Ultimately, the issue appears to be this: how long will stations continue to pay reps commission fees when agencies go direct?
Both BJK&E and Katz hoped an April 10 memo sent by the agency to its six regional offices would conclude the issue. In that memo, BJK&E says it will continue to go direct but will allow a rep sit in on negotiations.
A MEANINGLESS GESTURE?
But in the end, that could be meaningless as far as the reps are concerned.
"You'll find no stronger supporter of our rep-TeleRep-than us," said a TV station general manager, "and I will fight tooth and nail to get agencies to deal with them. But when push comes to shove, and I'm going to lose a big piece of business if I don't deal direct, then I'll deal direct. And I don't want to pay my rep if he's just standing there while my guys are doing the deal."
The brouhaha started about three months ago, when David Bell, now chairman-CEO of Bozell Worldwide, a sister unit of BJK&E Media under Bozell, Jacobs, Kenyon & Eckhardt, fired off a letter to stations announcing the agency was going to deal direct for its clients. The principal account affected was Chrysler Corp.'s Jeep/Eagle dealers.
Katz executives claimed BJK&E was inducing the TV stations to break their contracts with the reps, who are authorized to deal with the agency on a station's behalf. Lawyers from Katz and BJK&E met earlier this month to resolve the problem, with the April 10 memo the result.
The memo seemed to resolve one issue-"because it means we can get our commission," said the president of one rep firm. But the bigger issue for reps is to keep agencies from going direct.
EARLIER DISNEY MOVE
Another multimillion-dollar account, Walt Disney Co.'s Buena Vista Distribution, earlier was taken direct by Western International Media.
To stop such actions, said an executive at another rep firm, the reps need to do a better job of educating advertisers.
"Our message is that the most efficient way for them to buy spot TV is through us," he said. "They won't be getting better deals by dealing directly with the stations; that's an agency canard."
Plus, he added, "Most stations don't want to deal directly; they don't have the manpower."