HUGHES JOINS B-M

Karen Hughes, who was communications director for President Bush and U.S. propaganda czar, has joined Burson-Marsteller as vice chair.

The 51-year old Texan will team with Mark Penn, B-M CEO and former pollster for Hillary Clinton’s Presidential bid, to offer one-stop crisis and public affairs services.

Hughes served as Under Secretary of State for Public Diplomacy from `05 to `07. As counselor to President Bush, Hughes managed the White House Offices of Communications, Media Affairs, Speechwriting and Press Secretary.

She consulted the `04 Bush-Cheney re-election campaign and worked with Bush for five years when he was Governor of Texas.

Austin-based Hughes will serve on B-M’s newly created strategy team.

GEORGIA TAPS H&K AFTER REVIEW

Georgia has awarded its first recycling PR account to Hill & Knowlton after a competitive RFP process that drew 15 proposals to a lucrative RFP. H&K’s pact with the Peach State is worth more than $743K for 12 months and includes four option years. It aims to cut down on the 2.6M tons of common recyclables that Georgians toss out each year.

The state’s Dept. of Community Affairs – Office of Environmental Management will oversee the pact, which it hopes to roll out by the first quarter of its 2009 fiscal year.

The Atlanta operations of Edelman, GolinHarris, and GCI pitched, as did PR firms based in the city like Cookerly and Tedco Worldwide.

H&K’s Tampa office led its pitch.

KOMISARJEVSKY ADVISES EDELMAN

Chris Komisarjevsky, former CEO of Burson-Marsteller, is now a strategic advisor to Edelman CEO Richard Edelman. He also will serve pro-tem chair of Edelman’s global corporate practice and counsel the No. 1 independent firm’s leadership development program.

Komisarjevsky stepped down from B-M in `05 after more than six years at the helm. Most recently, he was senior counselor at APCO Worldwide.

Edelman praised Komisarjevsky as “one of the most accomplished counselors” in the PR profession.

Komisarjevsky will “advance the quality of our c-suite interactions, according to Edelman’s statement.

KEKST HANDLES STEVE & BARRY’S REORG

Kekst & Co. is handling the Chapter 11 filing of Steve & Barry’s, the popular deep discount retailer that calls itself a victim of the credit crunch.

S&B features fashionable clothing priced under $10. Lines are endorsed by celebrities/sports figures such as Sarah Jessica Parker, Stephon Marbury, Amanda Bynes and Venus Williams.

The Long Island-based retailer was founded in 1985 by childhood friends, Steve Shore and Barry Prevor.

They issued a statement to say though S&B’s “strong growth and sales performance” far outpaced the industry, “tough economic times, the credit crisis and a landscape of other troubled retailers reduced the appraised value of our inventory and access to funding.” Privately held S&B claims first-month sales are up 25 percent this year.

S&B has 276 outlets. K&C’s Wendi Kopsick said no decisions have been made about store closings. The chain employs 8,600 people.

GIBSON NAMED IABC CHAIR

U.K.-based Barbara Gibson has been named chair of the International Assn. of Business Communicators.

The 20-year plus PR veteran runs SpokesComm, a London-headquartered strategic communications planning and media training shop.

Gibson is past region chair of IABC Europe and Middle East and past president of chapters in central Florida and the U.K.

At last month’s IABC conference in New York, Gibson said she wants to make the group less North America-centric. Her goal is to highlight best communications practices wherever they may be.

IABC also named Irene Monley, chair of its research foundation. She works at Tyco Electronics, responsible for global human resources communications.

SORRELL TELLS OF CONGLOM PROBLEMS

Martin Sorrell, CEO of the WPP Group, whose stock has fallen to the mid-$40’s from its 52-week high of $76.50, told the Financial Times June 30 of ongoing difficulties in trying to manage the 300+ companies in the group.

WPP is also in the midst of a hostile nearly $2 billion takeover of the Taylor Nelson Sofres research firm. TNF prefers to merge with GfK of Germany.

(Continued on page 7)

SLOANE PROMOTES PICKENS’ PLAN

Texas oil tycoon T. Boone Pickens has launched the PickensPlan program in an effort to wean this country off foreign energy.

