SITRICK ACQUIRED IN $40M+ DEAL

Resources Connection Inc., a consulting firm, is acquiring crisis shop Sitrick & Co. and Brinko Assocs., a small restructuring firm, in a deal that it values at $43.3M, which includes $28.2M in cash, restricted stock and earn-outs based on profit goals.

Michael Sitrick will head Sitrick Brinko Group and offer corporate advisory and restructuring services. He reports to Don Murray, CEO of Resources. John Brinko is president & COO of the new group.

Murray said S&C fits with its “first-in capabilities” as corporate issues arise requiring “immediate communications strategy formulation and execution.”

Sitrick sees a “paradigm shift occurring in the advisory and restructuring business due to the cash squeeze.” Companies understand that to “get the best talent they have to pay the going rate for pricey lawyers, turnaround professionals and communications executives.” He believes SBG can offer them a “very attractive quality and financial alternative.”

SBG pitches the line that its services could mean the difference between a company surviving and emerging from a restructuring to one going into liquidation.

Sitrick's firm has counseled about 300 companies that have declared Chapter 11 during the past 20 years. That list includes Worldcom, Collins & Aikman, Barney's New York and Global Crossing.

EDELMAN, SAATCHI WIN BIG SWINE FLU PACT

Edelman, teamed with M&C Saatchi, defeated eight other combinations and single firms to develop and guide a federally funded $7M swine flu public education campaign in California.

California's Dept. of Public Health issued an RFP on Oct. 8 for the lucrative assignment, which includes PR and advertising for an “expedited, innovative” push to raise and maintain public awareness of the H1N1 virus among the state's diverse population.

The independent PR firm and Publicis-owned ad agency knocked off several teams, including GolinHarris/Campbell-Ewald, Weber Shandwick/McCann Erickson, Hill & Knowlton/Ground Zero, Paine PR/Runyon Saltzman & Einhorn, Ogilvy PR Worldwide/Mering Carson, Rogers Group/Fraser Communications, along with single bids by Katz & Associates and Vitro.

The Edelman/Saatchi pact runs from Oct. 21, 2009 to Sept. 30, 2010. The $7M budget is for the initial term, but two year-long options are possible.

Several states have used federal funds to run public information campaigns on the H1N1 outbreak.

IPG’S Q3 NET CRASHES 56%

Interpublic reported a 55.5 percent nosedive in third-quarter net income to $17.2M as clients scaled back marketing outlays. Revenue plunged 18% during Q3 to $1.4B as existing clients trimmed outlays by 14.2%.

CEO Michael Roth believes the worst is over. “Client sentiment has stabilized,” he said. Roth retains a “cautious” outlook, making it difficult to “predict what growth will look like in 2010.”

The parent of Weber Shandwick, MWW Group and GolinHarris pared 5,100 people from the payroll during the past 12 months.

Roth will continue to realign “cost base against conservative top line assumptions,” to be in position to “deliver significantly improved profitability next year.” IPG will “fully capitalize on advertising recovery” and “achieve long-term success,” according to its leader.

IPG lost $16.3M for the nine-month period compared to an $85.3M ’08 profit. Revenue fell 16.5% to $4.2B. Severance charges rose from $39.9M to $94.9M.

OGILVY SLATED FOR $9M RAIL PR

The second time around, Ogilvy PR Worldwide is slated to win a $9M PR pact to support California’s push for a high-speed rail system.

Ogilvy’s bid is being recommended to the California High Speed Rail Authority’s board Nov. 5.

The WPP unit was not a finalist in the first review, when Fleishman-Hillard, Porter Novelli, Edelman and incumbent Deutschman Comms. Group were in it.

The initial RFP process over the summer was halted ahead of an award to Omnicom’s Mercury Public Affairs after media reports questioned the firm’s ties to the committee overseeing the selection as well as the Schwarzenegger administration. Mercury said last week in pulling out of the process that it believes “internal politics” sidelined its bid.

PRS 3Q DOWN 45%; ‘HARDSHIP’ RATE OFFERED

The PR Society reported third quarter revenues of $1,639,309, a 45.1% decline from $2,986,334 in the same 2008 quarter.

Treasurer Tom Eppes said $1.1 million of the $1,347,025 decline was due to a “timing difference.”

PRS had recognized as income in 3Q of 2008 “nearly $1.1M” in advance fees for the conference while it did not do so in 2009 because this year’s conference is taking place in November and “revenue is deferred to that time,” he explained in a report to Assembly delegates and a report on the PRSAY section of prsa.org.

