Advertisement

The Wizard of Spin

TIMES STAFF WRITER

Michael S. Sitrick was more than willing to try to orchestrate this story. After all, it’s what he does.

Within hours of hearing that an article about his pricey public relations firm was in the works, Sitrick was on the telephone lining up satisfied clients to sing his praises.

He volunteered to drive to a reporter’s office, where he breezed through an interview, artfully recasting negative questions to keep from getting cornered and occasionally ducking into the safe harbor of off-the-record rather than issue a stodgy “no comment.”

Smiling confidently into a newspaper photographer’s camera, Sitrick half-jokingly suggested that a serious pose might be better for a guy who makes a living dealing with crises.

Advertisement

It was all part of what this media doctor regularly prescribes for businesses and Hollywood stars that are making financial news--or who have one foot in bankruptcy or criminal court.

“If the story is going to be done,” Sitrick said, “it’s suicidal not to talk to the media.”

When Santa Monica-based National Medical Enterprises had to explain why FBI agents were searching its offices, the call went out to Sitrick & Co. Businessmen Lee Iacocca, Kirk Kerkorian and America’s Cup financier William Koch are clients, as is TV’s “Frasier,” Kelsey Grammer.

Actress Kim Basinger used the firm to help manage media inquiries when she declared bankruptcy. In late June, Sitrick surfaced as spokesman for Montana businessman Dennis R. Washington and oil and entertainment investor Marvin Davis, two longtime clients who are butting heads with takeover expert Boone Pickens over control of Mesa Inc.

Advertisement

And, when Orange County’s financial meltdown late last year ignited a media frenzy, frantic officials followed their high-powered bankruptcy attorney’s advice, engaging Sitrick.

Sitrick became the news, however, when his Los Angeles-based public relations firm charged Orange County $450,776 for two months’ work. The county eventually agreed to a $370,000 payment.

But the 48-year-old public relations executive was back in the media spotlight in the spring when UC Irvine briefly engaged him for advice on handling the media firestorm driven by the UCI medical center’s fertility clinic scandal.

Clients describe Sitrick, who charges $350 per hour, as good but expensive.

“You don’t want the meter running for a long time when Mike is on the case,” said Paul Hitzelberger, vice president of Orange-based Del Taco Inc., one of the dozens of Southern California firms that have hired Sitrick to deal with the scrutiny that bankruptcy filings generate.

Sitrick won’t discuss his firm’s billings, but a public relations trade journal describes Sitrick & Co.'s 30-person shop as one of Los Angeles’ largest agencies. More than half of its work comes from crisis management; 25% deals with companies or individuals who have entered bankruptcy.

Much of Sitrick’s work on bankruptcies is behind the scenes, helping to manage communications with terrified employees and anxious creditors.

But a big part of what Sitrick does is try to convey the company line to the public through a skeptical media. It’s a nettlesome process that occasionally puts Sitrick out in front of the client.

Advertisement

That’s what happened in Orange County on Dec. 6, when his firm unexpectedly popped up at the county’s Hall of Administration just hours before the unprecedented bankruptcy filing. Local reporters, who previously had enjoyed relatively easy access to county officials, immediately grumbled that Sitrick was erecting barriers around key newsmakers.

Sitrick maintains that his firm actually helped reporters gain access to important information they needed to write accurate stories.

To his critics, Sitrick is a “spin doctor” who’s paid to put the best possible twist on bad news--just as a baseball club manager shrugs away a losing season by blaming injuries, or a president blames a boneheaded decision on political enemies.

Sitrick, however, sees his role as helping his clients get their messages across.

“I can give you a set of facts and you can write a story from the most negative through to the most positive--from the same set of facts,” Sitrick told a reporter. “What we do is put together the facts. What we do is no different from what the trial lawyer does.

“In a fashion, we try to convince you of our client’s case,” Sitrick said. “You’re the jury.”

Sitrick was a tough competitor when he was growing up in Chicago, recalled his brother Ron, 39. While he wasn’t afraid to use his fists, Sitrick also had an uncanny ability to reason with “some very unreasonable people,” his brother said.

“He might wear expensive designer suits and be very polished today, but he spent much of his childhood on the South Side in a tough neighborhood,” said the Chicago lawyer. “He had to do some street fighting in his youth. And he was always protective of me and my other brother.”

Advertisement

Sitrick did some reporting for the now-defunct Baltimore News-American and the Washington Star while attending the University of Maryland during the early 1970s. But after graduation, he moved immediately into public relations, first for the state of Maryland, then in the administration of legendary Chicago Mayor Richard J. Daley.

His role as a crisis public relations manager stems from high-profile work Sitrick did during the 1980s while handling media affairs for businessman Sanford C. Sigoloff when Wickes Cos., the Santa-Monica based furniture retailer, entered its complex bankruptcy.

In 1989, Sitrick left Sigoloff and opened his own agency, building a list of clients that has included Roy Disney’s Burbank-based Shamrock Holdings, the now-defunct Executive Life Insurance Co. and the MGM Grand in Las Vegas.

In 1993, Sitrick’s firm was called in to help when FBI agents raided National Medical Enterprises Inc. (which subsequently changed its name to Tenet Healthcare Corp.) The company later settled charges that it had paid bounties to procure patients.

How was it possible to have FBI agents swarming over a building one day and have the company’s stock soaring shortly after?

“We didn’t spin anything,” Sitrick said. “We put together factual information which [NME] didn’t see as significant [for the news media] but that we knew was significant.”

What Sitrick first did was persuade top managers to speak frankly to the media. He then helped develop a plan that redirected the focus of news stories from the FBI fraud investigation to what the company was doing to solve its problems.

