Wanted: sponsor for Winston Cup
Anheuser-busch co., Coca-Cola Co., McDonald's Corp. and United Parcel Service are among the candidates rumored to take over as series sponsor for Nascar, now that longtime backer R.J. Reynolds Tobacco Co. has asked to end its sponsorship. RJR has backed Nascar's Winston Cup since 1971 and last year signed a five-year extension to its deal. But in a statement issued last week, RJR said "our business dynamics have changed dramatically." RJR lost almost $60 million in the fourth quarter of 2002. The Winston Cup is one of RJR's most prominent marketing vehicles, and its contributed more than $100 million to Nascar since the first Winston Cup . Nascar acknowledged that RJR may no longer sponsor the series and posted a question on its Web site asking fans: "If Winston was to end its association with Nascar, whom would you want to take over as series sponsor?" Choices include automotive, beer, clothing , restaurant and soft-drink companies. AdAge.com QwikFIND aao41o
Primedia seeks `Seventeen' buyers
Primedia, in an abrupt about-face, announced Feb. 5 it would retain Morgan Stanley to "explore strategic options" for the 2.4 million-circulation Seventeen and related properties. Primedia had fielded previous overtures for Seventeen, including, according to one executive with first-hand familiarity of the situation, one from Conde Nast Publications. According to someone who was present, last week executives from Kravis, Kohlberg & Roberts, which owns a controlling stake in Primedia, assured a roomful of listeners that the company did not wish to sell Seventeen-an assurance that came as investment bankers were contacting interested parties about a sale. A Conde Nast spokeswoman would not comment. Other expected bidders include Gruner & Jahr USA Publishing, Hachette Fillipacchi Media US and Hearst Magazines. The sale price is expected to top $200 million. Seventeen remains the category leader, but it's recently stumbled a bit. Single-copy sales for the first half of 2002 declined 21.5% to 370,350. Ad pages rose 0.5% to 1,342.1 in 2002. The category has seen intense competition owing to new entrants like Conde Nast's Teen Vogue, Hachette's Elle Girl and Hearst's CosmoGirl. Media buyers and other executives say discounting in the niche has intensified. AdAge.com QwikFIND aao41t
Omnicom offers incentive to lenders
Omnicom group avoided cashing out $850 million worth of convertible notes after it sweetened the pot for creditors. The agency company offered to pay $30 extra per $1,000 of principal to noteholders who didn't take advantage of an annual early-redemption option for the notes, which are payable in 2031 unless holders redeem them early. After the offer, the company redeemed only $3.2 million of notes. The possibility of an early note redemption had been mentioned by Moody's Investors Service last summer when it announced it would review Omnicom's credit for a possible downgrade; lower ratings can increase financing costs. Analysts had speculated Omnicom would make a cash offer to avoid the buy back, although the company maintained it had enough liquidity to handle a buy back if it happened. David Doft, analyst at CIBC World Markets, speculated Omnicom will try a similar strategy with a $900 million convertible note issue that holders can take early redemption on in July.
Omnicom's DDB Worldwide, New York, axed 21 staffers across a range of disciplines. The cuts were made as part of an attempt to cut costs, an insider said. The office had employed 325 staff. Separately, Lee Garfinkel is due to join the New York office as chairman-chief creative officer in March. Mr. Garfinkel joins from the soon-to-close Publicis Groupe's D'Arcy Masius Benton & Bowles. ... Gannett Co. posted fourth-quarter net income of $347 million, up 13.6%, on $1.73 billion in revenue, up 7% from the same period a year ago. For the year, net income was up 39.6% to $1.16 billion and revenue rose 1.9% to $6.42 billion. Newspaper ad revenue grew 4% in the quarter, with classified revenue up 6% and national up 5%. USA Today also showed its first gains since 2000, a 2% increase in fourth-quarter ad revenue, and January linage looks good, he said.AdAge.com QwikFIND aao41q...A.G. Edwards, St. Louis, Mo., is looking for an advertising agency . The brokerage firm did not have a previous agency. Contenders are Omnicom shops TBWA/Chiat/Day, Playa del Rey, Calif. and DDB, Chicago, ; Havas' McKinney & Silver, Raleigh, N.C.; Interpublic Group of Cos.' Carmichael Lynch, Minneapolis; and independent Richards Group, Dallas. Chicago-based consultant Tom Collinger is handling the review. A company spokeswoman said a decision is expected in spring, but would not confirm that billings will be $20 million. It spent $2.7 million in the first 11 months of 2002, according to Taylor Nelson Sofres' CMR.