New York-based Sloane PR is handling media relations for PP, which wants to harness domestic energy alternatives such as wind power and natural gas to reduce the dependence on energy imports. Elliot Sloane told O’Dwyer’s that his firm picked up Pickens via a reference from a “mutual acquaintance.”

Pickens urges Americans to rally around his effort and challenge the new President to unveil a program to break the “hammerlock of foreign oil” within the first 100 days of his Administration.

Pickens is putting his money where his mouth is. He plans a potential $6B outlay in Texas to create the world’s largest wind farm.

The founder of Mesa Petroleum fends off the notion that he has turned “green.” Pickens told the Guardian his business is making money, and that there is going to be a lot of money made in alternative energies.

As Mesa CEO, Pickens made his mark during the `80s via high profile corporate runs at Gulf Oil, Phillips Petroleum and Unocal.

Pickens now heads BP Capital Management, which has $4B in energy-oriented assets under management.

KELLOGG, HUNTER REVIVE HYDROX

Kellogg Company is working with Hunter PR to bring back the Hydrox brand as the crème-filled cookie marks its 100th anniversary this year.

Sunshine Biscuits first sold Hydrox cookies in 1908, three years before the main challenger, Oreos, hit the market.

As the Wall Street Journal put it in January: “For many years, the contest between Oreo and Hydrox was akin to that of Coke versus Pepsi, the Beatles against the Rolling Stones, dog people and cat people. It was not just a choice, but a declaration of identity.”

Kellogg came to own the Hydrox brand when it acquired Keebler in 2001 but it discontinued the cookies, re-branded as “Droxies,” in 2003. A grassroots movement on the Internet urged the company to bring back the cookies and Kellogg has responded with an August target date to test the market again with a “limited edition” run of Hydrox in honor of the anniversary.

ITSA WANTS PR FIRM

The Intelligent Transportation Society of America wants proposals from PR firms that are interested in promoting its World Congress slated for New York’s Jacob Javits Convention Center from November 16-20.

There will be more than 800 speakers at 200 sessions dealing with the latest developments in communications-based electronics. The Society works to apply high-tech solutions to improve the performance of the nation’s infrastructure and vehicles.

The PR firm will create messages to address issues such as safety, congestion reduction/mobility, environmental sustainability and security.

Outreach is expected to both consumer and trade media. The firm is to organize pre-show media briefings in New York and D.C., set up media tours for key ITS staffers and handle the show’s media room. Post-show publicity is geared to supplying the media with follow-up reports on the show.

ITSA’s PR firm will report to Sabrina Quirarte, director of communications. She is receiving proposals through July 18 at [email protected].

CHRYSLER REVAMPS COMMS., HR

Chrysler is realigning its human resources and communications functions and eliminating its top employee relations post following a sharp drop in sales in June. The Big Three Detroit automaker said executive VP Nancy Rae, who heads human resources and corporate communications, will lead the integration of those two functions with employee relations.

Bob Nardelli, chairman and CEO of Chrysler, said in a statement that the move is part of a long-term strategy to create “organizational synergies” for the Auburn Hills, Mich.-based company.

Chrysler said it is cutting production at a St. Louis pickup truck factory and shuttering a nearby minivan plant in response to a sales drop of 36 percent in June. Lori McTavish, who was director of corporate and internal communications, gets the new title of executive director, communications, under Rae. Four key staffers covering communications — product/brand, executive, corporate business affairs, and sales/dealer/motor parts — report to McTavish.

John Fraciosi, SVP of employee relations, will retire on Sept. 30 after 31 years and his position is being eliminated. Chrysler is owned by Cerberus Capital Management.

DUBAI AWARDS $480K PACT

The Government of Dubai’s strategic affairs committee has hired DLA Piper for a ten-month project worth $480K. DLAP is the home of former Senate Majority Leader George Mitchell, who chairs the firm’s global board.

The firm is to provide government affairs services, a task that includes contact with journalists.

DLAP partner John Merrigan, former chair of the Democratic Business Council, which represents corporate interests in the Democratic Party, and ex-Middle Atlantic chair for Kerry for President, reps the Arabs.

He is joined by Republican Ignacio Sanchez. He served on the Bush-Cheney transition team as director of policy advisory committees for the Treasury Dept. and Office of U.S. Trade Representative. He was a speaking surrogate on Spanish language media during the campaign.

