Primestar Inc. may lose its name when it's acquired by DirecTV later this year. But its marketing agencies are already losing far more -- a prized $100 million account.
ABP/Draft Worldwide last week lost its $60 million creative assignment, as well as its direct account, valued at up to $40 million.
And speculation is that Carat/ICG, Los Angeles, will be the next to go.
PHASING OUT PRIMESTAR
A spokesman for DirecTV said the company plans to phase out the Primestar brand name over the next two years. DirecTV spends an estimated $150 million a year on marketing efforts via Campbell-Ewald, Los Angeles, for creative and planning, and Direct Partners, Santa Monica, Calif., for direct.
General Motors Mediaworks, Warren, Mich., handles DirecTV's media placement. DirecTV is a unit of General Motors Hughes Electronics.
Another Primestar executive said it was too soon to know whether Carat, too, will be let go. But other executives close to the situation say Carat will more than likely lose the account to General Motors Mediaworks.
Carat declined to comment on the speculation. ABP/Draft confirmed that its contract with Primestar expired last week. However, it contested the amount of the billings lost. Howard Draft, chairman at Draft Worldwide, confirmed the $60 million creative figure, but argued his agency developed minimal direct work for Primestar.
The potential disappearance of the ailing Primestar brand bids adieu to one of the first and highest-spending players in the direct broadcast satellite industry.
DirecTV in January announced it would acquire Primestar's satellite assets for $500 million, as well as its 2.3 million subscriber base for another $1.3 billion. The acquisition is expected to be completed next month.
CONSOLIDATION
The Primestar acquisition comes at a time of consolidation for the direct-broadcast satellite industry, where two chief players have emerged: DirecTV and EchoStar Communications Corp.
Two weeks ago, DirecTV's chief rival, EchoStar, counterbid for Primestar's satellite assets, offering $600 million for the business. But the DirecTV/Primestar deal has already received federal approval, and most Wall Street analysts expect it to go through.
"The likelihood is low that EchoStar will win out," one Wall Street analyst said.
"Either way, the PrimeStar name is gone."
Separately, DirecTV is also slated to close a deal to acquire U.S. Satellite Broadcasting. The USSB name is expected to be phased out as well.
Ogilvy & Mather Worldwide, New York, handles USSB's $50 million creative, and Bronner Slosberg Humphrey, San Francisco, handles the direct portion of the business.
Ogilvy, Bronner and DirecTV declined comment, and a USSB spokeswoman said it is up to DirecTV to determine if both Ogilvy's and Bronner's accounts could also go
