HASS EXITS MS&L

Mark Hass, worldwide CEO of MS&L Worldwide for the past four years, has exited the Publicis Groupe unit, to do his own thing. Hass joined Manning, Selvage & Lee via its acquisition of Hass Assocs. in `02.

Jim Tsokanos, president of North America, said he and regional presidents Anders Kempe (Europe) and Glenn Osaki (Asia Pacific) will run things until a replacement is found for Hass.

Publicis Groupe CEO Maurice Levy is looking for a successor for Hass with John Farrell, head of the French ad/PR combine’s specialized agencies and marketing services unit.

B-M GRABS PERINO

Dana Perino, who was President Bush’s last press secretary, is joining Burson-Marsteller’s Washington office. She will be its “chief issues counselor.”

Mark Penn, CEO of B-M, told O’Dwyer’s that Perino “is going to work in a senior role in the new issues and crisis group.”

The plan is for Perino to serve as a “key member of the strategy group with myself, Karen Hughes, Don Baer and Josh Gottheimer,” he said in an email.

Hughes was White House counselor to Bush. Baer and Gottheimer worked in the Clinton White House as communications director and speechwriter, respectively.

Penn noted that the new issues group boasts of “senior White House related experience on both sides of the aisle.”

Perino, 36, joins as policy debates over healthcare, education, energy, defense and climate change loom on the horizon in D.C.

RF PROMOTES U.S. AT SHANGHAI EXPO

Ruder Finn will do media relations, counseling and events for the $60M USA Pavilion slated for the hotly anticipated Shanghai Expo 2010, which is expected to attract 70M people.

Chinese officials have expressed concern with the lack of American enthusiasm (planning/fund-raising) for the event, according to a report last month in the People’s Daily.

The U.S. Pavilion will stress sustainability, teamwork, health and the belief that “America is a place of opportunity where those who seek to change the world for the better will always thrive and prosper,” says its website.

Earlier this month, Hill & Knowlton was awarded the PR account of the Shanghai Expo 2010’s organizing committee.

CONGRESS PROBES AIG’S PR

Brooklyn Congressman Ed Towns wants to know whether American International Group earmarked any of its $182.5B in bailout money to bankroll a smear campaign against former CEO and chief critic, Hank Greenberg.

He demands all records from AIG’s PR firms, Burson-Marsteller and Hill & Knowlton, beginning from the Sept. 16 bailout date. That covers engagement letters, names of people on the account, contracts, work orders, white papers, memos, bills and payment information.

In his April 14 letter to current AIG CEO Ed Liddy, Towns wrote that he would be “extremely disappointed to learn that any of the billions of taxpayer dollars invested to support AIG may have been diverted to finance a PR campaign against critics of the AIG bailout.” The Democrat is “determined to ensure that the taxpayers’ investment in AIG is both protected and used as intended. His committee wants to be sure that any cash from the bailout funds is not being used to “pay PR firms to attack critics of AIG and the federal bailout.”

A statement from AIG spokesperson Mark Herr says Greenberg made “false and misleading” statements about the company. AIG’s purpose was to set the record straight.AIG says it looks forward to giving Towns the information that he wants by the April 29 deadline date.

PR WEEK TO MONTHLY; OFFER QUESTIONED

PR Week/U.S., ten-year-old publication of Haymarket of the U.K., announced April 15 that the April 27 issue would be its last as a weekly and that monthly publication would start in June when it will be standard size rather than tabloid.

This NL told PRW president Lisa Kirk that it appeared that PRW in the past couple of years has been in violation of USPS rules that say a premium offered to prospective subscribers of a periodicals-rate publication cannot be more than 70% of the subscription price.

She said PRW is in compliance with USPS rules.

PRW, until very recently, has been offering its $249 Contact directory as a free bonus for those paying $198 for a subscription to PRW. The value of a premium is determined by its actual cost, retail value, or its represented value, whichever is highest, say USPS rules.

The periodicals rate provided to magazines and other publications is a small fraction of the rate charged for First Class delivery although First Class service is provided.

