AIG REACHES OUT TO B-M

American International Group, which has already burned through two-thirds of its $122B U.S. taxpayer bailout line, has hired Burson-Marsteller in an effort to get back on track.

B-M was hired to deal with the flood of media inquiries and is to be paid with funds diverted from the ad budget of the stricken reinsurer.

AIG, which has been under pressure from New York State General Andrew Cuomo, agreed Oct. 22 to freeze executive pay and withhold more than $600M that was to be distributed via its deferred comp and bonus pools.

The politico said “until taxpayers recoup their investment in AIG, which is now in excess of $120B plus interest, there should not even be any contemplation of bonuses for executive performance.”

The fate of AIG was a hot topic at last week’s Council of PR Firms forum in New York.

Harris Diamond, CEO of Weber Shandwick predicted the AIG brand will disappear because the company is the poster child of reckless financial mismanagement. He predicts parts of AIG will be “resurrected under another name.”

SARD WORKS WITH LEHMAN

Sard Verbinnen & Co. is working with Lehman Brothers Holdings, which made the largest bankruptcy filing in history last month.

Hugh Burns, Sard’s general counsel and a managing director, and managing director Denise DesChenes are working on the account. DesChenes declined to comment.

The firm handled the Oct. 24 announcement that Lehman filed a motion in bankruptcy court to restrict stock trades by “substantial” shareholders
Kekst & Company worked with Lehman in the past up to its Sept. 15 Chapter 11 filing.

The New York Post reported earlier this month that Lehman ran up a $400K tab with Kekst but the firm is not listed as a creditor on Lehman’s bankruptcy website.

Lehman has agreed to sell its U.S. capital markets division to Barclays for $1.75 billion and its Neuberger Berman asset management unit to Bain Capital and Hellman & Friedman for $2.15 billion.

Rosemary Moore, senior VP-corporate and gov’t affairs for United Airlines parent UAL Corp. since 2002, will take a new post as assistant to CEO Glenn Tilton, sources say. Heidrick & Struggles reportedly is doing the search for a successor.

BERGEN MOVES TO ALCOA

Jack Bergen, senior VP-corporate communications & marketing at Germany’s Siemens USA unit, is taking the top PR job at Alcoa, the aluminum giant that relocated its headquarters from Pittsburgh to New York under former CEO and Treasury Secretary Paul O’Neill.

The Alcoa position is a “bigger job,” according to Bergen, who pointed out he will now head global PR for a multinational rather than handle communications for the American division of a foreign company.

Less overseas travel is an additional benefit, he told O’Dwyer’s during a break in the annual Council of PR Firms get-together held Oct. 23 in New York.

Bergen, who takes the Alcoa post next month, follows Klaus Kleinfeld to the $30B metals giant. Kleinfeld, who is Alcoa’s CEO, had headed Siemens USA prior to joining the aluminum giant in May. “He was my boss,” said Bergen.

Alcoa’s stock hit a 52-weeklow of $9.62 last week, off from its $44.77 52-week high.

Bergen’s Siemens exit follows the departure of Gregg Ward, who was government affairs chief at the $20B healthcare, lighting and technology combine, to United Technologies next month.

Bergen, ex-president of the Council of PR Firms, is former CEO of GCI Group and was CBS/Westinghouse’s PR chief, serving as head of corporate relations at CBS Corp. during its transformation from Westinghouse Electric Corp. He also was president of Hill & Knowlton USA, director of strategic communications at General Electric and chief speechwriter for Secretary of Defense Caspar Weinberger during the Reagan Administration.

AGAIN NO ‘TOWN HALL’ AT PR SOCIETY

A packed program resulted in no time being left for a “Town Hall” at the PR Society Assembly in Detroit Oct. 25. The same thing had happened at the 2007 Assembly.

A good part of the meeting was taken up with hundreds of slides being shown for the Blake Lewis leadership development program, a report on member attitudes by Ketchum, and a training session in issue analysis conducted by an outside consultant.

There was almost no mention of the current economic crisis. At one point chair Jeff Julin said PRS has about 20% of a year’s revenues in net assets although ideally this should be 50%.

