A Restructured McLeod USA Contacts Agencies

McLeod USA, a tele com munications company that emerged from Chapter 11 bank ruptcy earlier this year, is talking to agencies about what could be a nearly $40 million account, sources said.

The Cedar Ra pids, Iowa, company, which provides local and long-distance phone ser vice in 23 Midwestern and Western states, has restructured since coming out of bankruptcy in April, shedding businesses, such as publishing and cable operations, in some of its markets.

While recent ad spending has been minimal, an analyst said McLeod needs to resurrect its brand and get its name back in front of consumers.

“They need to identify their key points of credibility,” said Randy Ringer, who heads up the telecommunications group at FutureBrand in New York. “The good news is, [their bad news has] been out of view for a while. The bad news is, people think they are not around.”

A representative for McLeod confirmed the company was talking to agencies but was unable to provide further information.

While sources said McLeod had pegged its ad spending in the $30-40 million range, the company has no record of major media outlays. It has spent less than $1 million annually since 1999, per CMR, with no recorded spending prior to that.

McLeod’s last known agency was Peterson Milla Hooks in Minneapolis. The shop’s only work, a print and outdoor effort, appeared in 1999. The effort used cartoonlike illustrations from artist Calef Brown to distinguish the company from larger rivals.

Founded in 1991, McLeod originally provided maintenance for the Iowa Communications Network, a fiber-optic network linking municipal government and educational facilities. The company began offering local and long distance in 1993.

After going public in 1996, McLeod expanded its operations to cover 25 states. In 1997, the firm sold a 12 percent stake to investment firm Forstman Little & Co. for $1 billion.

With the agreement of bondholders, McLeod filed for Chapter 11 protection in January 2002 to reduce its debt by $3.3 billion.