Incumbent Initiative Media Is Out

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LOS ANGELES ( -- Walt Disney Co. will award its $500 million media business to Bcom3 Group's Starcom Worldwide, according to executives close to the companies.

Starcom beat out longtime incumbent Interpublic Group of Cos.' Initiative Media North America, which dropped out of the pitch the day before because of fee issues.

Zenith Media Services, New York, was also in the pitch.

Theme parks
Starcom already handles the creative and media planning for Disney's theme park division, as well as doing corporate branding work for media conglomerate.

Disney's long association with Initiative started back in the late 1980s when the company was Western International Media, which was founded and run by Dennis Holt. Western grew into the largest independent media buying service.

After Mr. Holt sold his company to Interpublic in 1994, executives say, he continued to work closely with Disney. More recently, he pulled back from working on his prize account.

Disney executive concerns
When Lou Schultz was installed as chairman of

Initiative Media North America two years ago -- Mr. Shultz has since ascended to chairman of Initiative Media Worldwide -- his increased traveling to and from Los Angeles and Detroit concerned Disney executives, according to those close to the situation.

Senior Disney executives such as Dick Cook, chairman of Walt Disney Motion Pictures Group, have always prided themselves in being able to reach Mr. Holt quickly for any problem. But in recent years Initiative has had a number of turnovers among its Disney senior account executives -- causing more concern at Disney.

Difficult year
Walt Disney Co. has had a difficult year, chiefly because of its ABC Television Network which has been hit by lower ratings and a soft advertising market.

In addition, poor performing consumer products and home video division, has sent Disney's stock plummenting from the mid $40 a share range in May 2000 to around $20 today.