Dubai also has a $25K a-month contract with Johnson, Madigan, Peck, Boland & Stewart to promote “Brand Dubai,” and a $1.2M annual pact with Levick Strategic Communications for media and stakeholder relations.

HOPKINS EXITS NASA FOR PHILLIPS

Robert Hopkins, chief of strategic communications for NASA, is stepping down to open a Washington, D.C.-area office for management consulting firm Phillips & Company.

Hopkins oversaw the offices of communications planning, education, legislative and intergovernmental affairs, and public affairs for the space agency. The Navy veteran previously held PA posts at the Environmental Protection Agency and the National Oceanic and Atmospheric Administration.

Chris Shank has been named acting chief of strategic communications for NASA. Shank is director of strategic investments in the office of program analysis and evaluation and earlier was a professional staff member on the House Subcommittee for Space and Aeronautics.

BRAUCHLI TAKES WAPO EDITOR POST

Marcus Brauchli, who was pushed out of the Wall Street Journal editor post by Rupert Murdoch, will become executive editor of the Washington Post on Sept. 8. He succeeds Leonard Downie, who announced his retirement on June 23.

Phil Bennett, managing editor of the printed Post, and Jim Brady, executive editor of the website, will report to Brauchli.

Post publisher Katharine Weymouth, 42, praised Brauchli’s “tremendous wealth of experience, both as a journalist and editor.” His job is to help the Post “navigate the new world of media.”

Weymouth, who took the publisher post five months ago, is front-runner to succeed her uncle, Don Graham, as CEO of the Washington Post Co.

Brauchli, 47, resigned from the WSJ four months after News Corp. completed the acquisition of Dow Jones & Co. He was replaced by Robert Thomson, former editor of News Corp’s Times of London.

Brauchli joined Dow Jones in ’84. He served in Hong Kong, covering China, Taiwan and the Philippines before moving to Stockholm as Scandinavia correspondent. He returned to Hong Kong in `92 and moved to Shanghai as China bureau chief in `95.

The Post’s daily circulation is in the 675K range, down from 800K in `00. Its website attracts nine million visitors each month, the No. 3 ranked newspaper site.

NBCU WRAPS UP WEATHER CHANNEL

General Electric’s NBC Universal has inked a $3.5B deal to acquire the Weather Channel and its website from Landmark Communications. It partnered with Bain Capital and Blackstone Group to cement the deal.

The WC is received in almost 100M U.S. households. NBCU will incorporate WC’s offerings in MSNBC and NBC programming. The WC will remain an Atlanta-headquartered operation.

CONDE NAST CLOSES GOLF FOR WOMEN

Conde Nast is closing Golf for Women because it does not support the goals of the magazine unit of privately held Advance Publications, according to CN CEO Charles Townsend.

The bimonthly was purchased from Meredith Corp. in ’01. GW published for a decade and was a companion to CN’s Golf Digest and GolfWorld.

Susan Reed, editor of GW has moved to the editor-in-chief spot at O, The Oprah Magazine, which is published by CN rival, Hearst Corp.

PEOPLE ____________________________

Jamila Hunter has assumed the newly created post of senior VP-programming and development, alternative & digital at NBC Entertainment. She joins from 20th Century Fox TV, where Hunter was VP-comedy development.

Earlier, Hunter worked at Bravo, launching programs like “Queer Eye for the Straight Guy,” “Project Runway” and “Celebrity Poker Showdown.”

Michele Vance, VP of marketing for RentWay and former PR and communications advisor for Aaron’s Sales & Lease Ownership, has been named editor for RTO Magazine, a bi-monthly trade pub for the rent-to-own industry. Vance, who is based in Kansas City, has contributed to the magazine and its website for several years.

FOX NEWS’ PR UNIT GOES FERAL

Fox News’ “PR machine goes feral if it doesn’t get what it wants,” wrote David Carr in the July 7 New York Times.

Under CEO Roger Ailes, FN and its “PR apparatus have waged a permanent campaign on behalf of the channel that borrows its methodology from his days as senior political advisor” to Presidents Nixon, Reagan and Bush,” wrote Carr.

