate and a veteran of Hill & Knowlton and Carl Byoir & Assocs.

On the political front, Sandor was spokesperson for the George Bush’s 1988 political campaign and communications advisor to then-Transportation Secretary Sam Skinner.

PRS BOARD VOTES O’DWYER BOYCOTT

“PR Society has decided to limit its contact with (Jack) O’Dwyer,” said an e-mail to “leaders” of the Society April 9. The letter said O’Dwyer had “stepped far beyond the bounds of accurate and professional reporting,” although it cited no specific instances of inaccuracy.

A similar boycott by the 1999 board led to cancellation of the entire PRS Code of Ethics after a member filed ethics charges against the 17 board members.

Rather than adjudicate the charges, as provided in the bylaws, the national board adopted a new code that eliminated consideration of charges against individual members.

(Continued on page 7)

‘PRO-PEACE’ JEWS FORM D.C. GROUP

A group of liberal Jewish Americans frustrated by “far-right” pro-Israel sentiments in the U.S. have formed a lobbying and political action committee in Washington, J Street, to advocate in Congress and the media a comprehensive peace deal between Israel and its neighbors.

D.C. PR firm Rabinowitz/Dorf Communications is handling PR for the group’s launch. The firm is headed by Matt Dorf, former Jewish liaison for Howard Dean’s presidential bid who consults for the DNC, and Steve Rabinowitz, a former Senate comms. director who was director of design and production for the Clinton White House.

“The term ‘pro-Israel’ has been hijacked by those who hold views that a majority of Americans – Jews and non-Jews, alike – oppose, whether supporting the war in Iraq, beating the drums for war with Iran or putting obstacles in the path to ending the Israeli-Palestinian conflict,” said Jeremy Ben Ami, executive director of J Street and a former Clinton Administration and Dean staffer.

J Street contends that in recent years, Jewish advocacy and lobbying groups like the American Israel Public Affairs Committee have adopted right-leaning platforms in support of Israel. The new entity wants to reignite talks for a two-state solution to the Israeli-Palestinian conflict. Its PAC arm will raise money and endorse political candidates in the U.S., which the AIPAC does not do.

Supporters include ex-Sen. Lincoln Chafee (R-R.I.), ex-Rep. Thomas Downy (D-N.Y.), Eli Pariser, executive director of MoveOn.org, and Markos Kounalakis, president/publisher, The Washington Monthly.

BRUNSWICK GUIDES DELTA-NW MERGER

Brunswick Group is guiding the Delta/Northwest Airlines merger to create the world’s biggest carrier and “America’s premier global airline.”

The deal is pitched as a “win-win” situation that helps offset rising fuel costs and increased competition triggered by the “Open Skies” treaty.

Delta CEO Richard Anderson will direct the $35B giant that will carry the Delta name and employ 75,000 people. Northwest CEO Doug Steenland will become a director of the merged entity, but have no daily management role.

The new airline will be based at Delta’s current Atlanta headquarters. It promises to maintain “executive offices” in the Minneapolis/St. Paul area where Northwest is headquartered.

The deal faces opposition from the pilots’ union at Northwest which fears job cuts. (Legacy carriers have shed 150K workers since `01, a period in which they lost more than $29B.)

Brunswick’s Steve Lipin and Cindy Leggett-Flynn are promoting the Delta merger.

WS AIDS HARRY POTTER SUIT

Weber Shandwick is providing PR counsel to Warner Bros. Entertainment in the global entertainment company’s suit with author J.K. Rowling to stop a Harry Potter reference book from being published.

WS’ corporate and entertainment practices in Los Angeles handle ongoing issues work for Warner Bros. around the globe, David Shane, SVP who heads those units, told O’Dwyer’s.

Warner Bros. owns the trademark and movie rights to the Harry Potter franchise. The company and Rowling have sued RDR books of Michigan, which plans to publish an encyclopedia of Harry Potter terms.

RSR’s planned book “provides no analysis and virtually no commentary. It takes far too much and it offers precious little in return,” said Rowling, in a statement distributed by WS.

Rowling, who said she is working on her own Potter encyclopedia, testified in the case to much media fanfare in New York on April 14.