Inside: Page 4: 2008 revenue table of independent firms in financial
category.

(Continued on page 7)

OBAMA TAPS MCHALE AS PROPAGANDA CZAR

President Barack Obama has nominated Judith McHale, former president/CEO of Discovery Communications as under secretary for public diplomacy and PA at the State Dept. She takes over the post that was held by Charlotte Beers, Margaret Tutwiler and Karen Hughes during the two Bush Administrations.

In a 20-year stint at Discovery that ended in `06, McHale built a cable giant that is viewed by more than one billion people speaking 35 languages in 170 nations.

She is credited with launching the non-profit Discovery Channel Global Education Partnership, which offers free educational programming to students in Africa, Eastern Europe and Latin America.

Following her work at Discovery, McHale unveiled the Global Environment Fund/Africa Growth Fund investment unit to provide capital to small companies.

McHale started her media career at MTV Networks, where she was general counsel.

Obama also nominated Philip Crowley to be assistant secretary of state for PA, or spokesperson for Hillary Clinton. He takes over for Sean McCormick, who was spokesperson for Condi Rice during the second Bush term. Crowley was director of homeland security at the left-leaning Center for American Progress.

He worked in the Clinton White House as special assistant to the President for national security affairs and senior director of PA for the National Security Council.

The retired Air Force colonel served in “Desert Storm” in 1991 and the ensuing “Provide Comfort” campaign to protect Iraqi Kurds from retribution from Saddam Hussein.

SITRICK DEFENDS PEM GROUP

Crisis counselor Mike Sitrick is repping PEM Group, which has its CEO money manager Danny Pang temporarily stepping down amidst charges that the Los Angeles –based private equity firm is involved in a Ponzi scheme.

A federal probe has been launched and PEM denies the Ponzi scheme charge lodged against it by former president Nasar Aboubakare. The Sitrick & Co. CEO has labeled Aboubakare a “disgruntled former employee.”

PEM Group’s CFO Wilbur Quon also has stepped aside until the Internal Revenue Service completes its investigation of him. Sitrick has said that probe is related to non-PEM Group business.

The Wall Street Journal made Pang’s decision to step aside in the wake of the federal investigation its top story today.

Earlier this month, the paper ran an item challenging Pang’s academic degrees and claim that he had worked at Morgan Stanley. Forty-two-year-old Pang was born in Taiwan, where he raised most of PEM Group’s fund.

Democratic PR hand Kristin Lee has been tapped for the Transportation Security Administration's top communications post.

Lee takes the title of assistant administrator for the office of strategic comms. and PA for the Dept. of Homeland Security division created after the 9/11 attacks.

She was majority comms. director for the House Rules Committee under Rep. Louise Slaughter (D-N.Y.).

DOMINO’S GETS SOCIAL MEDIA SUPPORT

Domino’s Pizza, which is managing a simmering crisis after two employees posted a lewd video online, has been primarily handling the situation in-house with support from a PR agency for social media.

Tim McIntyre, VP of communications for the top pizza chain, praised the work of the company’s PR firm Crispin Porter Bogusky on the social media front.

Domino’s response in that area has been critical as the crisis started on the video-sharing website YouTube and metastasized via blogs and Twitter.

Two employees at a North Carolina franchise posted the video on April 14 and Domino’s has been playing defense ever since.

The company’s U.S. president, Patrick Doyle, appeared in a YouTube video to “sincerely apologize” and thank “members of the online community” who alerted the company and allowed it to take action. “It’s not a surprise that this has caused a lot of damage to our brand,” he said in the two-minute clip.

Domino’s also created a Twitter account to address the issue and is tweeting links to articles about the crisis and responding to concerned customers.

USA Today called the incident “a PR nightmare scenario.” McIntyre told the New York Times that company’s executives initially decided not to respond to the crisis aggressively and the effect multiplied virally soon after.

SENECA NATION SEEKS PR SUPPORT

The Seneca Nation of Indians, a federally recognized U.S. tribe with three territories in western New York State, is seeking PR proposals for a contract potentially lasting three years.