Media relations is a kind of “rolling opposition research operation intended to keep reporters in line by feeding and sometimes maiming the opposition. Shooting the occasional messenger is baked right into the process.”

Carr contends that through “blacklisting reporters it does not like and planting stories with friendlies at every turn,” FN is able to live a life beyond consequences for years.

Reporters told Carr about getting e-mails from FN’s PR staff that contained doctored photos, anonymous quotes and nasty items about competitors.

A source complained to Carr about getting “smeared on the blogs” by Fox after he wrote a tough story about the News Corp. unit.

Carr writes of NYT TV reporter Jacques Steinberg, who penned a story about CNN catching up to Fox in the ratings.

“Fox and Friends” blistered Steinberg as a “trained attack dog” and showed a doctored photo of him that was similar to vintage German propaganda.

Brian Lewis, who heads PR at FN, denies his staff participates in dark ops. No blacklist exists, added Lewis, who said his department is aggressive in a passive industry.

He made it clear that FN’s PR staff is not in the business of altering photos and rejected Carr’s suggestion that the doctoring of Steinberg’s headshot could be construed as anti-Semitic. Lewis called the anti-Semitic charge “vile and untrue.”

Carr, who has a soon-to-be-published memoir out that deals with his days as a junkie and drunk, expects to be hammered by FN.

Bill O’Reilly has already called Carr a “crack addict,” which the Times columnist says at least has the “virtue of being true, if a little vintage.”

WSJ’s Mossberg Adds Fox Duties

Walt Mossberg, the influential Wall Street Journal personal technology columnist, is now a regular contributor to Fox Business News. He appears Thursday morning.

Mossberg is the first Journal staffer to have a regular perch on its sister cable TV operation.

The WSJ inked an agreement with CNBC, barring many of its staffers from appearing on Fox. That deal was signed prior to the paper’s takeover by News Corp., Fox’s parent. Mossberg was a contributor to CNBC.

(Media news continued on next page)

LAT CUTS ANOTHER 250 STAFFERS

The Los Angeles Times has announced plans to slice 250 people from the payroll including 150 in its newsroom. The news staff cuts are divided between the LAT’s 876 print and online journalists.

The paper had 1,200 journalists on its payroll at its peak in 2001. The company will employ about 3,000 people after the cutbacks. The LAT will reduce the number of pages that it publishes each week by 15 percent as part of the overhaul.

Editor Russ Stanton announced the job cuts via an internal memo. Though the `Net has greatly expanded readership of the LAT, Stanton noted that it offers advertisers more choices and that results in less ad dollars for the paper.

The LAT has been hit by the collapse of the California housing market and the poor national economy that triggered a “wave of cutbacks” through newsrooms from New York to Santa Ana, according to Stanton, who will have details about the retrenchment program by Labor Day.

NEWS CORP. KEEPS OTTAWAY

News Corp. has decided to keep its collection of Ottaway newspapers that it acquired with the acquisition of Dow Jones & Co.

The media combine has said prior to closing the DJ&C deal that it planned to study the sale of the eight daily and 15 weeklies. The Ottaway group includes Cape Cod Times, Standard-Times (New Bedford, Mass.) and the Inquirer and Mirror (Nantucket).

WYCLIFF BIDS ADIEU TO PR

Don Wycliff, who left the news business in `06, for a PR slot on Notre Dame’s information staff has resigned from the South Bend-based school.

The former public editor of the Chicago Tribune and editorial page editor for a combined 15 years says he isn’t cut out for PR.

Wycliff did enjoy teaching a journalism course, but that was only a small part of his overall ND duties.

The 61-year-old newsman also served as a member of the New York Times editorial board and was an editor at the “Week in Review” section.

He reported and edited at the Chicago Sun-Times, Houston Post and Dallas Times Herald.

SUFFOLK LIFE, TOP NUKE PLANT FOE, FOLDS

Suffolk Life, which once boasted of being the biggest weekly paper east of the Mississippi, has folded due to falling profits and the declining health of publisher Dave Wilmott.

The crusading weekly was mailed free to residents of Long Island’s Suffolk County and had a peak circulation of 545K.

