Chrysler Media Buyer Letter Raises Red Flag
NORTHFIELD, ILL.: A coalition representing accountants in broadcast media issued a heads-up today on a letter from one of Chrysler’s media buyers. The carmaker won government approval to spend $67 million on advertising during its bankruptcy, Ad Age reported in mid-May, but at a 2 percent discount to guarantee payment.
The Media Financial Management Association and its Broadcast Cable Credit Association subsidiary, obtained a letter agreement sent by BBDO to vendors. The letter referenced a supplier purchase agreement among BBDO, Chrysler Receivables, and Citibank, MFM said.
“The terms of this letter agreement appear to be very broad, covering not only a vendor’s current Chrysler receivables with BBDO, but also all prior and future receivables from BBDO or any of its affiliates relating to Chrysler or otherwise. BBDO is a part of the Omnicom Group which includes, among others, OMD, PHD and Prometheus,” MFM said. “The letter includes a clause which purports to make the agreement binding on all subsidiaries of any vendor which signs it. Execution of the letter with this language by one location could therefore bind all other company locations.”
MFM told members it could not advise them how to respond to the letter, but advised them to have the legal department review it before acting. MFM represents accounting professionals from more than 550 TV and radio stations, cable systems, newspapers and magazines in the United States and Canada. The group provides credit information on advertisers. – Deborah D. McAdams
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