The Nation, which owns three casinos and counts 7,700 members, wants a firm experienced in strategic communications and New York media relations with some knowledge of Indian affairs. The initial focus of the firm will be to work closely with the Nation’s president/CEO to articulate needs and concerns of the group.

The Senecas, or “People of the Great Hill,” are one of the six nations of the Iroquois Confederacy. Their operations are based in Salamanca, N.Y.

A one-year contract is planned with two additional option years but proposals should cover all three years, according to the RFP.

The Nation has not yet been reached about its current PR representation.

Proposals are due by May 1 with interviews slated for mid-month. The RFP can be viewed at www.sni.org.

EDELMAN HIRES ALMACY

David Almacy, who was White House Internet and e-communications chief, has joined Edelman's digital PA practice in Washington. He takes the senior VP title.

His job is to help clients of the biggest independent firm develop strategies to enhance outreach, engage allies, shape legislative debates and influence public opinion.

Almacy is a 15-year communications veteran. He joins Edelman from Waggener Edstrom Worldwide's Digital Strategies (Studio D) unit and worked in the Bush White House from `05 to `07.

GANNETT TAKES BIG AD HIT

Gannett reported a 34 percent decline in Q1 publishing advertising revenues to $723M as real estate, employment and auto advertising plunged. That decline helped trigger a 60 percent fall in net income to $77M.

Gannett's digital operation posted a stellar quarter as revenues soared more than 900 percent to $143M. That gain was driven by the consolidation of CareerBuilder and ShopLocal.

CEO Craig Dubow, in a statement, said business conditions remain very challenging as Gannett continues to “transform all facets of the company as we position it for a more favorable economic environment and the opportunities we see in the changing media landscape.”

Gannett's flagship paper, USA Today sold 527 ad pages during the quarter, down from 826 a year ago.

Telecommunications, drug and advocacy ads were strong at USAT, while travel, entertainment and financial categories were weak.

TIME BOTCHES MINE

Time Inc. has apologized to people who signed up to receive a personalized copy of the free mine, a made-to-order magazine sponsored by Lexus.

The first 31K people who signed up for mine are to receive a magazine carrying content from five magazines. An online version is available to 200K computer users.

Time Inc. sent an email to mine subscribers to apologize for a "computer error" that mixed up the personalized content.

Some of the mine stories were two years old. A Sports Illustrated piece featured an upcoming soccer match that was actually played last June, according to a report by the Associated Press.

To compensate for the snafu, Time Inc. will add another free issue to the five that were planned.

MAG AD PAGES SINK BY QUARTER IN Q1

Publishers Information Bureau reports magazine advertising pages dropped 26 percent in the first quarter.

U.S. News & World Report suffered the biggest setback, down 69 percent to 72 pages. Conde Nast Portfolio, Ser Padres, Technology Review and Wired reported declines on more than 55 percent.

Sign of the recessionary times: Hallmark Magazine showed the second biggest gain in ad pages, spurting 30.5 percent to 54. That magazine was shut down in February because of the economic downturn.

HAIRE HEADS PARADE

Jack Haire, who was working at CNet Networks in advertising/distribution after a 30-year stint at Time Inc., has been named CEO of Parade Publications. He succeeds Walter Anderson, who is stepping down on July 1.

Si Newhouse, chairman of Parade parent Advance Publications, called Haire an “experienced executive who has a deep understanding of both print and digital media.”

Haire will be a “great partner to Parade's advertisers and newspaper publishers,” said Newhouse in a statement.

NYT SLICES SECTIONS

The New York Times, in its latest money-saving mood, is dropping "Escapes" section that runs on Friday and Sunday local sections for New York and its suburbs.

Escapes editorial is being absorbed into the “Weekend” section as of May 1. The Sunday regional coverage will be part of a new section with a “zoned” page tied to where the paper is distributed. That is expected to take place May 24.

The sections that are being revamped are dependent on freelancers. The NYT recently announced plans to cut freelance work by 10 to 15 percent.

