MCI Puts Contenders on Hold

Following a November earnings warning and stock tumble in which WorldCom’s share price fell 20 percent, the telco has told the four shops vying for its $75 million long-distance consumer account to sit tight until it re-evaluates aspects of the business, sources said.

A decision had been expected in December, but the contenders were notified just before the holidays that a selection would be postponed.

Meanwhile, Leo Burnett in Chi-cago has emerged as the previously undisclosed shop in the review. Ten-year incumbent Messner Vetere Berger McNamee Schmetterer/Euro RSCG, TBWA\Chiat\Day and Deutsch, all New York, are the other finalists.

Gretchen Gehrett, the Alexandria, Va.-based client’s vp of ad-vertising and communications, is running the review.

Sources said the client initially asked the contenders to help with a promotional aspect of their campaign. But during meetings with the agencies, MCI asked for a “broad repositioning.”

That, combined with the fact that executives from other aspects of MCI’s business, such as digital, Internet telephony and 1-800-COLLECT, attended the pitch led some contenders to believe that the business was for more than just long distance.

On Nov. 1, MCI WorldCom said that its fourth-quarter earnings would fall short due to “continuing competitive pressure” from wireless technologies and “increased spending on growth initiatives.” It planned to issue a tracking stock, trading under the “MCIT” symbol, solely for its long-distance business. That stock has not yet been issued.

Two days ago, analysts lowered WorldCom’s earnings-per-share estimates.

WorldCom officials declined comment. Executives at the competing agencies also declined comment.

The account went into review in September with at least 20 shops receiving questionnaires. The company spent $760 million in measured media in the U.S. in 1999, according to Competitive Media Reporting.