He added that the assets are being built up at the rate of one percent a year in case of a “rainy day.” He then added: “It’s raining.”

(Continued on page 7)

GROWTH SLIPS AT OMNICOM

Omnicom reported a 5.6 percent jump in third-quarter net on Oct. 21 to $213.5M as growth slows at the ad/PR conglomerate.

The combine enjoyed double-digit growth rates of 14 percent and 11 percent in the first and second quarters, respectively.

OMC’s PR units (Fleishman-Hillard, Ketchum, Porter Novelli, Cone, Brodeur and Gavin Anderson) combined for a 1.2 percent dip in third-quarter revenues to $314M. PR was up 3.1 percent for the nine-month period.

Acknowledging the financial meltdown, OMC provided a break-out of revenue sources. The battered auto industry generates 14 percent of overall revenues. That is only surpassed by the 15 percent revenues kicked in by food & beverage marketers. Financial services account for eight percent of OMC revenues.

Other key sectors are drugs (11 percent), telecom (11 percent), consumer products (10 percent), technology (10 percent), travel & entertainment (six percent) and retail (five percent).

CEO John Wren also provided supplemental information on the conglom’s debt structure and the names of the 32 banks where OMC has credit agreements.
Bank of America, HSBC and JPMorgan Chase each have extended a $200M credit line to OMC.

Wells Fargo ($175M), Royal Bank of Scotland ($150M) Societe Generale ($150M), Deutsche ($150M), BNP Paribas ($130M), BBVA ($100M), Sumitomo ($100M) and Citigroup ($100M) rank next.

On the acquisition trail, Wren scooped up Paul Wilmot Communications (PR for fashion and luxury clients), Barefoot (interactive marketing), The Russell Organization (brand experiences and events) and The Eleven Agency (sales training, video production, e-learning and retail merchandising).

OMC registered a 6.9 percent rise in third-quarter revenues to $3.3B. Domestic revenues advanced 3.8 percent compared to a 10.5 percent jump overseas.

BERMUDA CALLS OFF PR SEARCH

Bermuda has called off its search for a strategic PR firm to buff the image of British territory about 600 miles off the coast of North Carolina.

Premier Ewart Brown last spring launched the search because he feared “destructive imagery” and scurrilous reports in the opposition press had the potential to hit the island’s tourism trade. Tourism to Bermuda’s high-end resorts has been down for the last five quarters.

A media audit, however, found that tourism is not impacted by Bermuda’s squabbling press. The tourism drop-off is blamed on the global economy. Glenn Jones, Brown’s press secretary, told the Royal Gazette (Oct. 18) the search for a PR firm is now officially kaput.

Corbin & Assocs. has represented Bermuda’s travel sector since `07. That work is separate from the just-ended search.

Sean-Patrick Hillman, executive VP at C&A, told O’Dwyer’s, that Bermuda’s travel numbers are on pace to achieve record results.

The upcoming year is a big one for Bermuda. The island, England’s second permanent colony in North America, celebrates it 400th anniversary in `09.

D’ALESSANDRO RIPS WALL ST. ‘ARROGANCE’

Former John Hancock Financial Services CEO David D’Alessandro pins the blame for the financial meltdown squarely on Wall Street’s “pure, unadulterated arrogance”

The former PR executive, who has just published “Executive Warfare,” told the Council of PR Firms’ “Critical Issues Forum” Oct. 23 that he was “stunned” by the amount of leverage at places such as American International Group.

D’Alessandro attacked Wall Streeters for leveraging companies to the point of making “enterprise risks,” and said some executives should “go to jail.”

He believes it will be a long time before the public is reassured about the integrity of Wall Street and the safety of their investments.

The former Edelman executive also talked about the “remarkable revolution” that is upending traditional media.

D’Alessandro said 85 percent of the population in 1946 reported reading a newspaper the day before. That figure dropped to 40 percent two years ago and 34 percent this year.

At that rate of decline nobody will be reading a paper by 2020, according to D’Alessandro.