FORMER P-I STAFFERS LAUNCH SITE

Fired staffers of the Seattle Post-Intelligencer, which is now online-only, have established Seattlepostglobe.org as a non-profit competitor.

Hearst Corp. turned off the press March 17, saying the P-I hadn't earned a penny since 2000.

Kery Murakami, who heads the new venture, says he is looking to get 8,000 people to pledge $10 a-month so he can hire some staffers. SPG, which sells advertising, has a half-dozen “volunteer” workers, though another 20 P-I alum expect to contribute.

SPG is housed in the office of Seattle’s public TV station, KCTS-TV, which is accepting contributions for the news venture. It is discussing joint reporting ideas.

ZELL SAYS HE GOOFED IN BUYING TRIBUNE

Real estate mogul Sam Zell says his `07 deal to take Tribune Co. private was a mistake, according to a report by Bloomberg.

He was too optimistic in terms of the newspapers’ ability to preserve their positions in the marketplace, he said of his properties that include Chicago Tribune, Los Angeles Times and Baltimore Sun.

Zell filed Chapter 11 in December to “stop the bleeding and preserve a great company.” He is exploring various options because the "newspaper model in its current model is not working."

WAPO REORGANIZES

Washington Post’s Marcus Brauchli has revamped operations by creating new reporting groups and streamlining edit desks as WaPo's print and online units integrate.

In a memo, Brauchli explains the drive to "simplify the handling of words, pages, images and new media." He believes "decisions about space and play must happen faster, both in print and online."

Brauchli envisions a "universal desk" that combines what is now spread across departments and two separate newsrooms. Stories edited during the day for posting on the website will form the basis for print versions, and vice versa, he wrote. Sandy Sugawara, assistant managing editor for business, is the editor in charge of the universal desk.

Post reporters will report to two editors. They are Kevin Merida, upped from assist. managing editor for national news to national editor, and Emilio Garcia-Ruiz, who is upped from assistant managing editor for sports and weekend editor, local editor.

(Media news continued on next page)

EBAY TO SPIN OFF SKYPE

EBay plans to spin off its Skype Internet phone business via an initial public offering during the first-half of `10.

CEO John Donahoe called Skype a "great stand-alone business with strong fundamentals and accelerating momentum." The unit, in his view, does not fit with the auction site and PayPal payments system.

EBay topped Google and Yahoo! in a bidding war for Skype, shelling out $2.6B in ’06. Former CEO Margaret Whitman later conceded EBay paid too much, writing down $1.4B of the purchase price.

Skype generated $550M in `08 revenues.

GLOBE GUILD GETS PR SUPPORT

O'Neill and Associates is representing the Boston Newspaper Guild as that union for Boston Globe staffers faces pressure to make concessions or risk the closing of the paper.

The guild is squaring off against Globe parent The New York Times Co., which said it will sell or close the paper if it doesn't get $20M in cuts.

“The behavior of the Times Company is unconscionable,” said Union president Dan Totten, in a letter to members made public on Friday. He is urging members not to offer up concessions, adding: “We are incredibly fortunate that among the ranks of our membership are some of the most skilled and intelligent communicators in the industry.”

Thomas O'Neill, former lieutenant governor of Massachusetts and eldest son of the late House Speaker, Tip, heads Boston-based O&A, which was brought in by the guild on Friday.

The firm has worked with the union in the past and an endorsement for past work from Totten is displayed on the PR firm's website.

O&A's staff is a power list of staffers from Boston and statehouse business, journalism and politics.

VA REVIEWING REPORTER INCIDENT

The U.S. Dept. of Veterans Affairs is investigating an April 7 incident in which a public affairs officer and security confiscated a reporter’s flash memory card after a Town Hall meeting.

The Washington Post, other media and journalism groups have been pressuring the federal agency with coverage of the incident and the VA returned WAMU radio reporter David Schultz’s memory card on April 10.

The VA, which initially cited a “legal and moral responsibility” to protect the privacy of patients and said Schultz didn’t properly identify himself, is conducting a “top to bottom review” on the incident, according to WAMU, which is an NPR affiliate.