RDR is arguing that its book, “Harry Potter Lexicon,” constitutes fair use of Potter material. Publication of RDR’s tome has been suspended pending the outcome of the Rowling-WB suit.

The Potter films distributed by WB generated $4.5 billion at the box office. More than 400 million copies of the books have been sold.

CONSTELLATION CREATES EX AFFAIRS POST

Alcoholic beverage marketer Constellation Brands has brought in an aide to Sen. Diane Feinstein (D-Calif.) to fill a new external affairs post focused on the western U.S.

Michael Walker, who has been a field representative for Feinstein since 2000, takes up the role of VP of external affairs based in Constellation Wines’ office in San Francisco. He handles government relations, management of the company’s PAC contributions, and relations with trade groups and peer companies.

Constellation markets more than 300 brands including Corona, Robert Mondavi, and Svedka Vodka. It is the largest winemaking company in the world following several acquisitions over the last few years.

Walker reports to Jim Finkle, senior VP for external affairs. Finkle noted California’s importance to the company’s winemaking business, its status as the state with the largest consumer population, and issues like the environment, land and water use, and international trade that are key to stakeholders there.

Walker served in the Dept. of Health and Human Services during President Bill Clinton’s second term. CB is based in Fairport, N.Y.

M&S LANDS $1M ROAD PR PACT IN TX

Martin & Salinas Public Affairs and community engagement firm Rifeline picked up a $1 million contract to handle PR for road bond projects in Williamson County, Tex., part of the Austin-Round Rock region of the Lone Star State.

TateAustinHahn, McMichael & Co., and Ledbetter & Associates also pitched for the work.

Both Rifeline and M&S are based in Austin.

The size of the contract has been criticized by some citizens and political rivals of the Republican county commissioner. The county says it doesn’t have enough staff to educate residents about road projects, according to the Austin American-Statesman.

The contract includes media relations, events support, and community briefings.

GANNETT Q1 REVENUES SLIP

Gannett posted an 8.4 percent slide in first-quarter revenues of $1.7M compared to $1.8M in Q1 '07.

The company said a weak advertising environment in its publishing and broadcasting operations, especially in the latter half of March, hurt its operations.

Ad revenues in publishing slipped from $1.2B in '07 to $1.1B in Q1 '08. U.S. ad revenues dropped 11.2 percent, while the U.K. slipped by about seven percent.
Broadcast ad revenues fell seven percent to $170.2M compared with Q1 last year.

The slumping real estate market hurt classified advertising, but Gannet said national ads in USA Today and USA Weekend were a bright spot.

RED INK FLOWS AT N.Y. TIMES CO.

The New York Times Co. reported a first-quarter $335K loss, compared to a $23.9M profit a year ago, due to decreased ad revenues and the “effects of secular change in our business,” said a statement from Janet Robinson, CEO.

Revenues dipped 4.9 percent to $747.9M. Advertising revenues sunk 9.2 percent to $458.3, while circulation sales were up 1.9 percent to $226.7 million.

Robinson admitted to a “challenging time for the media industry,” but said she is diligently managing NYTC’s business for the long term.

The company recorded a one percent drop in operating cost, which is the fifth straight quarter of decline.

Robinson noted that the rate of advertising decline in April improved to “mid-single digits. That improvement is due to “shifts in the timing of Easter and in the publication of Key Magazine.

The NYTC’s About Group, its online properties, registered a $9.5M operating profit on $28.1M revenues during the quarter. Its news media operations posted a $13.3M profit on $720M revenues.

NYTC said it had the 11th largest presence on the web with 50.4M unique visitors in March, up from 43.5M in ’07. NYTimes.com grew to 18.9M unique visitors, up from 14.5M in ’07.

The Times is cutting its newsroom count by 100 staffers.

GAY ADULTS TAKE TO BLOGS

More gay and lesbian adults (51 percent) say they read blogs than heterosexual adults (36 percent), according to a Harris Interactive/Witeck-Combs Comms. survey.

Harris noted a similar survey in November 2006 found only 32 percent of gay and lesbian adults said they read blogs.

Slightly less than one-third of gay and lesbian people said they posted a comment on a blog in the last month, compared with 19 percent of heterosexuals.

