Decker, Decker & Associates, which produced The Advertiser for the Association of National Advertisers from 1991 until the publisher was terminated early this year, asserts in New York State Supreme Court that it owns one-fourth of the magazine. The ANA, calling the claims "baseless" and "without merit," has filed a motion to dismiss.
The suit asserts ANA owes Decker, a custom publishing and media consulting business run by President Jack Decker, his wife and three children, for the ownership stake, along with some past profits and commissions. The suit said The Advertiser "has a fair market value in excess of $4 million."
The Advertiser last year had ad revenue of $1,135,000 and profits of $366,000, or a 32% profit margin, Mr. Decker said. The publisher also brought in $465,000 in sponsorship revenue, or total 2005 revenue-ad sales and sponsorship-of $1.6 million, he said. Decker generated 95% of ANA sponsorship money, according to Mr. Decker.
The ANA, which represents 370 marketers spending $100 billion annually on marketing communications and advertising, in February terminated New York-based Decker as publisher of the 25,000-circulation magazine, produced six times a year for ANA members.
A month later, the association announced it had selected Pohly Co., a Boston custom-publishing, communications and marketing company, to publish the magazine. Pohly also picked up responsibility for ANA sponsorship sales from Decker.
In a February letter to Mr. Decker, ANA President Robert Liodice and Exec VP Bill Duggan said the ANA had "fundamental disagreements with [Decker] on the present management of the publication-most importantly in the editorial arena."
The magazine move is one of a number of changes made by Mr. Liodice since he took over the trade association in late 2002. On his watch, the ANA has worked to raise the group's visibility and take on key issues such as marketing accountability. Membership is at a record; the ANA expects record attendance at its October annual conference.
Mr. Decker said he pitched the idea for a magazine to the ANA, recruited the New York Times Co. to handle ad sales, and then began editing and producing The Advertiser in 1991.
The Times withdrew in late 1992. The ANA and Decker then struck a new agreement to publish the magazine as a joint venture with Decker holding a 25% ownership stake but with ANA retaining 100% of the intellectual-property rights, according to the suit, filed in June.
motion to dismiss
Decker, which took over ad sales after the Times exited, was to receive "25% of the net revenues (after certain payments to a reserve fund) from sales of The Advertiser, or income derived from the publication of The Advertiser," according to the suit.
In its motion to dismiss, the ANA asserts there was no joint venture; that the Deckers were independent contractors; that the ANA was sole owner; and that the ANA followed all contract terms in terminating Decker.
A hearing on the motion set for Aug. 29 has been postponed.
The suit seeks about $823,000 that Decker said it's owed for past profits and commissions. Decker asserts it deferred about $656,000 in profits from 1997 through 2005 and advanced about $81,000 to the magazine "at the specific insistence and request" of the ANA, with the understanding that the ANA would repay the money. The company also contends it's owed about $86,000 in commissions. In addition, it seeks at least $1 million for its claimed 25% stake.
The suit asserts Mr. Liodice, then ANA's chief financial officer, in 1997 told Mr. Decker that the ANA was in financial trouble and "pleaded with" Mr. Decker to forgo some profits because the ANA needed an infusion of capital. The ANA motion labeled those claims "fabrications," saying it was in stable financial condition in 1997. Mr. Liodice declined to be interviewed for this story.
The motion said the ANA paid Decker about $4.5 million from 1997 to 2005, a period when The Advertiser's sales were below $10 million. The motion claims the ANA paid Decker "far more compensation" than was required under the agreement.
"The various claims made in this lawsuit are without merit, as they are based on the purported existence of an oral joint-venture relationship between the ANA and the Deckers," the ANA said in a statement to Ad Age.
"While it is understandable that the Deckers are disappointed that their relationship with the ANA ended, it is disturbing that they have invented the notion of a joint-venture relationship and are attempting to use that fabrication as the basis for seeking compensation that exceeds their agreed entitlement as an independent contractor. The ANA fully expects that, upon review of the facts, the court will dismiss this baseless claim."