Schultz was covering a meeting (announced in a press release) in the hospital auditorium about medical care for minority veteran patients. He says when he followed up with a veteran who spoke critically of the care, a PAO interrupted to say both reporter and patient needed to sign consent forms. Security was summoned and Schultz gave up the flash card on his audio recorder after speaking with his news director.

O’Dwyer’s Ranking of Financial PR Firms
Click here for ranking of Financial PR Firms.

SPECTRUM SETS UP IN N.Y., PRUNES NAME

Washington, D.C.-based Spectrum Science Communications is shortening its name to Spectrum and has opened a New York office to build out its capabilities. John Seng, president and founder of the firm, said new staff in digital media and health policy, along with investments in research and consumer marketing, brought on the change. He sees the firm as the place “where health and science communications meet.”

Senior VP Mary Ann Chaffee said the Obama administration’s indications that health issues will be a priority in noting Spectrum has invested in taking advange of that agenda.

Senior VPs Liza Morris and Cherry Dumaual head the New York outpost.

CALIF. PROP 8 FIRM GOES NATIONAL

Schubert Flint Public Affairs, the Sacramento firm that played a key role in torpedoing same-sex marriage in California, is now working with a national group trying stem the tide of similar proposals across the country.

The firm, headed by conservative former Goddard Claussen Porter Novelli partner Frank Schubert, and former Russo Marsh + Rogers alum Jeff Flint, helped kick of the “Two Million for Marriage” campaign in Trenton, N.J., on April 8.

That effort is slated to span two years in recruiting two million supporters to oppose gay marriage pushes in the Garden State and others like New York, Connecticut and Vermont.

A $1.5M advertising buy is supporting the launch with a spot that features ominous clouds over several people warning against same-sex marriage.

Schubert helped the Yes on Proposition 8 campaign to defeat gay marriage in California last year.

ALASKA FIRM TAKEN OVER BY PRES.

Jennifer Thompson, a PR pro based in Anchorage, Alask., has inked a deal to buy 10-year-old Bernholz & Graham from owner Porcaro Communications.

Thompson has worked at the firm since an internship in 1999 and recently served as president.

The transaction took place on April 1.

B&G was founded by Bonnie Bernholz and Robbie Graham and works with the Alaska Travel Industry Association and GCI, among its clients. Porcaro bought the firm in March 2001.

Graham will stay on to assist with the transition but says she’ll turn her attention to public diplomacy and academics. B&G is relocating to 445 W. 9th Ave in Anchorage. The firm will partner with Porcaro on several client accounts.

BRIEFS: Trippe & Co., Westminster, Colo., has formalized a social media practice even though the firm says its been in the space for years. “We don’t view Twitter, Facebook and other technology-driven communications as something new,” said Karla Trippe. “What has changed is the speed with which non-media outlets have superseded traditional media and the need for companies to be savvy about which communication method works best for a particular message or product.”

MEDIALINK SEEKS FUNDING OPTIONS

Medialink, which expects to continue a string of operating losses in 2009, said it is pursuing options like outside financing or third-party buyers to avoid going out of business.

If the company can’t secure backing or raise capital from a sale, Medialink “may not be able to continue as a going concern, which would result in the company’s inability to realize the carrying value of its assets and liquidate its liabilities,” reads its annual report, released April 15 after a delay.

The company’s outside auditor, KPMG of New York, added in the report: “These factors raise substantial doubt about the Company's ability to continue as a going concern.”

For 2008, Medialink saw revenues fall by 10.4 percent to $19.6M for a net loss of $14.6M.

For the fourth quarter, revenues were down nearly 21 percent to $4.9M, slipping from $6.2M in ’07, as the number of projects declined in the global economic slump. That equated to a net loss of $3M for the quarter.

Medialink said it expects to continue its history of operating losses in 2009 as revenues continue to decline in the tough economy.

The company said its working capital of $4.9M at the end of ’08 is its sole source of funding and may not be sufficient to fund continuing operating losses and existing obligations.