Of the blogs they said they have read, 23 percent of gay and lesbian people said they read political blogs, compared with only 14 percent of heterosexuals.

About one-fifth (19 percent) of G&L adults said they" felt positive" toward advertisements, compared with eight percent for heterosexuals. That was down slightly from the '06 study of 21 percent.

A large percentage - 57% - of gay men said they belong to a social networking site, compared with 37 percent of heterosexuals.

The survey polled 2,733 U.S. adults in March.

BW ANALYZES CHINA’S PR WOES

The April 28 BusinessWeek asked MWW Group’s Michael Kempner, Abernathy MacGregor’s Jim Abernathy and Sitrick & Co.’s Michael Sitrick on how they would advise China about its Beijing Olympic Games crisis.

Kempner recommends China organize an international panel on Tibet. That would at least show the world that China is willing to discuss Tibet.

He suggests reaching out to human rights groups and show them that China has made some progress on the rights front.

Kempner said China has “little understanding of the art of image-crafting.” He also believes the best PR in the world cannot “overcome geopolitical realities.”

Abernathy told BW it’s easy to “hate the Chinese Government, but it’s a lot harder to dislike individuals.” He suggests China round up a “couple of sweet 19-year-old gymnasts” and some attractive English-speaking women and put them on the talk show circuit.

“We’ll have the Chinese version of gymnast Mary Lou Retton do flips on camera but provide only noncommittal answers on the conflict,” said Abernathy. His point is to “change the subject, making it a personal rather than a geopolitical thing.”

Sitrick would scour the press, look for inaccuracies and aggressively set the record straight.

The Chinese should address the controversy on “60 Minutes” and then launch a full-court press with Olympians explaining what the Games mean to them.

Sitrick noted a possible fallout: a “backlash against the protestors.”

GAWKER UNLOADS THREE BLOGS

Gawker Media publisher Nick Denton has sold three of his sites – music industry site Idolator; Gridskipper, an urban travel blog, and D.C. gossip site Wonkette – as the blog CEO said he expects a downturn.

Idolator was sold to Buzznet, a music-focused social network. Gridskipper is being taken over by Curbed, a network founded by Gawker alum Lockhart Steele in which Gawker Media is a shareholder.

Wonkette has been spun off to managing editor Ken Layne and will be part of the Blogads network of sites, which includes Daily Kos.

Denton said in an email that all three sites had editorial success, but that “someone else will have better luck selling the advertising than we did.”

On Wonkette, once of GM’s more recognized properties, Denton said he has been expecting a downturn since the middle of 2006, when GM sold off its Screenhead blog and pulled the plug on another blog, Sploid.

“And, even if not, better safe than sorry, and better too early than too late,” he wrote.

(Media news continued on next page)

PEN STEPS UP CHINA RIGHTS CAMPAIGN

The Pen American Center, the human rights organization of writers, will have an empty chair onstage at each of its programs during its New York Festival of International Literature slated for April 29 to May 4.

The chair symbolizes Pen’s campaign to pressure China to free before the beginning of the Beijing Olympics the 38 writers and journalists imprisoned for their writing.

Pen’s “We are Ready for Free Expression” campaign is a take on China’s “We Are Ready” slogan to build public support for the Games.

The group will honor Chinese dissident writer Yang Tongyan, who is serving a 12-year prison term, at the April 28 kick-off gala set for the American Museum of Natural History.

Yang was charged with posting anti-government articles on the Internet and accepting funds to transfer to family members of jailed dissidents.

His lawyer, Li Jianqiang, has been invited to accept Yang’s award. Chinese officials revoked Li’s law license for representing dissidents.

China is looking for a PR firm to buff its image.

THOMSON, REUTERS FINALIZE MERGER

Thomson Corp. consummated its nearly $16 billion acquisition of Reuters on April 17.

Tom Glocer, seven-year CEO of Reuters, hems the New York-based combined entity, known as Thomson Reuters Corp. and spanning business from financial and investment services to news gathering and bond-trading operations. Thomson CEO Richard Harrington is retiring. The new company tops Bloomberg as the largest company based on share of the financial information market.

Reuters has nearly 200 news bureaus, which are being integrated with Thomson’s North American and European operations, known as Thomson Financial News and AFX News, respectively.