(Continued on page 7)

RUSSIA SEEKS PR TO REHAB STALIN

Russia is looking for an international PR firm to rehabilitate the image of Joseph Stalin, the ruthless leader who murdered up to 20M of its citizens.

According to a report in euobserver.com, Russian news agency Ria Novosti will run the campaign out of Brussels, capital of the European Union.

It has teamed with RJI Companies, a strategic communications outfit with offices in Washington, London and Zurich, to recruit a Top Ten firm for a pro-Stalin pitch.

A pro-Stalin PR campaign would highlight his role in defeating Nazi Germany and building the Soviet Union into a global power in the aftermath of WWII.

Soviet leaders began a de-Stalinization program upon his death in 1953 to erase the cult of personality surrounding the former strongman.

The rise in Russian nationalization under Vladimir Putin has resulted in a re-Stalinization effort. Stalin finished third in a 2008 TV station contest to name the greatest Russian in history. He was leading the contest until the producer appealed to viewers to vote for somebody else.

The Kremlin recently unveiled a study guide for high school teachers that called Stalin "one of the most successful leaders of the USSR."

Putin said Russians should not be ashamed of Stalin because "other countries have also known bleak and terrible moments," according to an item in the New York Times.

Omnicom’s Ketchum handles PR for Russia.

COKE’S MATTIA ENROLLS AT YALE

Tom Mattia, who retired as The Coca-Cola’s Company’s top PR executive in March, has taken a new chief communications post at Yale University.

Mattia takes over for Helaine Klasky, who stepped down in July and now heads public affairs at General Electric.

The 60-year-old executive will serve as chief communications officer and special advisor to Yale’s president, Richard Levin, starting on Nov. 1.

He'll oversee the public affairs office and the university's press officers, and work directly with Levin as part of the president's administration.

Mattia said in a statement that Yale is one of a small handful of institutions capable of “making the intersection of academia, business, civil society and government work for the betterment of mankind.”

Mattia headed public affairs and communications for Coca-Cola in three-plus years at the company after serving as a VP of communications for EDS and, earlier, director of communications for Ford and VP of its Lincoln Mercury unit during the 1990s.

Previous stints included executive VP at Hill & Knowlton in Hong Kong and a start to his PR career at IBM in the early 1980s. Sustainability and social responsibility were key focuses of his term at Coca-Cola.

Mattia told the Yale Daily News that he had two other offers – one from a PR firm and another from an NGO. The Ivy League institution endured national scrutiny last month after a student was murdered in a campus lab.

JUSTICE DEPT. INDICTS FOREIGN LOBBYIST

The Justice Dept. has indicted Robert Cabelly of C/R International for violating U.S. sanctions lodged on Sudan, acting as an unregistered agent of a foreign power, money laundering, passport fraud, and making false statements.

The former State Dept. and Fleishman-Hillard executive, according to the indictment, represented Sudan from ’05 to mid-’07 without U.S approval as required by the sanctions regulation. Currently, Sudan is on the State Dept.’s sponsors of terrorism roster.

O'Dwyer’s reported Sept. 19, 2005 that C/R International received a $530K contract with Sudan “to promote the country’s north/south peace agreement, and highlight Sudan's role in fighting terror.”

That pact drew heated opposition from Virginia Congressman Frank Wolf and human rights activists protesting Sudan’s butchery in its Darfur region. C/R informed the Justice Dept. in February 2006 that it terminated the Sudan account.

The Justice alleges the 61-year-old Cabelly “misrepresented to U.S. officials the nature of his relationship with Sudan.” It believes Cabelly engaged in "illicit contractual relationships with Sudan's oil industry "and sought foreign investment for that impoverished African nation.

The Justice Dept. contends that Cabelly directed a French oil company to “deposit over $180K of his fees received into an offshore account that he maintained in the Cook Islands, an account he used to launder the funds in order to conceal the fact that it was proceeds obtained in violation of the sanctions.”

If convicted of all accounts, Cabelly could be sentenced to more than 50 years in jail.

C/R International has worked for Angola, Nigeria's Base Petroleum, Turkey, Equatorial Guinea, South Africa and Ethiopia.

AFGHAN CAMPAIGN SETS UP PA UNIT

The U.S. military-led campaign in Afghanistan has set up a new 24-hour-a-day public affairs unit at Kabul's airport to handle media questions about operations in the country.