It also reported $5.4M in cash.

“Worldwide economic conditions in 2009 have continued to put significant pressure on the business and our clients, including resultant delays in approval for clients' spending budgets,” Larry Moskowitz, president and CEO, said in a statement, adding the company continues to cut costs and develop new services.

PR EXECS FORM TRAINING FIRM

With the sluggish economy affecting PR budgets, two former agency execs have set up a firm to help clients help themselves with PR.

“Never has there been a time when powerful communication is more important than right now when every organization is facing severe economic headwinds,” said David Young, former president of Cleveland-based Edward Howard & Co., who joins former colleague and executive VP at EH, David Meeker, in Solon, Ohio-based Meeker-Young.

“We teach clients how to help themselves,” said Meeker.

Donald Eagon, former VP of global communication and investor relations at Diebold, an Edward Howard client, also joins the new shop as a senior facilitator.

Clients can choose from 14 training modules with others in the works.

BRIEF: Tom Martin, former chief communications officer for FedEx and ITT, has joined the faculty of The George Washington University masters in strategic PR program. Martin is currently executive in residence at The College of Charlestown and will teach in the GWU online program and lecture on campus on ethics in corporate and political communications.

PRW TO MONTHLY; OFFER QUERIED (cont’d)

Publishers must show that subscriptions are “genuine” and separated from “all other business transactions so as to constitute a distinct, voluntary and independent act.” The premium for a magazine selling for $20, for instance, could not be worth more than $14.

Although PRW had several price promotions, it has mostly been selling for $178 for 49-50 issues with the Contact directory offered as a free bonus.

Published since 2001, the approximately 400-page directory of PR firm and corporate PR contacts had a cover price of $249 for most of that time although the 2009 edition has a price of $198 on the spine and $249 on the first page.

It was sold separately for most of its early years, an order card in 2005 offering the directory and PRW for a combined price of $285 which would provide “a savings of $92.”

The same reply card said Contact could be bought separately for $249.

Contact was offered as a separate publication for $249 on Amazon as of Feb. 5, 2009. Purchase could not be cancelled or refunded. The offer is no longer available on Amazon.

USPS Asked to Investigate

This NL brought the PRW sales materials to the USPS a year ago and asked whether PRW was violating the rules for periodicals. USPS is investigating the matter but no ruling has been forthcoming.

Kirk issued the following statement last week:

“PRWeek is in compliance with the USPS regulations governing publications. PR Week is an integrated subscription service. PRWeek Contact is not available for sale separately from PRWeek magazine. If someone wishes to purchase PRWeek Contact they may do so by purchasing an annual subscription to PRWeek.

“Please note that we only publicize one consistent full price at $198. The price includes the print magazine, PRWeek special reports, full access to prweek.com, e-newsletters and PRWeek Contact.”

A page in the 2009 Contact offers “5 Fabulous Features” for $148 including 50 issues of the magazine, Contact, e-mail newsletters, online access and four special reports—Diversity Survey, Media Survey, Salary Survey and Career Guide.

Asked whether subscribers would receive a pro-rated refund since someone who just subscribed would receive 12 print issues rather than 50, Kirk responded that buyers could cancel their subscriptions and receive a prorated refund for the remainder of the term.

However, they would not longer be subscribers and would be unable to have full access to the PRW website.

Distribution Averaged 8,902 in 2008

PRW’s statement in its Oct. 20, 2008 issue gave 8,902 as its average distribution over the previous 12 months vs. 9,759 in the previous year. Average paid and requested subscriptions through the mails was 6,521 vs. 6,918 in the previous year.

Sales through dealers, counter sales and other non-USPS paid distribution averaged 1,067 in 2008 vs. 90 in 2006. Free distribution was 2,381 in 2008 vs. 2,841 in 2007.

A one-time full page color ad costs $9,419, according to PRW’s rate card. A 4% discount is provided for a seven-times schedule. Half pages are $6,124.