The mainstream media model is “worse than dead” as broadcast and print outlets that were supported by advertising dollars are now chasing pennies on the Internet.

Old-line media has become the “stalking horse” and feeder for bloggers and others on the web who take up a reported story and “run with it.”

D’Alessandro told a funny story about life at Edelman years ago when he had to have a 10:30 a.m. martini with a client every business day.

He finally gave the bartender a few bucks to water down his drink so he could handle the rest of the day.

DOD SAYS NEWS OPERATION IS ACTIVE

The Dept. of Defense said on Oct. 20 that its newly consolidated communications apparatus, known as the Defense Media Activity, has been activated.

The DMA, which will open a new headquarters at Fort Meade, Maryland, in 2011, encompasses outlets like Armed Forces Radio, Defenslink.mil, Army/Air Force Hometown News Service, and Stars and Stripes.

A ceremony at the Pentagon Oct. 20 marked the beginning of the DMA, which includes more than 2,000 military and civilian staffers and a budget of about $225M.

Robert Hastings, Principal Deputy Assistant Secretary of Defense for Public Affairs who oversees the DMA, called the new entity a “transformational change in public affairs” that will improve the DoD’s internal communications.

“It is one of the most exciting things to happen to DoD public affairs in a long time,” he said. “It’s our opportunity to change the way we deliver news and information to our internal audience.”

The creation of the DMA was the result of the Base Realignment and Closure Commission’s 2005 report to put various Pentagon news agencies under a single command.

STAR LEDGER SLASHES NEWSROOM

New Jersey’s Star-Ledger said it will cut its newsroom staff of 334 by 45 percent by the end of 2008.

The Garden State’s largest paper will likely lose $40M in 2008, according to owner Advance Publications, which has been planning cuts since August, when the company said it needed to prune nearly one-fourth of its 750 non-union staffers to avoid sale of the paper.

Star-Ledger editor Jim Willse told the Associated Press that 151 news employees will get buyouts from the paper, which counts a weekday circulation of about 345K. Seventeen staffers were turned down.

The AP also reported that the East Valley Tribune, a daily paper in the Phoenix suburbs, has announced plans to eliminate 142 jobs, or 40 percent of its employees, early next year when its print edition will become a free distribution publication running four days a week. A third of the jobs cut belong to journalists.

DMA CUTS STAFF AMID DOWNTURN

The Direct Marketing Association cut staff last week amid a restructuring caused by the tumultuous economic environment.

Sources said several staffers were axed amid the group’s annual conference in Las Vegas which ran through Oct. 16.

Sue R.E. Geramian, senior VP, communications, public and media relations for DMA, said in a statement to O’Dwyer’s that it would be “inappropriate to discuss individuals affected by this restructuring.”

The group listed more than $9M in net assets for the end of its recent fiscal year, down from $11.8M in 2007. DMA, which counts more than 3,600 members, said it moved to “ride out the current economic situation ensuring we remain strong and capable of continuing” to service members and customers.

The recent annual report listed 48 staffers of the organization.

BECK BOLTS FROM CNN

Glen Beck is leaving CNN Headline News for Fox News Channel during the first-quarter of next year. He was the leading conservative voice at the Time Warner property.

Fox News CEO Roger Ailes said of his catch that he looks forward to having Beck’s “thought provoking commentary” on Rupert Murdoch’s cable network.

FNC is penciling Beck into the 5 p.m. time slot. At CNN, Beck bolstered viewership at the 7 p.m. time slot.

Beck, who has roots in radio, extended his contract with Clear Channel via a $50M five-year deal signed last year. “The Glen Beck Program” is also available on XM Satellite Radio.

INKY OFFERS DISSENT TO ENDORSEMENT

The Philadelphia Inquirer raised eyebrows Oct. 19 when it offered space for a dissent to its endorsement of Barack Obama for President.

The paper published “another view” under its endorsement called “The Case for McCain.” It opened by saying nobody is better prepared to serve as President as the Senator from Arizona.

The double endorsement generated speculation that PR man Brian Tierney, who led an investment group that purchased the Inky and sister publication, Philadelphia News, from McClatchy for $562M in `06, and his team had a hand in the dissent.

