Hasta La Creative!

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Walt Disney is going to spend its way out of its problems.

The world’s largest entertainment company on Thursday warned that profit in the new fiscal year just underway will be hurt by investments in theme parks, movies and TV shows, including programs for new streaming services set to debut in 2018 and 2019. The good news: The company is already working on a new “Star Wars” film trilogy.

A wicked hurricane season, falling advertising sales and a canceled movie sapped fourth-quarter profit at Disney, the company said, leading to the first drop in annual results since the financial crisis almost a decade ago. The downdraft from bad weather, lower ad sales and a tough year for movies was too powerful even for Disney, which counts on TV, theme parks, consumer products and its famous studio to fuel growth.

Continue reading at AdAge.com

Here’s an interesting one from North Dakota.

State tax commissioner Ryan Rauschenberger was arrested for drunk driving on October 6. Two weeks later, his constituents first heard the news when he announced that he would be pleading guilty and spoke to local press outlets:

“I had actually unfortunately made two poor decisions: One was to drink, and the second, of course, was the fact that I drove. I had not been in any direct treatment, and I feel like I had let that go as far as not going to as many meetings or not going to a regular counselor like I had been for a long time. I essentially took a lot for granted.”

He also released a statement reading, “I am grateful to my family and friends who have supported me as I have dealt with the challenges of my addiction.”

The relevant part about this story, according to local blog NDXPlains, is that Bismarck-based agency Odney Advertising wrote the statement for Rauschenberger. Governor Doug Burgum also reportedly knew about the arrest well before he went public. Blogger Tyler Axness writes:

Not only did the Governor’s office know about Rauschenberger’s arrest on or before October 6th(two full weeks before the public), they allowed you to remain in the dark. That silence allowed a lobbying and advertising firm, Odney Advertising, to craft a politically correct statement for Rauschenberger to give to hand-selected media at a determined time.

This would not be a new development for Odney, which calls itself “a full service agency producing results for our clients through smart advertising, marketing and public relations.” Clients listed on its homepage include Bobcat Tractors, North Dakota Tourism and anti-smoking group NDBreathe.

In 2014, the agency confirmed that it had provided talking points to Rauschenberger when he went on a leave of absence to receive treatment for his alcoholism.

Axness writes in his blog post that it’s unclear which entity is paying Odney for its services in this case: the state, Rauschenberger’s re-election campaign or the North Dakota Republican Party.

We reached out to agency president Pat Finken, who stated that, while Odney has counted Rauschenberger as a client in the past and worked on his campaign, he personally wrote the statement as a favor to a “family friend” rather than an agency project. He also said that he wrote it on the same day the news broke.

Finken also donated $5000 to Rauschenberger’s campaign three years ago. The tax commissioner is up for re-election again next year.

As we all know, the relationship between agencies and production companies is something of a “can’t live with them, can’t launch our own full-service unit” sort of thing.

And it may be getting a bit more tense as clients tighten their budgets.

Specifically, one source claims that certain unnamed agencies have been asking production partners to work on their biggest campaigns of the year for free.

This party, who has a long history in the agency world, told us that agencies have approached production companies regarding their upcoming Super Bowl campaigns with an unusual request: front us the work and we will pay you later.

Details remain somewhat sparse, but the claim is there’s an understanding that production companies will get the money they’re owed for the work … at some point. One source speculates that this movement stems, in part, from clients moving toward 120-day billing terms at a time when agency profit margins are growing slimmer and agencies simply don’t have the money to pay for the work until the client gets their fees to them. Grey reportedly quit the Coty account for this very reason.

According to several parties who’ve discussed the matter with us, production work is now the most—if not the only—profitable department at many agencies. And this narrative is very similar to tales from the Department of Justice’s ongoing investigation into the practice of “bid rigging” by which large agencies divert such work to their own in-house studios. In those cases, the shops allegedly do this while promising that they will steer project toward the same production companies at some future date in exchange for participation in a rigged bidding process.

Then, of course, there’s the matter of actors unions accusing holding group production units of finding ways to avoid casting union talent in campaigns.

A veteran of the production company world tell us that this sort of thing has happened in the past, but never for a project as big-budget or high-profile as a Super Bowl campaign.

In one such incident, an agency allegedly sent its production company a spec spot project, stating that they would only get paid if the client chose to run the ad (they did).

We’ve reached out to multiple parties regarding this latest claim. The anonymous tip box is on the right.