Society Aided PRW Introduction

The “PR” Society aided the introduction of PRW in November 1998, COO Ray Gaulke saying in a letter to members Aug. 14, 1998 “We could introduce them (PRW) to leaders in the business, help them to meet our advertisers, and encourage our members to subscribe.” The 19,600 Society membership list was used for at least several mailings.

PRA, formerly PR Aids, rented offices to PRW as well as mailing lists. Full-page ads were $5,350.

Gaulke and 1995 Society president John Beardsley had gone to London twice to convince Haymarket to launch a U.S. version of PRW/U.K after Advertising Age had turned down a similar proposal.

Steve Pisinski, Society 1998 treasurer, said the Society should not be “in the position of favoring or appearing to favor any industry publication” and said Gaulke’s letter to members was “not approved by the board.”

Lace and Partners Sold PRW to Haymarket

PRW/U.S. was started in April 1988 by Geoffrey Lace, an owner and publisher of PRW/U.K.; Formay Group, a private group headed by Frank Madden, a director of First Funding Corp., investment banker for Shandwick; five principals of IR firm Dewe Rogerson, fifth largest U.K. IR/PR firm, including CEO Roddy Dewe, and Anthony Freelaed, a private investor.

The ownership of PRW/U.S. by PR executives involved with DR and Shandwick was not revealed to the U.S. PR audience.

The owners were said to be “Quotepledge” of the U.K. and Formay & Assocs. A report in the Feb. 10, 1988 issue of this NL revealed the owners by name and affiliation.

Initial circulation of the first PRW/U.S. was said to be 61,000, making it “the largest circulation PR publication in the world.” Editor was Paul Holmes, then 25, who was editor of PRW/U.K.

However, by late 1988 it ran into financial problems and published its last issue in late November. A 15-page report to potential investors said the tabloid had $323,954 in current and accumulated losses as of Oct. 1, 1988; accounts payable of $164,283 (vs. accounts receivable of $148,574), and a long term debt of $166,000.

Biggest creditor was said to be Balan Printing Co. of Brooklyn. The amount was not revealed. The publication declared Chapter 7 (immediate) bankruptcy in January, 1989.

PRW/U.K. was founded in 1984 by executives of DR who later reduced their interest to 49.56%.

Dewe said in September, 1988 that it was sold to Haymarket because Haymarket had “more capital and more resources.” He also noted that the sale (for a reported $3 million) removed the “awkwardness” of PRW being in the position of reporting on an owner. He expressed satisfaction at starting the PR industry publication.

Lace, also a seller of PRW/U.K., said the sale did not affect the operation of PRW/U.S.

The British have stiffed the U.S. PR community yet again (page one).

In announcing that it will now publish “PR Week” monthly instead of weekly, U.K.-based Haymarket has yanked 38 promised copies of a print publication from its 6,500 subscribers.

There was nothing in the announcement about subscribers getting reimbursed for the shortfall, only that there will be a new online edition each Friday.

This is not the service that we just paid $198 for. We contracted for “50 issues of PR Week magazine” plus six other features.

PRW president Lisa Kirk, asked for a refund of some type, said subscribers could cancel and get a prorated refund. However, neither we nor many others can do that since we still want access to the PRW news, services and archives.

PRW will save a bundle by mailing a color magazine 12 times a year instead of 50 and we think it should return the savings to subscribers.

Since buyers have lost three quarters of the issues due them, they should get three-quarters of the price they paid—mostly $198. We’d cut the $150 in half figuring an average of six months of service is owed.

Haymarket, which calls itself the “largest privately held publishing company in the U.K.,” with $350M in revenues, should distribute about $487,000 to subscribers ($75 X 6,500).

We also think it owes a substantial sum to the USPS for getting First Class delivery of PRW for years while undeservingly paying the low periodicals rate. That rate bars premiums worth more than 70% of the price of a publication.

PRW came out with its Contact directory of PR firms and corporate PR depts. in 2001 that was priced at $249. The same price is on the 2009 edition on the first inside page although the spine says $198. USPS uses whatever is the highest published price in calculating the value of a premium.