The company trades as TRIL on the London stock exchange.

HEALTH MAG INSERT GOES METRO

Publication Services of America, which markets newspaper-insert magazines, said it will launch its first metro edition of Better Health & Living in Minneapolis-St. Paul on April 26 via the St. Paul Pioneer Press.

The magazine (which does not run advertorials) will cover local and national health content with a 20-80 percent split, respectively. The first issue will run 68 pages with an initial circulation of 65K, with another 20K sent to select neighborhoods.

Regular features include healthy eating; weight loss, fitness fun; health-related products; raising fit and happy kids, and alternative medicine.

Editor-in-chief is Susan Flagg Godbey, former editorial creative director at Prevention magazine. Writers include Kay Harvey, former reporter for the St. Paul Pioneer Press; Adrienne Greer Foley, Sheila Mulrooney Eldred and Sara Aase.

Briefs________________________________

washingtonpost.com has added news preview program Apture to two of its blogs. The Apture platform allows readers to browse related content like videos and articles without leaving the web page they are on. The site is the first to use the platform and features it on political blog The Fix, blogs.washingtonpost.com/thefix/, and entertainment blog Celebritology, blogs.washingtonpost.com/celebritology.

People ___________________________

Rebecca Dolgin, executive editor of Life & Style, has been named VP and executive editor of The Knot’s print properties. She was previously fashion director at All You magazine and senior editor at More and Parenting Magazine.

Sally Jones, director of networking programming for Hearst Digital Media, was named VP/executive editor of The Knot’s online sites. She was previously with Time Inc. for four years, serving as site editor of Parenting.com and AOL Parenting. She previously was site director for Meredith Corp.’s AmericanBaby.com and HealthyKids.com, and was senior producer for Disney’s Family.com. The Knot said the appointments support its expansion beyond weddings, to include pregnancy and first-time parents.

Pitch Tips: Marcella Isaza, entertainment producer at Associated Press TV News, wants pitches about “artists or actors that are important to the entire world.” That’s what she told Entertainment Publicists Professional Society’s minority media editors panel at an April 17 workshop in Hollywood. Isaza wants to receive notice two weeks in advance of an event and a music video of the artist. The producer covers red carpet events, award shows, film, TV, music, fashion and features. She also handles Latin broadcast coverage for the western U.S. Isaza reminded the publicists to “keep in mind the essentials of lighting, noise and deadlines for shooting.” The beauty of an APTV “hit:” “half the planet will hear or see it,” according to Isaza at [email protected].

Antonio Mejias-Rentas, entertainment editor at La Opinion, the nation’s largest Spanish language paper, reads several hundred emails between 7 and ten in the morning and from 6 to 8 during the evening. The Spanish language is “the major driving factor in the television reporting that La Opinion does. To a lesser degree, we cover Latinos who are doing things in English,” said Mejias-Rentas. La Opinion recently transformed its “daily entertainment-only section into the new Hola LA, which now includes lifestyle features, food, fashion and health. Email is [email protected]. Jorge Usatorres, morning show producer at Latino 96.3 FM KXOL, believes many publicists do not pitch him because they think he is looking only for a Spanish language story. “We can take a small story, and spin it into a big one,” he said. “Our audience just doesn’t live in Compton and speak Spanish.” His email is
[email protected].

The PR Society’s latest boycott against us (page one) opens a Pandora’s box for PRS.

It would not have been instituted if leaders knew what happened after the 1999 boycott.

Not only did 20 veteran PRS members blast the boycott, but a member filed ethics charges against the entire board. The board had to destroy the old code and create a new one at a cost of $197K or face being tried by a judicial panel.

The new code was just a re-write of the old one absent enforcement. The national board could have just removed Articles 15 and 16 (relating to the power of judicial panels to “hear complaints” and “conduct proceedings”) and saved $197K.

The panels had a lot of power. Members were “obligated” to appear if called. Charges against the 17 directors seemed reasonable. “There is no rational way the boycott can be construed as dealing fairly with members and giving respect to free inquiry,” said the complaint.

Also facing the board was the problem of treasurer Lee Duffey’s firm being hit with well-publicized charges that it was creating anti-EIFS front groups in behalf of other construction materials.