The PA outpost - dubbed the International Security Assistance Force Joint Command Media Operations – has been established at Kabul International Airport North in a new NATO command center activated last month.

Forty-three countries – more than 100K troops, estimated by the end of ’09 – are involved in operations in Afghanistan under the auspices of NATO. The U.S. represents about 70 percent of that.

The PA move comes as the campaign draws more media scrutiny among a Taliban offensive and as the Obama administration reviews the eight-year-old-war with a decision expected before the end of ’09.

Other press inquiries about embedding, strategy, policy and other issues continue to be directed to ISAF Headquarters PA in Kabul.

Gen. Stanley McChrystal heads ISAF as commander, with Lt. Gen. J.C. Buddton (U.K.) as deputy commander. Canadian Brigadier-General Eric Tremblay is NATO's spokesperson there.

40 FINISHED AT FORBES

Steve Forbes is axing another 40 staffers from Forbes magazine because the family owned publication has been “hit hard by both the severe recession and the seismic shifts wrought by the web.”

His memo assured remaining staffers that Forbes Media-- following the latest cutbacks – will “not only weather these storms, but ultimately emerge as a stronger company, well-positioned to expand and prosper in the years ahead.”

Forbes says today’s tribulations are a “more intense version of what we underwent eight years ago, particularly after 9/11.”

The company cut about 100 staffers during the past year.

WSJ SHUTTERS BOSTON BUREAU

The Wall Street Journal is closing its nine-member Boston office due to the economic slump, editor-in-chief Robert Thomson informed staffers on Oct. 30.

“We remain in the midst of a profound downturn in advertising revenue and thus must think the unthinkable,” he wrote in an email.

He praised the “truly great reporting under the generalship of Gary Putka over many, many years” and said Beantown staffers could apply for jobs elsewhere on the paper.

The WSJ plans to keep an “investigative function” in Boston. The WSJ’s “money and investing team” will cover the city's mutual fund and the New York City education unit will pick up some of the slack.

Boston’s MarketWatch staff and Newswires bureau are not affected by the shutdown.

Thomson assured staffers there are “no plans, nascent or otherwise, to close any other U.S. or international bureaus.”

NEWSPAPER CIRC DROPS SOME MORE

Weekday newspaper circulation dropped 10.6 percent while Sunday sales slipped 7.5 percent for the six-month period ended Sept. 30, according to the Audit Bureau of Circulations.

There was an average of 44M newspapers sold each day for the first half of the year, which equals the sales level of the 1940s.

The Wall Street Journal topped USA Today as the No. 1 circulation paper.

The WSJ, which includes online subscriptions in total circ, showed a 0.6 percent gain to 2 million.

USA Today dropped 17.1 percent to 1.9M. It was hurt by the slowdown in the travel market as hotels account for a big chunk of its sales.

Rounding out the Top Five, the New York Times dipped 7.3 percent to 927,851, Los Angeles Times dropped 11 percent to 657,851 and Washington Post fell 6.4 percent to 582,844.

The San Francisco Chronicle suffered the biggest loss among the Top 25.

It was down 25.8 percent to 251,782. The Star-Ledger (-22.2 percent to 246,006), Dallas Morning News (-22.1 percent to 263,810), and Boston Globe (-18.5 to 264,105) followed.

TRIB VET WARREN TAKES CHI READER POST

Jim Warren, who was co-managing editor of the Chicago Tribune and bureau chief of its Washington bureau, took the president/publisher post of the Chicago Reader on Nov. 2.

Richard Gilbert, interim head of CR parent Creative Loafing, says the hire shows readers that “compelling and provocative journalism remains the paper’s overarching mission.” The Reader prints 100K issues that are distributed free weekly. Its website draws more than 750K weekly page views.

Warren, 56, says the Reader will thrive if it “makes those in power squirm and yet is willing to entertain and have fun.” Warren began a journalism career at the Star-Ledger and also reported for the Chicago Sun-Times. The Reader post was vacant since July with the exit of Kirk MacDonald following a change in ownership.

MCGEVERAN TO EXIT NY OBSERVER

Tom McGeveran, who took over in May as editor of the New York Observer, is leaving yearend to start a new venture. He assumed the editorship from Peter Kaplan.

Publisher Jared Kushner, via a statement, credited McGeveran for “revamping and reinvigorating our website “ and launching the Commercial Observer.

