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PR Losers of 2005

Each year brings a unique crop of PR losers, and this year is no different. Sometimes there are even repeat losers, as there are on this year’s list. (Here’s last year’s list: http://www.ereleases.com/pr/pr-losers.html) The purpose of highlighting PR losers is not to heap additional scorn on the already-besmirched. (OK, it’s only partly why I do it.) Instead, my goal is to remember who screwed up and why. If nothing else, we may learn something.

LOSER: Corporate America

Americans don’t trust big companies, and they trust corporate CEOs even less than they trust Congress. Accounting scandals, executive compensation issues, workers’ rights and wages, globalization, and the business world’s impact on the environment are just some of the issues that the corporate world is dealing with. Unfortunately, most companies are ill-equipped to deal with these issues, and that is a big problem. According to the Labor Research Association, a New York City-based non-profit research and advocacy organization that provides research and educational services for trade unions, only 3.5 percent of all U.S. companies employed more than 500 workers in 2004. However, this tiny percentage of companies employed 57.7 million people, or a little more than 50 percent of the workforce. The 930 companies that employed more than 10,000 people in 2004 employed a total of 31.4 million people, or 27.3 percent of the total workforce. At the end of the day, many Americans don’t trust their employers, or the companies they’re buying goods and services from. If there was ever a time to reform the way we do PR, and in turn, reform the way we do business, it’s now.

LOSER: Sony

The music industry has been crowing for years that file-swapping and piracy are destroying the business. The Recording Industry Association of America has filed lawsuits against consumers its says are illegally downloading and distributing music, and this past year, Sony BMG Music Entertainment tried to staunch the illegal flow of its music online by putting software on music CDs that prohibits users from making more than a few copies of music they’ve already purchased. Sony’s problem is that its software 1) opens up Windows-based PCs to potential attacks from hackers, and 2) sends information to Sony, violating privacy rules. Making matters worse, the patch Sony offered users to fix the problem is also flawed, and a second encryption technology Sony substituted has many of the same problems as the first. Sony sells all sorts of technology (televisions, computers, digital media players, etc.) and controls tons of content (music, film, television shows, etc.), so even though the problem is related to just one product (certain CDs), it can ripple across the company and negatively impact brand reputation, not to mention sales. More importantly, when a company says it is trying to protects artists and its own profits, and does so at the expense of consumers’ security and privacy, the end-result is going to be a well-deserved PR disaster.

LOSER: University of Colorado

Two weeks ago, I wrote an in-depth article about The University of Colorado’s PR problems, so I won’t go over them again. The good news it that CU finally cut ties with head football coach Gary Bennett, who, at best, only exacerbated the school’s problems. The bad news is that two CU athletes – a football player and a member of the track and cross-country team (the two are dating) – were recently ticketed by university police for sending racist and threatening emails to another member of the track and cross-country team.

LOSER: Federal Emergency Management Agency

No need to rehash the PR disaster that FEMA experienced in 2005. If nothing else, FEMA’s problems prove once again why strong and experienced leaders are needed at all levels of government.

LOSER: Hedge Funds

Some spectacular hedge fund blow-ups have brought new scrutiny to a highly secretive industry that controls vast swaths of capital and huge ownership interests in publicly traded companies. While the hedge fund industry has never been admired, this year’s problems may come to a head in 2006 and force the industry to come up with a PR strategy. Read that last sentence closely, and figure out a way to make some money off these people!

LOSER: Newspapers

Declining circulation, rampant plagiarism, Judy Miller, layoffs/buyouts and the pressure exerted on Knight-Ridder to sell itself has capped off another banner year for the newspaper industry. If someone publishes a newspaper and no one bothers to read it, was there really news to report?

LOSER: San Diego

When the FBI raids City Hall, the mayor resigns, a $1.37 billion pension shortfall threatens to bankrupt the city, two city councilmen are convicted of accepting bribes, and a congressman who represents the city confesses to accepting bribes, you know it’s been a bad year. Known for its beautiful weather, dynamic nightlife, world-class zoo and lovely beaches, San Diego received more bad ink in a year than most cities get in a decade. Luckily, it’s only the politicians who are the problem.

LOSER: Formula One

The international auto racing league has desperately been trying to find an audience in the U.S. for years and seemed poise to do so in 2005 as more than 100,000 packed Indianapolis Motor Speedway to watch the U.S. Grand Prix. Very few went home happy after 14 of the race’s 20 drivers refused to participate due to a controversy involving safety and tires. Refunds, apologies and accusations flew, but not before Formula One was left with oil all over its face. Bonus PR Loser points go to Formula One CEO Bernie Ecclestone, who told racing sensation Danika Patrick and the press that “I’ve got one of these wonderful ideas that women should be all dressed in white like all the other domestic appliances.” One can only wonder what Ecclestone’s wife thought of that comment. And if he’s not married, it’s doubtful anyone is surprised.

LOSER: Merck

The words “killer” and “drugs” don’t go well together if you’re in the pharmaceutical business. Merck has 6,500 lawsuits filed against it thanks to its bestselling drug, Vioxx, and thus far, things are not going entirely in the company’s favor. Throw in a scathing editorial that appeared in the New England Journal of Medicine just last week and Merck’s PR went from bad to disastrous.

LOSER: General Motors

30,000 job-cuts, nine plant-closings, a 10-year low for the stock, and the bankruptcy of the company’s biggest parts supplier equals a lot of headwinds. GM’s problems aren’t PR-related; they’re product-related. That in itself amounts to a huge PR problem. How can you get people to write positively about a company selling products that aren’t competitive and that fewer and fewer people want?

LOSER: France

After decades of complaining about what’s wrong with America (and just about everyone else), the French finally found out what happens when you ignore the problems inside of your own borders. The French government’s response to civil unrest proved that you don’t throw stones when you live in a glass house.

This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.

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