Davy Levy, executive of Suffolk County, told Newsday that SL will be remembered for its “in-depth news coverage” and Wilmott’s “no-holds-barred editorials.”

Wilmott was a fierce opponent of the Shoreham nuclear plant, the $6B fully licensed facility that was shut down before generating a single kilowatt of electricity. He told O’Dwyer’s PR Services Report (February, 1990) that Shoreham, which was built on the shore of Long Island Sound, was a “time bomb” and there was no way to evacuate Long Island in the event of a disaster.

Shoreham accounted for about 10 percent of SL’s news hole, and scores of editorials that Wilmott called “strong and controversial,” but politically balanced.

The plant was fully decommissioned on Oct. 12, 1994, which ended a 25-year fight over nuclear power on Long Island, and besmirched the reputation of former New York Governor Mario Cuomo.

Shoreham’s “$6 billion price tag -- about 85 times higher than the original estimate -- had nearly wrecked the regional economy by saddling Long Island with some of the highest electric rates in the nation,” according to Newsday.

Wilmott has been ill with asthma and heart trouble, according to his son, Michael, who called SL’s shutdown a “personal decision.”

Wilmott chalked up many critics over his long career. A political blog ripped Wilmott for using SL as a “bully-pulpit for right wing law enforcement Republican enthusiasts.”

The blogger credited SL’s success with a Supreme Court ruling that allowed newspaper publishers to mail papers to people, even if they didn’t want to receive them.

EASON DITCHES DEUTSCH

Scott Eason, the main booker on “The Big Idea With Donny Deutsch,” is exploring other opportunities after almost four years of working with the adman and CNBC.

Pitches and show inquiries now go to [email protected].

HARRIS: GOOGLE HAS TOP REPUTATION

Google has completed a four-year ascent to have the best reputation in U.S. business, according to Harris Interactive’s annual “Reputation Quotient” survey and ranking.

Google didn’t even register among the top 60 “most visible” companies compiled by Harris in 2004.

Overall, seventy percent of Americans told Harris that corporate America’s reputation is “not good” or “terrible,” according to the survey, which is based on more than 20K interviews and gauges perception of companies between 2006-07.

In general terms, technology companies are seen to have the best reputations while the tobacco and oil industries are viewed among the worst. The airline industry saw the largest decline in reputation last year.

Showing the biggest gains over the last two years among Harris’ ratings were Hewlett-Packard, which rose from #38 in 2006 to #17 last year; Berkshire Hathaway, up to #6 from 21 in 2006; Intel, which rose to #3 from 16, and McDonald’s, up to #38 from 47.

Taking the hardest hits were Bank of America, which slipped from #43 to 49, Halliburton (which remained at the bottom of the ranking at #60 and saw its rating fall), Wal-Mart (from #40 to 44), Sears (from #41 to 46) and Nike (from #25 to 35).

The shaky stock market is proving especially hurtful to the ad conglomerate stocks and calls into question the viability of the conglomerate model.

Martin Sorrell’s remarks to the Financial Times about “warring factions” at WPP and internal politics “being the bane of our existence” are not helping the situation.

He also cast a jealous eye at companies like McKinsey and Goldman Sachs which he said have “grown organically.”

Sorrell mentioned the other conglomerates by name—Omnicom, Publicis and Interpublic (leaving out the much smaller Havas).

“The model” that such companies have is “the most difficult to manage because you have different tribes [and] warring factions that work in isolation,” he said.

Comments on the story were quick to come on odwyerpr.com. “Sorrell is being very honest about major issues we have known for many years,” said “former PR exec with two WPP PR units,” adding: “The conglomerate model is not only broken, it has been a mess since its origin.”

PR firms in conglomerates not only compete with each other but within themselves… “teamwork is very rare between divisions and among executives of units in PR firms,” said the contributor.

Promised “synergies” often don’t work out, said another contributor and a third one wondered how long banks are going to float the conglomerates in view of the tighter credit. Combined debt of WPP, OMC, IPG and Publicis is about $12B and has been at that level for years.

Stock of WPP at $44 is back where it was in 1990 while OMC at $40 is where it was in 1998. Sanford Bernstein on July 8 downgraded OMC from “out perform” to “market perform” and Deutsche Bank on July 1downgraded IPG from “buy” to “hold.” Five of the six last changes in advice on OMC from Wall Street houses have been downgrades. “The ad industry is presently in a severe slump,” said researcher Robert Coen of the Magna research arm of IPG.