McGeveran says he will help Kushner find his replacement.

BARUCH ESTABLISHES MEDIA LAB

Baruch College, which is part of New York City’s public college system, has launched “Studio H,” a journalism laboratory thanks to a $1M gift from Harnisch Family Philanthropies.

The facility is equipped with 24 work stations with the latest in editing software plus video and digital cameras. It also has multimedia presentation capabilities.

Geanne Rosenberg, chair of the journalism department and writing professions, said the facility will "transform a program that was within the English department just a year ago into one of the nation’s premier undergraduate journalism departments.”

Ruth Ann and William Harnisch called Studio H a “bold investment” that will "produce returns that we can't yet imagine.”

AOL NAMES BOARD

AOL has named eight directors who will take their board seats when the online company is spun off from Time Warner under CEO Tim Armstrong.

The group includes Richard Dalzell, ex-senior VP & chief information officer at Amazon.com, Karen Dykstra, ex-CFO at Automatic Data Processing, Bill Hambrecht, founder of WR Hambrecht & Co. investment firm, Patricia Mitchell, CEO of the Paley Center for Media, Michael Powell, senior advisor to Providence Equity and ex-Justice Dept. chief of staff in its enforcement division, Fredric Reynolds, former CFO of CBS, Jim Stengel, owner of Jim Stengel Co. think tank, and Jim Wiatt, ex-CEO of William Morris Agency.

TW wants to separate AOL from its operations by the end of the year.

(Media news continued on next page)

WALDMAN REVIEWS STATE OF MEDIA FOR FCC

The Federal Communications Commission has tapped Steven Waldman, co-founder of Beliefnet.com religious website, to lead an initiative to assess the state of the media and make recommendations to ensure a vibrant communications landscape.

Waldman will join the FCC’s Office of Strategic Planning and serve as senior advisor to chairman Julius Genachowski.

After a fact-finding process, Waldman will develop recommendations to “make sure that all Americans receive the information, educational content and news they seek,” according to the FCC release.

Genachowski reached out to Waldman following three major reports (Knight Commission on the Information Needs of Communities, Pew Project for Excellence in Journalism and Columbia Graduate School of Journalism) that chronicled the challenges facing the media and called for “new thinking” on the regulatory front. Genachowski believes the U.S. is “at a pivotal moment in the history of the media and communications because of game-changing new technologies as well as the economic downturn.”

The FCC understands that any U.S. government support/bailout of the media will not lead to Uncle Sam “dictating or controlling the content of the news or other communications protected by the First Amendment.”

Prior to launching Beliefnet., Waldman was national editor for U.S. News & World Report and national correspondent for Newsweek. He is cutting ties with BeliefNet and News Corp., which acquired BN in 2007.

MAYS CALLS IT A DAY AT CLEAR CHANNEL

Randall Mays is stepping down as president and CFO at Clear Channel Communications, the radio giant that was taken over via a $24B deal engineered by Bain Capital and THL Partners.

Once a successor is found, Mays will become vice chairman of the country's biggest radio chain, concentrating on strategic vision.

Mark Mays, Randall's brother, is CEO of the firm that was set up by his father, Lowry, in 1972.

DEATH TO THE CHRONICLE FORETOLD

Richard Rodriguez in the November Harper’s celebrated the history of the San Francisco Chronicle, which he says under current Hearst Co. ownership is a mere shadow of its former glory.

The piece details the founding of the Daily Dramatic Chronicle in 1865 by the teen-aged de Young brothers. They launched the paper with a borrowed $20 gold piece.

The Daily Dramatic Chronicle, which morphed into the Daily Morning Chronicle, catered to the “stranded young men seeking entertainment” in the wild and wholly city that saw its population soar from 57,000 in 1860 to 150,000 ten years later, wrote Rodriguez. Oscar Wilde noted at the time: “It is an odd thing, but everyone who disappears is said to be in San Francisco.”

The Chronicle was delivered to the city’s saloons, cafés and reading rooms jam packed with news of Gold Rush City's theaters, operas, minstrel shows, circuses, brothels, shootings, bank robberies, shipping schedules, gold strikes, drownings, fires and suicides. The Chron “borrowed a tone of merriment and swagger from the city it daily invented,” according to Rodriguez.

The author called today’s version of the Chronicle a “no-nothing paper,” noting, like other newspapers, the Chronicle once had an intimate relationship with readers. Wrote Rodriguez: “The relationship between observer and observed was reciprocal: the newspaper described the city; the newspaper, in turn, was sustained by readers who were curious about the strangers that circumstance had placed proximate to them.”

