CALIF. LOTTERY POSTPONES FCB VOTE; EXTENDS GREY CONTRACT

$125 Million Ad Account Dispute Drags On

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A correction has been made in this story. See below for details.

SAN FRANCISCO (AdAge.com) -- The California Lottery Commission has extended its contract with incumbent Grey Global Group's Grey Worldwide, Los Angeles, pending a decision from its legal office on its disputed five-year, $125 million general advertising contract.

The lottery commission at its meeting Tuesday postponed a vote granting the contract to Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, San Francisco, until at least its next meeting, scheduled for Oct. 4.

Grey has been asked to continue working with the lottery on a month-to-month basis for up to six months, lottery marketing director Jim Hasegawa said Wednesday.

No ruling yet
FCB was declared the apparent winner of the lottery contract in July following a review against finalists Grey, FCB sibling McCann-Erickson Worldwide, Los Angeles, and Omnicom Group's DDB Worldwide, Los Angeles.

DDB, however, protested the decision based on FCB's stated media costs. The lottery's legal office has yet to

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issue a ruling on the protest.

DDB's protest followed an earlier review for the contract that was concluded in January in which DDB was declared the apparent winner. DDB's victory, however, was contested by Grey on grounds involving media buying agency ownership. The lottery decided to throw out its first pitch, rebidding the account and declaring FCB the apparent winner.

Grey contract expires
"Because our current contract with Grey Advertising expires on Nov. 30, 2002, the commission did approve a contract extension with the incumbent agency," Mr. Hasegawa said.

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CORRECTION: An earlier version of this story incorrectly reported the lottery campaign's budget for the five-year contract as $250 million.

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