The boycott was announced in April of 1999. The complaint was filed in May. In August, ethics chair Bob Frause sent a 12-page memo to 400+ leaders saying that over the past 3-6 years there had been a “serious change” in attitudes of PR pros and PRS members regarding ethical practices.

He claimed lawyers were now showing up to defend the accused who were fighting any charges and that a new and “workable” code was needed.

What had happened was that “serious” charges had been made against the board. Lawyers had been showing up for decades (Franco, Harrison and Pincus cases as described on P. 7). The accused had always fought charges. The Frause report was a smokescreen to distract attention from the board’s alleged ethical violations and the Duffey issue. The report posed 28 ethical topics not including the ethics of a press boycott and only asked if members should be forced to identify “front groups.”

Since this bullet was dodged, the 2008 board had nothing to guide it when it disclosed April 9 that it would “limit its contact with (Jack) O’Dwyer.” Actually, no PRS CEO had talked to us since March 20, 2006, when Cheryl Procter-Rogers told us not to call her again. She had asked us (via a letter from PRS’ law firm) to withdraw our statement that PRS was mis-informing members by not deferring about $2M in dues income. Instead, three accounting professors, provided with the PRS financials, agreed that deferring dues would be right for PRS.

What was our crime in 1999? That year was a tumultuous one for PRS. For the first time, members who were not even on the board, Kathy Lewton and Michael McDermott, were nominated for chair-elect and treasurer, respectively. Treasurer Lee Duffey, passed over although treasurers usually got to be chair-elect, ran anyway and lost. The board rejected the unanimous advice of the first strategic planning committee to remove APR throughout the bylaws. A $150K PRS/Rockefeller “believability” study ranked PR pros 43rd on a list of 45 sources. Tactics was not allowed to print the table. It carried nothing on a two-year Fellows study that found little regard for APR among recruiters. The executive committee voted COO Ray Gaulke a five-year contract starting in 2000 that lasted only one year and cost PRS $250K to settle.

We had also completed a ten-year study of PRS’s finances that raised questions including why was the deferred dues account drawn down from $904,767 in 1991 to $169,530 in 1995? Why was the Counselors Academy charged $165,954 for “travel” in 1990 when it usually spent only $15-$25K? Academy leaders denied unusual travel. The APR program lost $329,000 in1999, meaning it cost $1,413 in subsidies to create each of the 233 new APRs that year. There was a loss of $2.9M on APR from 1982-2002. The APRs were riding high at PRS, splurging on APR and conducting “attack PR” on us. We were banished for reporting facts and asking questions. The APRs had us roped off in a “pen” at the back of the 1999 Assembly, supervised by a uniformed guard. Waltz warned us that setting one foot outside that area would get us evicted for the day. Waltz was in U.S. Army Counterintelligence from 1967-70 and we concluded such tactics were being used on us.

PRS politics aside, the main issue today is that the members want back their printed directory, much preferring it to the annual conference that few attend (4% of members is PRS’ own statistic). A poll on odwyerpr.com which asked PRS members if they would prefer to keep the directory or keep the conference, drew 85%-15% in favor of the directory. Members have told us that for two years. Neither PRS nor any of the 110 chapters dares to conduct such a poll. Rank-and-file members will have to organize themselves to get back their directory. Their leaders have abandoned them for “politics.” Warning to anyone who borrows a member’s codes: unauthorized hacking is a crime.

Stonewalling pays. Philippe Krakowsky, XVP/strategy and corporate relations, Interpublic, got a pay boost from $550K in 2006 to $620K in 2007. CEO Michael Roth got a 24% jump to $1.4M, both being rewarded for good performance. IPG stock is about $8.25 vs. its all time high of $57. Krakowsky’s pay was based on “research” on similar posts which no doubt includes Patricia Sloan at Omnicom, and Fran Butera, Kevin McCormack and Feona McEwan at WPP. None of the above have answered our questions for years...Forbes did a mostly positive piece on WPP’s Martin Sorrell but failed to mention its huge debt ($6.63B on revenues of $12.3B), which is more than half of revenues. Debt/equity ratio is .83. The debt of WPP, OMC, IPG and Publicis is about $12B.

--Jack O'Dwyer