Rodriguez notes that not one of four friends who recently died wanted to have a paid obit in the Chron: “As much as any vacancy in the Chronicle I can point to, the dearth of obituaries measures its decline.”

UN NOT AMUSED BY KFC PR CRASH

Kentucky Fried Chicken drew the ire of the United Nations last week after a person dressed as Kentucky Fried Chicken's beloved Colonel Sanders was dispatched by the company, slipped into the General Assembly on Monday and posed for pictures with assembly president Ali Treki.

KFC’s PR agency, Weber Shandwick, had a hand in the play as part of an effort to promote the franchise’s new grilled chicken offering.

“It should not have happened – that I will stress, and very strongly,” Michele Montas, spokeswoman for UN Secretary General Ban Ki-moon, told Canada's National Post.

Jim Horton of Robert Marston Associates wasn’t amused, either, blogging: “It is a measure of the desperation of marketers that they are doing anything to get attention.”

The U.N. has threatened legal action following the incident, which was complimented with a tongue-in-cheek letter from KFC president Roger Eaton to the secretary general asking to register “Grilled Nation” as the 193th member state.

Rick Maynard, Manager of PR for KFC, said: “KFC has the utmost respect for the United Nations and this lighthearted event in New York City was in no way meant to undermine the important work that the U.N. does around the world.”

He said the Colonel was in New York for a sampling event outside the United Nations and while serving free chicken on First Avenue was invited inside by a U.N. staff member, along with a photographer who was documenting the event.

Crain Communication’s AutoWeek has promoted executive editor Wes Raynal to editor of both AutoWeek and autoweek.com. He’s been with the title since 1989.

Taking on the role of executive editor is former Managing editor Roger Hart who slides into the executive editor role, adding responsibility as the day-to-day gatekeeper of copy flow, intermediary with the copy desk and feature assignment editor. He joined in 2000.

AW last year scaled back to a twice-a-month schedule from weekly distribution.

SORRELL RIPS PR RFP PROCESS

Martin Sorrell, CEO of advertising and PR conglomerate WPP, blasted the request for proposal process at a London confab last week for requiring PR firms to essentially pitch ideas for free unlike any other professional services field.

“Since when do McKinsey, Bain and BCG sit in front of clients and deliver for nothing?” he said at the CorpComms Magazine and PR Consultants Association meeting, according to a transcript. He noted that one global participant in a recent pitch in which WPP was involved submitted a 36,000-page document at no cost to the potential clients.

Sorrell expressed frustration that change wasn’t likely because there will always be competitors that will pitch at no cost.

He also said that other industries change pricing structure or cancel contracts when clients change the terms of service, but PR is alone in absorbing such charges.

The title of the event was “Emerging From the Recession,” but Sorrell noted in his keynote that he doesn’t think the industry has yet emerged. “But there is more confidence – CEOs and CMOs feel better. But it hasn’t translated from their hearts and their minds into a sort of check-signing ability. If you said to me what will WPP look like in five years’ time, I would say to you It will be more Asian and it will be more Central-Eastern European, more African, more Middle Eastern, more Latin American.”

Colin Byrne, who heads Weber Shandwick’s U.K. operation, said at the event that the recession, in some ways, has actually been good for the firm’s business.

“Those of you that have spent a lot of time firing people and closing up offices may not feel that way. But in boom times, PR focuses on some things with clients that still sometimes are intangible – reputation, creativity,” he said. “To some people, they’ve become the raison d’être for being in PR. And actually the raison d’être of PR is helping clients to sell stuff and helping clients to be successful.”

BRIEFS: Lewis PR has unveiled an iPhone application to aggregate technology news from around the world. Called Lewis news 360, the app is an "intuitive" news collector that provides links to tech stories directly to iPhones. ...Access IR/PR, San Diego, and The Communications Strategy Group, Boston, have formed an alliance to offer services to both firms’ clients. ...Artha Resources Corp., a Vancouver-based mining company, said it retained Bernie Kennedy Consulting for corporate comms. and marketing on a $6K a month retainer and 175K incentive stock options. ...The International PR Association has tapped Jim McQueeny, chairman of Newark, N.J.-based Winning Strategies, as U.S. representative to the London-based group. Forty-two countries are represented on the council, a group of senior PR practitioners. ...MWW Group has launched MWW Pulse, an online panel of “thought leaders” for opinion, answering questions and addressing trends in various industries.

