J. W. Thompson Loses Part of Bally’s Account : Advertising: The move is a blow to the agency’s struggling L.A. office, which may see layoffs.
The local ad agency that has flaunted Cher’s belly button and Raquel Welch’s waistline in ads for Holiday Spa Health Clubs will no longer place about $50 million worth of its ads annually on TV and in newspapers.
Bally’s Health & Tennis Corp., parent to Holiday Spa and one of the West Coast’s largest advertisers, has handed its media buying business to the largest buyer of spot TV time in the nation--Western International Media Corp. The service was previously handled by the local office of the ad firm J. Walter Thompson, which continues to create ads for the company.
The move is a blow to the agency’s struggling Los Angeles office, which says it parted with the health club chain because Bally’s was unwilling to revise its payment schedule. The chain, owned by financially ailing Bally Manufacturing Corp., operates locally as Holiday Spa Health Clubs and in other markets as Jack LaLanne, Scandinavian, Pacific West and President’s Health Clubs. These health clubs have generally been profitable.
JWT just completed a series of ads for Holiday Spa featuring Raquel Welch in which the actress boasts about being fit at age 52. It is unclear, however, how much longer the agency will continue to produce ads for the chain.
“I don’t know that right now,” said Arthur Quinby, senior vice president and director of marketing at Los Angeles-based Health & Tennis, which operates 320 health clubs nationally. “I don’t have to make that decision for awhile.”
For JWT, which is owned by the troubled British ad and marketing conglomerate WPP Group, the move could result in more layoffs in its Los Angeles office. “We’re not going to make any decisions on that right now,” said William M. Lane, general manager.
Earlier this week, WPP announced layoffs of 40 jobs at JWT’s London office, and Scali McCabe Sloves, another troubled WPP agency in New York, is expected to announce the layoff of about 30 employees later this week.
JWT’s Los Angeles office, meanwhile, has yet to fully recover from its loss earlier this year of the $29-million 20th Century Fox Film Corp. media buying business.
Bally’s Quinby said he had “no problems” with JWT’s Los Angeles office. But he said senior management from JWT’s New York office “blew into town” and pressured Bally’s to pay cash up front for all of its advertising time and space. Quinby denies that Bally’s was behind in paying its bills, but industry executives say that is what led to JWT’s unusually firm payment demands from a client it has worked with for 16 years.
This is generally the time of year when health club chains advertise most heavily.
For Western International, the win marks a fitting finish to one of the best years in the company’s 20-year history. “We’re incredibly excited to get the Bally’s business,” said Dennis Holt, president of Los Angeles-based Western. “We hope we can be with them the rest of their life.”
That life, however, has recently suffered some financial setbacks. Parent firm Bally Manufacturing Corp. failed to make an $18.4-million interest payment due less than two weeks ago and recently met with bondholders to work out a restructuring.
Holt said his firm, which employs about 400 in Los Angeles, would do little hiring as a result of the win. “Our whole system absorbs the win,” said Holt, referring to Western’s 25 other U.S. offices.
