Global Crossing is set to name Gotham, New York, to handle its branding duties once it merges with Frontier Communications. Yet it is possible Global Crossing may never own Frontier.
As the Bahamas-based telco pushes ahead with post-merger marketing plans, it is mired in a bidding contest with Qwest Communications not only for Frontier but U S West.
No matter who triumphs, Gotham wins. The agency is expected to get the Global Crossing account even if deals with Frontier and U S West fall through. Gotham will handle consumer and trade advertising, and will target new customers and the business community.
AGREEMENT EXPECTED THIS WEEK
Gotham declined comment. A Global Crossing spokesman acknowledged the company is in negotiations with an agency but declined to name it; he said the agreement would not be complete until this week.
Also believed to have been in contention for the account are DDB Worldwide, New York, which handles U S West, and J. Walter Thompson USA, New York, which handles Qwest.
The original request for proposals--sent before the bidding war began--estimated the post-merger ad budget at $40 million to $50 million. However, that figure later was adjusted downward. The Global Crossing spokesman declined to disclose a figure, but said the agency's billings would be "a fraction" of the original amount.
"While the choice of an agency could be considered premature, it actually might be a brilliant strategy," said telecom analyst Jeffrey Kagan. "It would show the confidence Global Crossing has in winning the deal and it shows the synergy--they're thinking about how this new company will build its brand and be a player."
SHIFTING THE BALANCE
In the struggle for corporate control, even small maneuvers can shift the balance of power. Just last week, Global Crossing released the Securities & Exchange Commission document that details exactly how Frontier and U S West fit into the company. Qwest has not released any details of its plans.
Global Crossing made its play for Frontier in March, followed by its deal with U S West in May. Qwest then jumped in with unsolicited offers of about $55 billion for both, trumping Global Crossing's estimated $45 billion bid.
Although Frontier and U S West had signed initial agreements with Global Crossing, the latter agreed to a waiver that allows it to have discussions with Qwest.
Both Global Crossing and Qwest are run by former highly placed AT&T Corp. veterans--Robert Annunziata and Joseph Nacchio, respectively. Each wants to buy Frontier and U S West to add heft to their bottom lines, as well as get a foot in the door with an established customer base.
Contributing: Laura Petrecca.
Copyright July 1999, Crain Communications Inc.