New management has introduced marketing moves such as allowing Citizens Bank to sponsor business briefs that have riled some media watchers.

Tierney told the Columbia Journalism Review in `06 that he didn’t expect to hang around the Inky and be a “potted plant.”

CBS COLLEGE SPORTS CUTS 30

CBS College Sports is trimming 30 staffers as it is cutting studio programming in favor of game coverage.

The cutback represents about a quarter of the workforce, and is the second round of layoffs. Forty people were let go in February.

The college network, available in 25M homes, will air its “College Sports Tonight” program until December. Its main competitor, ESPNU is viewed in 21M households.

WSJ’S SANDER TO CONTENTNEXT

Ernie Sander, who was deputy editor in the Wall Street Journal’s media and technology group, has moved to ContentNext as managing editor.

The 10-year WSJ veteran was responsible for a 15-member reporting group. Earlier, he served as senior editor of in the Journal’s Weekend Group and managing editor of the Asian Wall Street Journal’s Personal Journal.

ContentNext covers the business of digital media. It was founded by journalist Rafat Ali, and recently became part of the U.K.’s Guardian News & Media unit.

COLUMBIA J-SCHOOL GETS MONEY BOOST

The Robert Wood Johnson Foundation is investing $4.5M to support health and science journalism at Columbia University’s Graduate School of Journalism.

Nicholas Lemann, dean of the school, says the gift is a “recognition of the critical need for improved public understanding of science in all its form, but particularly to pressing issues in public health.”

The RWJF is the charitable arm of the founding family of Johnson & Johnson.

MILLER JOINS FOX

Judith Miller, the New York Times reporter who spent 85 days in jail for refusing to divulge in a federal probe the identification of a source who outed a former CIA operative, has joined Fox News as a contributor. She will provide commentary and analysis on national security, counter-terrorism and international issues.

The 60-year-old Miller spent 28 years at the NYT, and exited in `05 following questions about her reporting about weapons of mass destruction in build-up to the Iraq War.

Miller also will write for FoxNews.com and carry on as adjunct fellow at the conservative Manhattan Institute. She will continue to submit pieces to the Wall Street Journal, which is a sister publication to Fox.

(Media news continued on next page)

TAKE A BREAK, SAY FEMALE JOURNOS

While its intended function was liberation, new technologies, believe it or not, can pose just as many limitations.

An interconnected culture demands constant connection: applications that were designed for convenience instead lead us to adopt more applications and to apply more time to juggle them, thus adding to the overload and general anxiety that plagues modern culture.

Add this to the pressures in our personal lives, and it’s no wonder that productivity has waned with our attention spans. Given traditional domestic constraints, women in particular may find their time especially taxed in this informational deluge. How then, do professionals safely and sanely manage the conflicts of work and home?

This was the focus of an October 7 New York Women in Communications panel, which brought together some of New York’s most notorious female overachievers to discuss the delicate balance of professional and personal responsibilities.

Marcia Cole, founder and editorial director at AMBERmag.com, advised setting boundaries when accommodating the dual demands of family and clients. For a start, Cole recommended that women set aside a block of time each day to focus on nothing but themselves. Allowing yourself those daily rituals — be it jogging, yoga or reading a book — is a healthy way to balance the personal and professional workflow.

“It’s crucial to set times and parameters for yourself. That first hour in the day has to be for me,” she said.

A habitual entrepreneur, Cole launched AMBERmag last year, less than a decade after launching popular insidesalon.com. She’s written about beauty, fashion and entertainment for publications like Elle, Essence, InStyle and the New York Times, and she’s worked in editorial positions for Time, Inc. , Fairchild publications and Vanguarde Media.

Cole said setting your own boundaries helps others too: when boundaries are drawn, others learn when it’s best to approach you. They’ll also respect you for it.

“I get in that phase when it feels like I’m on a treadmill, everything is go, go, go. I become so drained that I’m of no use to anyone. When you take two for yourself, everyone benefits,” she said.

Janine Sarna-Jones, founder and president of Organize Me, Inc., said it’s important to “manage the expectations” of people receiving your calls and your emails.