PRW, mostly selling at $178 yearly, first started offering the directory at a reduced price if purchased with PRW ($275 for both was one offer).

Then the directory became a free bonus. An order card showing the 2005 Contact said PRW was $178, Contact was $249, and both could be purchased for $178, “a savings of $199.” The 70% rule would limit any premium for PRW to $124.

Since the O’Dwyer Co. sells a similar Directory of PR Firms for $175, it did not help our marketing efforts to have Contact, in effect, being given away.

We took the PRW offers to the USPS a year ago and it said it would investigate. So far there is no ruling.

Contact 2009 has an offer of five services for $148 including PRW and Contact. PRW president Lisa Kirk says the five are now part of a package not available separately and that PRW is USPS compliant.

But what about past years and why does the 2009 Contact have prices on it? When the “PR” Society published its members’ directory, it was part of the subscription to Tactics and bore no price.

This is the second time that a U.K.-owned publication with the name “PR Week” has reneged on a contract to subscribers.

The first was in 1988 when the first PRW/U.S. folded in late November after publishing eight months. Stiffed were subscribers who paid for a full year, advertisers who had paid for schedules, printers, and other suppliers (page 7).

Principal owners were executives of Dewe Rogerson, fifth biggest IR/PR firm in the U.K., who had founded PRW/U.K. in 1984. Shandwick, headed by Peter Gummer, was also involved financially via its investment banking firm, First Funding Corp.

U.S. readers did not know that PR executives were behind PRW/U.S. until we obtained the corporate papers and revealed it.

Well-off executives, under the protection of a corporation, took a hike while individuals took it on the chin.

The current recession is playing a big role in the cutback at PRW/U.S. Largely bankrolling it were the PR firms of WPP, Omnicom, Interpublic and Publicis, whose current combined debt is $15 billion ($8.2B for WPP; $3B for Omnicom; $2.1B for IPG and $1.9B for Publicis).

OMC is on Standard & Poor’s creditwatch and WPP was downgraded to BBB by S&P. Both stocks are half of their recent highs.

PRW’s ad rates were so high ($9,419 for one page) that the big conglomerate-owned firms were about the only ones that could afford to advertise. The aim was no doubt to have the business world see PR in terms of those agencies.

The conglomerates had been successful in sweeping up just about every ad agency but this did not happen in PR.

Ad revenues are in a tailspin that threatens to be long-lasting. WPP CEO Martin Sorrell said this month, “In the 25-30 years that I’ve been in the business, I have never seen anything quite like this” (in referring to the current downturn).

The Council of PR Firms, founded in 1998 (same year as PRW), is largely funded by the conglomerates. Its favorite ad vehicle was PRW which got about $150,000 in ads over a five-year period while O’Dwyer’s PR Report got one $600 ad. PR Newswire, owned by UBM of the U.K., also favored PRW, spending hundreds of thousands for ads. No PRN ads at all were placed in O’Dwyer media. There were always “budget problems” although PRN has been generating nearly $100M yearly in gross profits.

Another U.K. venture involving U.S. PR firms was Shandwick’s acquisition of 35 mostly U.S. firms from 1986-89 at an initial cost of $90M with $190M more in possible payouts. Firms were told they were purchased for their names, individual cultures and executives. Shandwick’s debt was $90M in 1992 when its stock fell to 2.75 pence from a high of two pounds. It later recovered to around 50 pence and was acquired by Interpublic in 1998 (still owing about $75M)….U.K.’s Corporate Communications purchased Georgeson, New York, for an initial $12M in cash but didn’t pay another $7.5M. CC became insolvent in 1992. Debt was estimated as high as $52 million. About 620 unsecured creditors (printers, photographers, florists, etc.) were told by receiver Cork Gully they had “no hope” of collecting anything. Stock once worth $20M became worthless. Bank of Scotland lost $20M. Directors of CC, including Tony Canning and Peter Willetts, became officers of a new entity, Georgeson International. Creditors complained that Georgeson was valued at $20M but sold to its management for $11.6M.

--Jack O'Dwyer