Also being battered and which has a big debt ($1.05B vs. revenues of $3.16B) is the New York Times. Its stock has sunk to $14 or where it was in 1986. It reached a high of $55 in 2002. CEO Arthur “Pinch” Sulzberger has defied NYT tradition by running both the business and editorial sides. His hand is obvious in certain editorial policies. One subject off-limits is OMC while it’s practically open-season at the NYT on IPG.

WPP’s PR and PA businesses had a “stellar year” in 2007, said the 2007 WPP annual report. Revenues grew 8.2% not counting mergers, and 12.6% on a “constant currency” basis. Profit margin was 16.5%, up 1.5%. PR/PA makes up 10.5% of WPP’s revenues but 11.7% of profits.

A rosy picture is painted for Hill & Knowlton, Burson-Marsteller, Ogilvy PR, Cohn & Wolfe, and GCI (C&W and GCI were merged earlier this month).

No dollar or employment figures are given.

Howard Paster, XVP of WPP PR/PA, said in 2003 that lawyers warned CFOs of the dangers of signing off on numbers because accounting principles differ from country to country. The conglomerates operate in numerous countries. WPP lawyers and executives of its PR firms had discussed the matter long and “vigorously” before making the decision to withhold numbers, Paster said in 2003. Sarbanes-Oxley provides jail terms and fines for misleading financial data.

The last figures given by the hundreds of conglomerate ad agencies and PR firms were for 2001, making 2007 the sixth straight year without such data. A total of 190 independent PR firms provided verified figures for the 2007 O’Dwyer rankings, topped by Edelman’s $395M in fees.

B-M, H&K and Ogilvy “made excellent progress” in 2007 as B-M “continued operating from strength in the U.S. while rebounding in Europe,” says the WPP report. “B-M benefited from good years at its BKSH, Direct Impact, and Penn, Schoen & Berland subsidiaries. H&K maintained its broad leadership in Europe and showed special growth in Canada, the Middle East and Asia. Ogilvy did well in all regions while sustaining its leadership in China.”C&W and GCI turned in “impressive results,” with C&W again delivering “the highest margin among the WPP PR networks.”

H&K CEO Paul Taaffe said H&K celebrated its 80th birthday by reaching “record levels.” Every region and practice expanded, he said, with 20%+ growth in the Gulf, Australia, China, Canada, Denmark, Hungary, Sweden, Puerto Rico, Spain and New York. H&K has 72 offices in 41 countries. Largest clients, served in many countries, include Amgen, Deloitte, HP, Merck and P&G. Major new clients include HSBC, Qatar Financial Centre Authority, Alstom, Castrol, Nord Stream and the OPEC Conference.

On the subject of international accounting rules, the Bush Administration is proposing a shift to international rules for financial reporting (NYT 7/5). Such rules are “weaker” than U.S. rules and would put U.S. investors “at the mercy of overseas regulators,” said the NYT. It feels a “last-ditch effort” is being made to dilute rules passed after the Enron and other scandals … IRS Form 990, which would show the salary of PR Society COO Bill Murray, was not filed by the first deadline, May 15. A PRS staffer said the filing may be made either by the next deadline of Aug. 15 or by Nov. 15, the final deadline (which would be after the PRS Assembly Oct. 25) ... we don’t know how the nine educators who are seeking national office at PRS can associate their institutions of learning with the formal press boycott that has been passed by the PRS board. We doubt their school officials would allow this. The link to the PRS e-mail disclosing the boycott against this NL is as follows (click here). Charges are made against us but no specifics are provided (because the charges would dissolve at the merest light shed on them). The candidates are Rosanna Fiske, Fla. Int’l Univ.; Vince Hazleton, Radford; Jeff Douglas, Va./Md. Veterinary College; Deborah Silverman, Buffalo State; Amy Barnes, Univ. of Ark.; Susan Walton, Brigham Young; Steve Grant, Nat’l Educ. Assn., Carolyn Bobo, Texas Christian, and Ann Knabe, Univ of Wisc.

--Jack O'Dwyer