PR SOFTWARE ROUND-UP

Cision said its CisionPoint PR software platform has surpassed 5,000 customers and is approaching 20,000 users as it marks two years since its release.

Vocus, which reported 4,001 total active subscription customers through the third quarter, has released an upgrade of its small business edition PR software to provide more custom options for users’ home page and navigation settings.

The company said the changes, like “drag and drop” options for customizing page layouts, are a response to customers who wanted to personalize the look and feel of their platforms.

Vocus also said client 7-Eleven has re-upped its pact for government relations software and the software company also said it has partnered with e-research and education publisher Gale to provide PRWeb releases through Gale sources.

PR software platform MYPRGenie unveiled new features at the Blog World & New Media Expo 2009 earlier this month.

The service now allows journalists and bloggers to sign on and search instantly for courses and other information to develop stories.

MyPRG says more than 3,000 PR pros can be queried by topic, and materials like articles, quotes and videos can be accessed.

News Release Pro, an online PR service, said Jeffrey Windler LLC, a Dallas architectural firm, has tapped the company for strategic positioning efforts.

FIRM TO TRACK NFL JERSEY SPONSORSHIP

Front Row Analytics, a sponsorship and measurement firm, has been tapped by the National Football League’s Seattle Seahawks to gauge the team’s practice jersey partnership for the 2009 season.

The firm, part of Front Row Marketing Services in Philadelphia, will track the effectiveness of the Seahawks’ sponsorship deal with Microsoft’s Big Search Engine for the ‘09 season which has the company’s logo appearing on the team’s practice jerseys. Marketing elements of the deal online and in broadcast media are among the tenets it will watch.

Joe Marsh, manager of FRA, said practice jersey sponsorships are at the “forefront” of new revenue for the NFL, which does not yet allow corporate logos on game uniforms other than the apparel designer.

BRIEFS: Business Wire said it renewed its support of the South Florida PR Network, which counts 700 members throughout the Sunshine State. The networking group said its free membership is made possible by sponsors like BW and Marketwire, among others. BW has an outpost in Plantation, Fla. ...International Association of Business Communicators said the early-bird deadline for its 2010 Gold Quill Awards is set at Jan. 27, 2010. Final deadline is Feb. 3. Towers Perrin is the sponsor of this year’s awards, which attract hundreds of entries around the world. The awards have 27 categories across three divisions of communications. Information is at www.iabc.com/awards/gq.

PR SOCIETY 3Q DOWN 45% (continued from page 1)

Senior members questioned the sudden need to defer income since the 2009 conference, like the 2008 conference, is in Q4. This year’s conference, from Nov. 7-10, is about two weeks later than last year’s.

“Registration” income for the nine months declined 60% from $2.7M to $1.08M.

Eppes said most of the decline was in the seminars/webinars business of PRS and in the 19 special interest sections.

Membership total as of Sept. 30 was 21,054.

Dues income declined 9.4% to $3,826,664 from $4,225,987.

Eppes, in his report to the Assembly delegates, but which was not in his PRSAY posting, said that PRS has created a “Hardship Program for unemployed and disabled members to reduce their national dues by $110” (from the regular rate of $225).

A monthly program of free webinars and seminars is also being offered to members, he noted, and PRS is “rolling back the registration fee” for the conference (although no new amount was given).

Membership dues can now be paid quarterly and conference registration (regular rate is $995) can be paid on an “installment plan.” Section memberships are available on a free trial basis.

There has been no mention so far of the financials in the “Media Room” of PRS. The balance sheets and income statements for the six months and first half are only available in the members’ area of the PRS website, which is now labeled “MyPRSA,” replacing “Membernet.”

Top stories in the Media Room currently are that PRS is launching an “advocacy campaign for the PR industry” and it has a redesigned website.

A PRS press release Aug. 18 announced a new two-year contract for Murray (“unanimously” approved by the board) and said “He has taken a number of concrete steps to more efficiently and effectively serve the wants and needs of our members, while at the same time achieving record financial results for the organization over the past two years.”

Form 990 Not Filed

PRS has yet to file IRS Form 990 that would show Murray’s pay, occupancy costs and legal costs. This is a record lateness for the filing which is not finally due until Nov. 15 (after the national conference). Initial filing deadline was May 15.

