CALIF. LOTTERY EXTENDS CONTRACT WITH GREY

Measure Passed as Emergency Action; Agency Agrees to Cut Fees

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SACRAMENTO (AdAge.com) -- The California Lottery commission today approved an emergency extension of its contract with Grey Global Group's Grey Worldwide, Los Angeles,
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pending the successful conclusion of a long-running agency search.

Commission members unanimously approved the recommendation of its staff to accept an interim agreement with Grey to continue as the Lottery's advertising agency.

Markup reduced
Under the agreement, effective July 1, Grey will reduce its markup of 9.75% to 8.5% for all production costs and gross media buys, saving the Lottery about $19,000 per month.

Grey agreed to a short-term extension amendment, pending review of this issue by the commission, that waives its usual markup or commission for the month of June.

Grey's contract technically ran out May 31. Grey has been the agency for the Lottery for the last six years.

Meanwhile, the Lottery's $125 million, five-year advertising contract has been the subject of ferocious competition and a threatened legal challenge that have resulted in the last two preliminary decisions being thrown out.

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