IPO planned for Dreamworks unit
Dreamworks SKG announced long-awaited plans to spin off its animation division, holding an initial public offering in early fall. The move, anticipated for months, is intended to raise as much as $650 million in common stock. Analysts said the timing capitalizes on the huge box office numbers of "Shrek 2," and hedges bets on the upcoming October release of the underwater mob-themed "Shark Tale." The IPO, filed with the Securities and Exchange Commission July 21, is Dreamworks' attempt to play in the big league of animation powerhouse Pixar Animation Studios. "They're looking for a Pixar-style valuation," said David Miller, an analyst with Sanders Morris Harris. "Whether they receive it or not is up in the air at this point." AdAge.com QwikFIND aap83d
Schwab back on top of company
Charles Schwab Corp. founder Charles E. Schwab returned to helm the company, replacing CEO David Pottruck. Mr. Pottruck was dismissed by the board of directors shortly before the company announced a 10% drop in net income during the first half, in spite of a 9% increase in revenue. Mr. Pottruck, a 20-year Schwab veteran, started as exec VP-marketing and advertising. Schwab has battled sliding market share as online rivals pick up discount clients with cut-rate fees as low as $8.95 per trade. It recently joined the price fight with ads touting its own Trades for Less platform, with prices as low as $9.95 per trade.
AT&T scales back consumer business
Megabrand AT&T is setting out on a new marketing strategy which will mean the end of its long run as one of the world's premier consumer brands. AT&T Chairman-CEO Dave Dorman said last week the company will adopt a new strategy focused on its higher-margin business-to-business efforts. "The fact is the residential telecom market has transformed by competition to a market of bundles with more than 40% of American households now taking some form of bundle service and the number is growing rapidly," with new services including video, wireless and broadband, Mr. Dorman said. AT&T severely cut its ad spending from 2002 to 2003, according to TNS Media Intelligence/CMR. B-to-b spending dropped 63.1% to $14.9 million in 2003. Consumer advertising dropped 47.1% to $122 million in 2003. WPP Group's Y&R Advertising, New York, handles. AdAge.com QwikFIND aap83e
J.P. Morgan Chase cuts to four shops
J.P. Morgan Chase, the official entity created from the July 1 merger of J.P. Morgan Chase & Co. and Bank One Corp., is in discussions with a short list of four agencies to handle advertising for its retail bank business, according to executives familiar with the matter. The four shops involved are: independents McGarry Bowen and Gardner Nelson & Partners, both New York; Omnicom Group's BBDO, New York, and Interpublic Group of Cos.' Hill, Holliday, Connors, Cosmopulos, Boston and New York, said knowledgeable executives. According to TNS Media Intelligence/CMR, J.P. Morgan Chase spent $43 million in measured media in 2003; Bank One spent $143 million. Presentations are set for the second week of August. AdAge.com QwikFIND aap82y
Sen. Ron Wyden, D-Ore., last week delayed any confirmation vote on President Bush's appointment of Deborah Majoras as new chairman of the Federal Trade Commission and Jon D. Liebowitz as an FTC member. September at the earliest the vote could take place. The move could leave current chairman Timothy Muris in charge until November election results are known.