WASHINGTON -- Leo Burnett has ousted Images USA, the Atlanta-based shop that handles the African American portion of the U.S. Army's $95 million account, sources said.
Chicago-based Burnett and Images disagreed about the fees Burnett pays subcontractors on the account, among other issues, sources said.
Images operated without a signed contract since Burnett won the Army business in July 2000 [Adweek, April 8]. As the primary contractor, Burnett has the power to fire subcontractors.
Ray DeThorne, shop evp on the Army account, would only say, "The two agencies have decided to go their separate ways, and it is an amicable parting."
Bob McNeil, president and CEO of Images, said, "We both agreed to move on." He declined to elaborate further.
Army representative Paul Boyce said the government was aware of the situation, but would not comment on "the contractual arrangements between prime contractors and subcontractors." Army spends $5-6 million for African American ads.
Concern over the fees Burnett paid Images and The Cartel Group in San Antonio, which handles the Hispanic portion, has prompted the Rev. Al Sharpton's Madison Avenue Initiative to consider filing a lawsuit. Sharpton said the firing of Images has encouraged his group to move "swiftly and decisively" in filing the suit.
"It is clear to us there is a pattern of arrogance going on on Madison Avenue," Sharpton added. DeThorne said Burnett is seeking a new African American shop.