PRS’s Q1 income was down 11.3%; six months income down 16.9%, and Q3 income down 45.1%.

Costs, meanwhile, were down 2% in Q1; down 8.5% in the six months, and down 12.5% in the nine months.

Advertising for the nine months fell 57% to $216,416 from $510,935. Sponsorship income fell 41% to $367,923 from $628,887. Staff pay/fringes for Q3 totaled $1,363,599 or 83.2% of income for the quarter of $1,639,309. Staff pay/fringes for the nine months were $4,037,229 or 61% of income for the nine months of $6,604,585. They were $3,979,521 or $57,708 less in 2008. Payroll costs were $5.4 million in all of 2008 or 47% of overall costs of $11.4 million.

The redesigned website of PRS has removed the names of more than 45 staffers. Only seven individuals are now shown: Murray; CFO Phil Bonaventura; VP-marketing Barbara McDonald; VP John Robinson; VP Karla Voth; AVP Melissa Yahre, and VP-PR Arthur Yann.

Cherenson Rejects Audiocasting Assembly

Mike Cherenson, PRS chair, and parliamentarian Colette Trohan have argued against audiocasting the Assembly Nov. 7. Cherenson said it would be technically difficult while Trohan said it might disturb the delegates.

Senior members who have investigated audio and video “streaming” of the Assembly said costs would be only a couple of hundred dollars for “live” audiostreaming and only a few thousand for videostreamimg (assuming that fewer than 500 members tune in at any one time). Audiostreaming costs from 25 to 50 cents per person simultaneously accessing the “stream” while video costs from $2 to $4 per person. Extensive facts on video and audiostreaming are available at streamalot.com.

There would be no further costs for providing the complete record to the 21,000 PRS members and others for the indefinite future.

APCO'S KRAUS CHAIRS CPRF

Margery Kraus, APCO Worldwide founder & CEO, is the new chair of the Council of PR Firms. She succeeds Ray Kotcher of Ketchum.

Weber Shandwick’s Andy Polansky slides into the chair-elect slot.

Kathy Cripps, Council president, praised Kraus as “one of our industry’s most talented and fearless leaders.” Among Kraus’ goals: PR’s “ownership of digital media and strategy.”

Washington, D.C.-based APCO is the third largest independent firm with ’08 fees of $112.4M, trailing Edelman and Waggener Edstrom.

Kraus led the 2004 management buyout of APCO from Arnold & Porter.

The Council has announced a fresh batch of board members. That roster includes Dave Senay (CEO of Fleishman-Hillard), Donna Imperato (Cohn & Wolfe), Laura Tomasetti (360 Public Relations), Christine Barney (rbb Public Relations), Jennifer Prosek (CJP Communications) and Melissa Waggener Zorkin (WE).

SPORTS EXEC LANDS AT PEPSI

Peter Land, the former Edelman Sports exec most recently in charge of marketing the Breeders’ Cup, has moved to Pepsi North America as senior VP of communications for its beverage unit.

Land left the Breeders’ Cup in September for the Pepsi post after two years as chief marketing officer for the horse racing series.

He was with Edelman for nearly 10 years, serving as global managing director focused on its sports accounts. Earlier stints included the NBA (director of marketing comms.) and Kraft (director of European promotions), as well as Cohn & Wolfe.

The hard-hit newspaper industry is probing readers for what they want. The answer: “Watchdog reporting.” Papers that can no longer afford it are funding “team” investigators like ProPublica, Center for Investigating Reporting, and Center for Public Integrity.

A five-page article in the October Editor & Publisher details the scramble that newspapers are in to provide what many of them see as their main service—investigative reporting.

“The No. 1 thing readers tell us they want is watchdog reporting,” said Arizona Republic editor Randy Lovely.

But such reporting can be so expensive and time-consuming, involving lawsuits for information and chasing reluctant sources, that papers including the New York Times, Washington Post, Chicago Tribune and Los Angeles Times are buying in-depth pieces from the non-profit ProPublica, New York (www.propublica.org).

The NYT magazine’s cover story Aug. 30 on Hurricane Katrina’s impact on a New Orleans hospital was written by ProPublica, which has grown to 19 reporters since its founding in January 2008.

The report took two years to assemble and cost $400,000, said E&P.

The Newark Star-Ledger, which has lost a third of its news staff, has used six ProPublica stories or packages.

