Focus Media faces $3 million dilemma

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Focus Media, Santa Monica, Calif., has been up to a year late in paying TV stations and at least one cable network for $2 million to $3 million in advertising time, according to a number of media executives.

The development follows Focus' loss of its $85 million DreamWorks Pictures account last fall and the $50 million Universal Pictures business late last year. The media shop is also in the thick of a review for client Sears, Roebuck & Co., which is in the process of consolidating its massive $1.6 billion media account.

According to agency, TV station and TV collection-agency executives, payments for commercial time are severely overdue for business placed by Focus for DreamWorks, Universal and King World Productions, a TV producer and syndicator that remains a Focus client.

"Several of our stations have a sizable amount of bills outstanding with Focus," said a TV executive at the national sales rep company.

At least $500,000 in TV spot advertising payments are owed to TV stations for DreamWorks media buys. The Hollywood studio is in a legal dispute with Focus concerning advertising buys during the fourth quarter of 1998 and first quarter of 1999 for theatrical movies "Antz" and "Saving Private Ryan." Focus claims, according to executives close to DreamWorks, that the client paid them no agency fees for those buys. DreamWorks has responded that it has paid media invoices properly.

DreamWorks executives would not comment; David Berke, a Los Angeles-based attorney representing Focus Media, didn't return phone calls seeking comment.

Focus handled all DreamWorks' national and spot TV business before the account moved to GSD&M, Austin, Texas, in fall 1998.

IN ARREARS FOR UNIVERSAL

TV stations also claim they are owed payments for media bought on behalf of Universal's summer 1999 release, "Dudley Do-Right," estimated by one studio executive at $500,000. But a Universal executive who asked not to be identified said there is no current legal issue with Focus. Instead, the studio is trying to help stations by insisting that Focus make payments.

Focus' seeming financial difficulty also appears to have affected Universal's current spot TV buys, which ended up at DDB Worldwide, New York, after the business left Focus.

"You can't get some Universal TV spots placed," according to a TV executive. DDB, which has handled Universal's national media buying since 1997, declined comment.

Focus also is estimated to be at least $1 million behind on media payments for client King World, the TV producer and syndicator of shows such as "Jeopardy!" and "Wheel of Fortune." At least one cable TV network hasn't been paid for King World commercials touting its syndicated shows.

There is one account, however, on which Focus is making timely payments: Sears, Roebuck & Co. A TV collection executive said payments were up to date for the retailer, which uses Focus for its cable TV, syndication, spot and Hispanic media buying.

Focus clearly is aiming to stay in Sears' review. Sears has asked at least two of its roster agencies -- Ogilvy & Mather Worldwide and Young & Rubicam's Media Edge, both New York -- to pitch the business.

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