Even satisfied clients acknowledge that Sitrick can’t make bad news go away.

“Mike can’t turn the world around, he can’t even prevent news coverage that you don’t like,” said Washington lawyer Stephen E. Case, who advised beleaguered businessman Herbert Haft to hire Sitrick to publicize his side of the Haft family feud for control of Laurel, Md.-based Dart Group, which owns Crown Books and Trak Auto.

USC Prof. Carolyn Cline, who teaches public relations courses, doubts that it’s possible to spin truly bad news.

“Spin implies something that’s not real,” Cline said. “You have the most to gain by being truthful. . . . Telling the truth establishes the public relations person or the [troubled company] as an honest force for future dealings. Once you lose credibility, you don’t get it back.”

But not all deals end up as tidily as Sitrick hopes.

That was the case in 1993, when Sitrick represented Bill Koch, the wealthy businessman who went on to stun the sailing world earlier this year in San Diego by bankrolling the first-ever all-women America’s Cup crew.

In September, 1993, Sitrick issued a press release declaring Koch’s unsolicited bid for partial ownership of the historic but troubled MGM studio--the first time MGM owners heard of his interest.

The high-profile announcement was “definitely not PR’s finest hour,” said a competing public relations executive. “In a case like that, Koch should have been advised to approach [MGM’s owner] discreetly. The whole thing laid a giant egg.”

Sitrick said he stands by the advice he gave to Koch, but declined to detail his involvement.

He also drew media heat when he played a role in the highly publicized travails of Bruce McNall, the Los Angeles businessman with interests in hockey and horse racing who last year was forced into bankruptcy. McNall surprised Los Angeles sports fans in December when he pleaded guilty to fraud charges related to his troubled business dealings.

Even as McNall was agreeing to enter bankruptcy, attorneys for a major creditor suggested that a public relations push on McNall’s behalf was designed to put a positive face on the filing.

“His spin doctors are going to say he voluntarily did this to help his creditors,” Los Angeles lawyer Robert A. Meyer said at the time of the bankruptcy filing. “That’s nonsense. The reason this happened is we chased him into bankruptcy court.”

Sitrick countered that his firm never attempted to mislead reporters about McNall’s financial situation. “Our job was making sure that the rumor mills didn’t take control and supersede the situation,” Sitrick said. “I’m comfortable now that, in fact, we provided information that was accurate and reflective of what in fact was happening.

“Was I surprised by his guilty pleas [to fraud]? Sure I was surprised. That was nothing that we ever dealt with.”

Sitrick also acknowledged the friction that exists when reporters wonder if he’s telling all he knows in high-profile cases. “It’s not my job to tell reporters everything,” Sitrick said. “But it is my job to make sure that they’re not misled.”

Media advisers agree that as more outlets concentrate on financial news, business leaders are looking for experts who can help shape coverage when controversial news breaks.

Judi Lapin, a former television news reporter who’s now a vice president with Newport Beach-based mall operator Donahue Schriber, says that troubled organizations often need professional advice because people “are more sophisticated when it comes to using the media for their own gains. . . . People know how to use the media as a weapon.”

While Sitrick’s clients believe he has exceptional access to the media, reporters counter that it’s the news, not the messenger, that determines what gets printed every day. Sitrick does, though, push hard to influence stories in ways that benefit his clients.

Henry Dubroff, business editor at the Denver Post, credits Sitrick with tipping his staff to important stories involving two of Colorado’s major ski resorts. Sitrick’s phone calls, Dubroff said, are never dull.

“You know it’s going to be fascinating,” Dubroff said, “even if it ends up with his clients yelling at my reporters, which is going to happen occasionally when you get a good story.”

Most journalists acknowledge that Sitrick has a good grasp on how newsrooms operate. He tries to stay in regular contact with financial news reporters and doesn’t hesitate to drop names of reporters and editors whom he considers to be friends. He has regularly hired newsroom veterans--including at least two from The Times--to work at his company.

Sitrick boasts of working long hours. The Pacific Palisades resident acknowledges that he’ll probably defy Nancy, his college sweetheart and wife of 26 years, and wear a beeper when one of the couple’s three daughters is married later this summer.

Sitrick’s self-described Type A personality and desire to control surfaced continually during the interview process for this story. Told that businessman Marvin Davis described his fees as expensive, for example, Sitrick responded: “That’s Marvin. You have to know Marvin.”

But the next day, he faxed a salary survey that he felt shows his fees to be in line with the competition.

When asked if it was wise for UCI to pay a $10,000 retainer for his advice, Sitrick maintained that the bill was justified, but declined to detail what advice he gave to officials at the university.

And, despite the public criticism of the bill he submitted to Orange County, Sitrick said he’d do it all again.

“If you play by the fire, then every once in a while you’re going to get burned,” Sitrick said. “And we play in the fire all of the time. I don’t consider Orange County to be a negative experience. Professionals understand these things--and, we got paid.

“I never had any question that we’d get paid.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Sitrick’s Stable

Some of Sitrick & Co.'s clients have included:

* Orange County: Handled media relations after unprecedented bankruptcy filing

* UC Irvine: Advised how to handle ongoing fertility clinic scandal

* America West Airlines: Handled media relations during bankruptcy

* Hawaiian Airlines: Provided guidance during bankruptcy

* MGM Grand Corp.: Handled investor relations for Las Vegas-based company

* Gillett Holdings: Provided assistance during bankruptcy

* Kelsey Grammer: Counseled television star after allegations of sex with a minor

* Kim Basinger: Advised actress on media reaction to bankruptcy filing

* Del Taco Inc.: Guidance during Orange-based company’s brief bankruptcy

Source: Sitrick & Co.


Advertisement