E&P details the carnage at big dailies (Boston Globe editorial staff down 35% to 352 reporters; Cleveland Plain Dealer down 70 reporters; Atlanta Journal-Constitution down 55 to 180; Sacramento Bee down 85 to 175, and Charlotte Observer down 80 to 170.

Readers will follow media that dig out the facts even though story subjects put up resistance.

We’re hoping the new board of the PR Society, to be headed by Gary McCormick of the Scripps organization, one of the great names in journalism, will look deeply into PRS and clear up the record on several counts.

PRS should have an investigative task force, a “truth squad” that would probe any charges of wrongful behavior and assure members and others that the Society has a squeaky clean record.

A prime candidate for investigation is the $197,247 cost of re-writing the Code of Ethics in 1999-2000.

This is an astounding figure for what was a re-write that removed the Code’s enforcement mechanism (judicial panels that heard charges).

Staff costs were $62,958. This is the equivalent of one staffer working full time on the re-write for a year. No way!

Then we have $67,477 for “overhead” allocation for the two years.

That seems excessive. Whose costs were these really?

Another big item is “travel,” meaning some actual airline and other travel costs but also meals and hotels. This totaled $29,313 for the two years. How much was meals for the staff and volunteers who were on the Ethics Board then headed by Bob Frause? How much of the $563,531 in overall “travel” costs in 2008 is really meals for the staff and leaders?

Frause again became head of the EB in 2008 when Gail Baker suddenly quite as chair in March after two months. That ought to be investigated also. Frause will be North Pacific director on the 2010 PRS board.

Another ethics re-write expense that needs looking into is $32,984 in 1999 for “professional fees.” PRS apparently paid this amount to some outside consulting firm that gave the latest skinny on ethics.

What was the firm and what did it do?

A new topic needing investigation is why is Philadelphia again scheduled for the national conference (2013) when it was just there in 2007?!

Skipped over is New York which drew a record 4,000 attendees in 2004 and which loses the least amount of money (because there’s no need to provide travel, room and board expenses for the 35 and more staffers who go to the conference).

Their names used to be listed in the conference registrants list that was provided to registrants. We can’t find any such list this year and neither can other conference registrants. Also missing: list of Assembly delegates. No one we know has been able to obtain it.

The PRS “Truth Squad Task Force” could also study the sale of authors’ works without their permission that went on for more than 15 years to 1993. We have a box full of evidence for it.

PRS is promising a “multi-year, multi-level” advocacy effort called “The Business Case for PR.” But it should clean its own flag before it starts waving it around.

The PR Society, supposedly the world leader in PR ethics, shows its true colors when it comes to reporting its finances.

Only last week did it finally report the first three quarters. The first half should have been reported no later than August.

Instead of separately reporting Q3, which showed a 45.1% decline in revenues to $1,639,309, PRS and treasurer Tom Eppes lumped it in with the non-reported first half and said revenues were down only 26.3% to $6,604,585. This forced reporters and others to subtract six-month figures from nine-months to get the quarter.

Eppes posted on the PRSAY section of the PRS site (instead of page one of the PRS site) that Q3 was really not down $1.3M because of a “significant timing difference.”

In 2008, explained Eppes, PRS had recognized in Q3 nearly $1.1M in revenue from the conference that took place Oct. 25-28 that year.

However, since the 2009 conference is in November, the revenue is “deferred until that time,” Eppes further explained.

We loved seeing that word “deferred.” Since both October and November are in Q4, why was the conference revenue booked as cash last year and as deferred revenue this year? The 2009 conference is only about two weeks later.

We think that outside CPA firm PKF put its foot down and told PRS to stop booking revenues for future services as cash.

If PKF told PRS to defer half of the $3.8M in nine months dues or $1.9M since they are also unearned, that would drop the Society’s claimed “unrestricted net assets” from $2.4M to about $500,000.

With dues income down 9.4% and PRS having to resort to a hefty price cut (letting “hardship” cases pay $110 less in dues), the Society must do more to trim costs.

Three staffers have been dismissed, says the Eppes report, but payroll costs actually grew to $4,037,229 for the nine months, the only one of 12 categories of expenses to increase.

Eppes says expenses were cut $1,159,000 but when we deduct 2009 expenses of $7,477,485 from the 2008 expenses of $8,284,876, we get only $807,391.

The reworked website of PRS now leaves out the names of all staffers except seven of the top ones so we can’t check to see who left.

Registration income is down mostly for the tutorial programs of PRS and its interest sections.

--Jack O'Dwyer