“In my experience, for some reason women try to do more than anyone else, and if we’re not superhuman we feel that we’re not up to par,” she said. “It’s part of my values not to let others down.”

Sarna-Jones, who is also a frequent contributor to Parenting Magazine and has been a featured guest on Martha Stewart Living, offered a tip on how to prioritize and compartmentalize tasks in a multi-task setting: “Don’t check email every five minutes. Turn off your cell phone when you’re working on something important. Turn off the sound of your email.”

Laurel Touby, founder and senior VP of Mediabistro.com, believes taking a break from the steady workflow influences the decision making process in every aspect: “I don’t think of it as disconnecting. Think of it as connecting to yourself.”

A former journalist for Working Woman Magazine, Glamour and New York Magazine, Touby launched Mediabistro in 2003, a blogging site that offers job listings, tips, educational courses and networking forums for journalists. The site now has more than 800,000 registered users. She sold the company last year to Jupitermedia for a reported $23 million.

“Are we better off? Yes,” she said. “Technology gives us more choice. We’re more productive than we’ve ever been in the history of the world.”

Amy Introcaso-Davis, senior VP of original programming and development for Oxygen Media, said “you choose your own destiny” when it comes to riding or falling asunder in today’s work-flow. Introcaso-Davis previously worked at Bravo, where she produced Emmy-winning shows like Queer Eye for the Straight Guy and Kathy Griffin: My Life on the D-List.

According to Jen Chung, Executive Editor at Gothamist.com, this informational sink-or-swim is indicative of the age in which we live. A New York City-based blog that focuses on news, events, food, Chung co-founded Gothamist in 2003. The site was named blog of the year by Wired magazine and given a ‘Rave Award’ by the publication. The site now receives more than four million page views every month and recently spread its operations to 12 cities.

“Information is currency, so you need to know what’s going on,” she said.

The panel was moderated by Gail Blanke, founder, president and CEO of LifeDesigns, LLC.

RADAR FOLDS AGAIN

Radar editor Maer Roshan has shut down the pop culture magazine once again and has sold radaronline to American Media Inc.

AMI has installed David Perel, editor-in-chief of National Enquirer, as managing editor of the new Radar site.

Roshan launched Radar in `03 but it soon folded. It was resurrected in `05 but didn't last that year out. In `06, Integrity Multimedia Co. relaunched Radar. IMC is partnering with AMI the new radaronline.

Besides NE, AMI owns Star, Men's Fitness, Shape, Natural Health and Fit Pregnancy.

CAPTAIN HEADS ‘TODAY’ WEBSITE

Catherine Captain, a former corporate marketing executive at USA Today, has been named general manager of the “Today” show’s website.

She heads strategic planning, content partnerships and marketing for Todayshow.com.

Captain has been at parent site msnbc.com since 2005, a role she maintains.

Charlie Tonninghast, president of msnbc.com, said todayshow.com has emerged from the parent site as a brand that merits its own mangement team.

The PR Society Assembly, the legislative body of PRS that met Oct. 25, was more departed from reality than usual.

Virtually no legislation was passed except for a minor loosening of rules for the international Assembly delegate and a resolution demanding the timely distribution of financials and the same for minutes of the preceding Assembly.

Delegates did not get such documents until the day before or the day of the Assembly itself.

The PRS board bombarded the delegates throughout the Assembly with hundreds of slides, many of them with hundreds of words and complicated charts.

This was done to keep their attention off such real topics as decoupling APR from office holding, bringing back the printed directory, providing transcripts of the Assembly, moving the charter to Delaware to allow electronic meetings and votes, removing the three-year limit on Assembly service, ending proxy voting, and reporting assets the “normal” way (not booking 12 months of dues as cash).

A round of applause greeted one speaker when he said he had no slides to show.

The strategy of distraction and framing succeeded because the delegates, well over half of them serving for the first or second time, meekly accepted the incessant pitches and being turned into students of logical thinking by an outside consultant.

Although the stock market had just suffered one of its worst weeks ever and may have clipped $800,000 from the PRS treasury, the economy was barely mentioned.

