Peltz Likely to Flex His Muscles On Board, Not Times Front Page

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These days, investor Nelson Peltz makes headlines for two reasons. First, his proxy battle with H.J. Heinz Co. appears likely to give him at least two seats on the board. Second, a public filing has revealed that Peltz owns 2.85 million shares, or a 1.2 percent stake, in Tribune Co., publisher of the Los Angeles Times.


Media purists who worry that Peltz may want to make headlines by writing them should rest easy. With nearly every investment, Peltz tries to change the company some way, but only on the strategic level, and always with a strictly financial objective. He realized his first major fortune in 1997 by purchasing Snapple from Quaker Oats Inc. for $300 million and selling it in 2000 for $1.5 billion.


At Heinz, he wants better marketing for the iconic brand-name pickles and ketchup. Likewise, earlier this year, he demanded that Wendy’s International Inc. sell or spin off its Baja Fresh and Tim Hortons restaurant chains. The company has announced a deal with Peltz that includes giving him three board seats.


At Tribune, Peltz has the chance to leverage his investment into substantial control. The Tribune board remains split into two factions: three members who represent the interests of the Chandler family, original owners of the Times, and another eight members loyal to Chief Executive Dennis FitzSimmons, who also oversees the estate of Robert McCormick, founder of the Chicago Tribune.


A board presence would give Peltz some powerful swing votes in the battle over how to move the company forward. The Chandlers have advocated splitting the company into broadcast and publishing operations, while the McCormick faction insists on the current strategy of TV-print integration.


Peltz doesn’t buy into companies to maintain their status quo. With Tribune, he could side with the Chandlers or cook up his own strategic alternative.


Either option could benefit investors at least in the short term.


Even in light of the Wendy’s and Heinz episodes, “we do not know if Peltz plans to take a similarly activist role regarding his Tribune investment,” wrote Merrill Lynch analyst Lauren Fine in a note on Aug. 15. However, “given Peltz’s background and the previous call for action by the Chandler family, Tribune shares are likely to react somewhat positively as speculation will again surface on ways to unlock value. While acknowledging the stock could get a boost, we are hesitant to pursue the stock given our limited sense of upside.”



Double Play


What do sausages and screenplays have in common?


Not much, unless you’re TBWAChiatDay Los Angeles, the creative ad shop that won two major accounts in a mere 48 hours. On Aug. 15, Sara Lee Food & Beverage selected the agency to handle its Hillshire Farm brand. Two days later, TBWA won the poshest prize in the L.A. media market, becoming the agency of record for the Oscar Awards telecast next February.


The victory marks the first time the Academy of Motion Pictures Arts & Sciences has hired an ad agency to produce a complete promo package for the Oscar show, which will air on ABC, a unit of Walt Disney Co. The campaign will include television, outdoor and print advertising.


“The Oscars are one of the ultimate global brands with the power to capture people’s imagination,” said Carisa Bianchi, president of TBWAChiatDay Los Angeles. “This is a dream assignment.”


The agency will also crank out the creativity for the Jimmy Dean, Ball Park and Senseo food brands at Sara Lee. “The agency has been at the center of our recent success with the very popular Jimmy Dean brand, and we expect that our expanded partnership will deliver similar results across our other businesses,” said Kim Feil, chief marketing officer at Sara Lee.


Also, TBWAChiatDay will assist in strategic ad development for the Hillshire Farm brand lunchmeats, sausages and other meat products. The agency will handle all advertising for the brands television, radio, print and outdoor.



Boots Scootin’


On Aug. 17, the last country and western music station in Los Angeles went silent, if only for a second. Emmis Communications Inc., owner of KZLA-FM (93.9), instantly switched the station to a “Rhythmic Pop Contemporary” format featuring DJ Rick Dees in the morning. With musicians like Beyonce, Gwen Stefani, Jennifer Lopez, Black Eyed Peas and Janet Jackson, the signal will sound like a slew of other pop stations in the L.A. market.


Given Los Angeles County’s population of 10 million people, it’s hard to think KZLA couldn’t attract enough urban cowboys to turn a profit. According to Arbitron, the station ranked 20th in total listeners among the 80 FM station in the L.A. market. Concerts and records by country artists continue to sell well in Southern California.


But for Emmis, the move may consolidate its position in the national radio market. The company has five stations in Austin and four in St. Louis both natural country markets but none broadcast in that format. Of the company’s 23 stations, only two still play country one in Indianapolis, the other in Terre Haute, Ind. Here in Los Angeles, the format switch moves KZLA closer to sister station KPWR-FM (105.9), a hip-hop outlet.


But the decision opens up space in the market for an entrepreneur with a broadcast license, or one of KZLA’s former competitors. With a big enough antenna on their pickups, L.A. residents might be able to grab the signal of KHAY-FM (100.7) in Ventura or KFRG-FM (95.1) in Riverside.



This and That


Radio Disney is now available by streaming broadcasts on the iTunes Radio Tuner. The network broadcasts in Los Angeles on KDIS-AM (1110). Amy Levy Public Relations recently won two local accounts: Joanie’s Smiles, a brand of tea-infused chocolate bars; and the LA Femme International Film Festival, which starts Oct. 6. Los Angeles-based Live Nation Inc. has sold three divisions SFX Television, SFX Events and SFX Tennis to Kentucky-based private equity firm Blue Equity LLC. The move reflects a “strategy to focus on our core businesses of live music concerts, venue management and website brand development,” said President Michael Rapino.



Staff reporter Joel Russell can be reached at

[email protected]

or at (323) 549-5225, ext. 237.

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