The Week

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Graphics company exec pleads guilty

Lori montgomery, an owner and treasurer of Queens, New York - based graphics services company Quality House of Graphics, pled guilty on Oct. 7 in U.S. District Court, Southern District, to one count of conspiracy as a result of her participation in a bid-rigging scheme. "Ms. Montgomery is no longer working for the company. We have also been assured by the government that Quality House of Graphics will not be charged with any wrongdoing," said a spokesman for the company. On Oct. 9, in the same district and court, Lawrence Scaglione, an ex-purchasing agent at WPP Group's Brouillard Communications, New York, pled guilty to 18 conspiracy, commercial bribery, mail fraud, witness tampering and tax evasion charges in connection with his receipt of kickbacks. QwikFIND aao08p

`Mutual Funds' `Upside' close

The ongoing ad downturn for magazines forced the shuttering of two titles on Oct. 7-Time Inc.'s Mutual Funds, and the San Francisco-based Upside. Michael Dukmejian, publisher of Mutual Funds, said "the [mutual-funds] category just evaporated," with that industry's ad pages down 80% since Time Inc. purchased the title in 1998. The closing of Mutual Funds came as Time Inc. shuffled publishers, with Mr. Dukmejian moving on to Money, replacing Kathy Kayse, who is now publisher of People. Separately, People Associate Publisher Paul Caine was named publisher of Teen People, replacing Anne Zehren, who is taking a leave of absence. QwikFIND aao08m

Publishers flock to bid on Weider

On oct. 8 fitness magazine publisher Weider Publications confirmed it was exploring "strategic alternatives" for its publications, which include Shape and Men's Fitness. A prospectus had circulated for a couple of weeks. Preliminary bids came due late last week and company presentations to bidders begin this week. According to executives who've seen the figures, the company projects cash flow of around $27 million this year on revenues of about $135 million, which could portend a sale price topping $250 million. Interested parties include Hachette Filipacchi Media U.S., American Media and several private-equity players including former Primedia CEO William Reilly's Aurelian Communications as well as an effort headed by ex-Time4Media CEO Jason Klein. QwikFIND aao08h

FCC rejects DISH-DirecTV deal

The $16 billion DISH Network-DirecTV merger was rejected by the Federal Communications Commission, as expected, potentially opening the door for Rupert Murdoch's News Corp. to revive its bid for DirecTV. FCC Chairman Michael K. Powell said the combination of DISH, controlled by EchoStar Communications Corp., and DirecTV, controlled by General Motors Corp.'s Hughes Electronics Corp., "would eliminate an existing viable competitor in every market in the country." The ruling seemed a likely deal-killer, but FCC allowed EchoStar and Hughes 30 days to file an amended plan. The companies said they would continue to seek FCC approval of the merger. Interpublic Group of Cos.' Deutsch LA, Los Angeles, handles DirecTV creative. Havas' Euro RSCG MVBMS, New York, handles DISH Network.

Gemstar founder, CFO step down

Gemstar-tv Guide International founder-CEO Henry Yuen and his longtime chief financial officer, Elsie Leung, stepped down from their positions, as News Corp. tightens its control over the company. The company's board last week approved a measure essentially forcing Mr. Yuen and Ms. Leung out of their positions in exchange for cash and stock, although the two retain their seats on the board. Mr. Yuen will be replaced by Jeff Shell, a former News Corp. executive who became Gemstar's co-chief operating officer in April. Ms. Leung will be replaced by Paul Haggerty, News Corp.'s exec VP-finance.


Dow jones & co. management warned ad lineage at the flagship Wall Street Journal will be down in the mid- to high-teen percentage rate for the fourth quarter and more layoffs will follow, after the company posted weak results. Net income for the third quarter dropped 85.6% to $2.4 million, and revenue was down 11.4% to $352.4 million. ... Rick Carpenter, 44, president, Omnicom Group's DDB Los Angeles, will take over as head of the office following the retirement at year's end of Dave Park, 60, CEO, who joined the company in 1988. The switch comes at a time when the office, with 160 employees and reported billings of $800 million, is fighting to win the $125 million, five-year California Lottery account. ... Sears, Roebuck & Co. last week named former eToys and PepsiCo executive Janine Bousquette, 41, to the new position of exec VP-chief customer and marketing officer. She replaces David Selby, Sears' marketing chief, who left the company, Sears said. Ms. Bousquette was most recently at eToys as exec VP-chief marketing officer. QwikFIND aao08k... Three longtime Chicago ad agency executives have formed a virtual agency under the Raindance Advertising shingle. Sharon Elliott, Kathy Evans Wisner and Shelley Timm-Thompson combined their experiences from Interpublic's Foote, Cone & Belding Worldwide; Omnicom's DDB, Rapp Collins Worldwide and Cramer-Krasselt and already are working with Harley-Davidson Financial Services, Easter Seals and Mass Mutual...American Honda Motors Co., in an unusual effort, produced an in-theater commercial using IMAX technology. QwikFIND aao09a

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