The topic was especially germane in Detroit where the auto industry is under severe pressure and corridor talk was that General Motors and Chrysler would have to merge.

Chair Jeff Julin made the barest of mentions of what Newsweek has called an economic “nightmare.”

Julin said, “It’s raining,” after he noted that PRS tries to save up for a “rainy day.”

Even accepting PRS’s unusual definition of “net assets,” it still has less than six months of cash on hand should its income plummet ($5.3M cash vs. expenses of about $12M).

Treasurer Rosanna Fiske was asked how much the $3.5M in “investments” had declined during the past few weeks but she would not provide a number.
She said PRS kept 60% of the amount ($2.1M) in “equities,” 32-33% in fixed income and 8% in cash.

Chair-elect Mike Cherenson was asked what the “equities” consisted of but he had not replied as of press time. If PRS’s equities were hit with the nearly 40% decline in stock prices in recent weeks, it would mean a paper loss in the area of $800,000.

The investment policy was set three years ago, Fiske said. A delegate wanted to know the size of the staff and was told it is 58. Twenty-five PRS staffers were listed in the advance roster of about 1,560 attendees.

Unlike previous years, the list of registrants was not distributed in the conference packets but was only available as a download.

Assembly delegates, about half of whom will not even be back next year, were given elaborate, time-consuming assignments on how to think about making bylaw and policy changes. They meekly accepted this work.

Hours were spent listening to presentations by Julin, COO Bill Murray, the paid meetings consultant Jean Frankel, Blake Lewis of the leadership task force, and executives of Ketchum who presented a survey on member satisfaction.

Lewis, who presented dozens of slides and said these had been pared down from a total of 263, said the group of 22 volunteers had concluded that there is “no clear, consistent path to leadership” in PRS and that a definition of leadership itself is needed.

One problem, he said, is keeping senior members involved in leadership.

PRS has a shortage of leaders, especially at the national level, partly because the APR requirement blocks 80% of members from running for office. Requirements of heading a chapter, section, district or national committee or voting in an Assembly eliminate another 15% or more of members.

Prof. Lynn Appelbaum of CCNY was recruited for Tri-State director this year after two deadlines for candidates had passed and no one showed up. The same thing happened to the Sunshine district this year. Last year there were difficulties in finding candidates from the Southeast and Southwest districts.

The PRS board, which would rather eliminate districts than allow non-APRs on the board, tried last year to shrink the districts from ten to five. But the Assembly defeated the bylaw change.

The tragedy of the 2008 Assembly, which wasted hours on pitches that should have been provided in advance, was that there was for the second year in a row no time for a “town hall.”

This was scheduled for one half hour (4:30-5 p.m.) at the end of a day that started at 7 a.m. for many delegates who attended various committee meetings. Some were jet-lagged by traveling from three time zones away.

As of mid-afternoon, the Assembly was running an hour behind schedule but full time was given to the “classes in thinking” by Frankel and the Lewis leadership presentation.

As of 4:25, the 2008 elections, which were supposed to have been passed by the Assembly more than a hour earlier, still had not been made.

Nominating chair Cheryl Procter-Rogers, apparently unmindful that this cut-and-dried formality (because there were no floor candidates) was cutting into time allotted for the town meeting, dragged out the nominations until 4:50 by giving many details of the nominating process.

What should have taken five minutes lasted more than 20 and by 4:53, two delegates came to the mike with resolutions that the minutes and financials be given to delegates in a timely fashion.

That about exhausted available time and Julin ruled the Assembly would end at 5 p.m. because that was in the agenda that was adopted.

Just over half of the delegates (almost all were still in the room) voted to continue but Julin noted that a two-thirds majority was needed to extend a meeting under Robert’s Rules.

Delegates, who are duck soup for the association and legal experts who advise PRS leaders, should take a bigger role in preparing the agenda next year.

What they should do is simply not adjourn the meeting at all. Then they could meet whenever they want to by teleconference. Whatever they passed might not be legally binding but the national board would have to take notice.

--Jack O'Dwyer