Prometheus 6

Staples, Bigelow Tea Pull Advertising From Imus Show (Update1)
By Heather Burke and Mary Jane Credeur

April 10 (Bloomberg) -- Staples Inc. and Bigelow Tea stopped advertising on radio host Don Imus's morning show to protest his racially charged remarks about the Rutgers University women's basketball team.

Staples, the world's largest office-products retailer, ran its last ad on Imus's MSNBC simulcast yesterday, spokesman Paul Capelli said. Bigelow Tea, the closely held maker of specialty teas, suspended its ads and future sponsorship is "in jeopardy," said Cindi Bigelow, co-president of the company.

"Our company does not condone or support in any way the unacceptable comments made by Imus," Bigelow said in an e-mailed statement. "We are deeply saddened by Imus' remarks."

The decision by advertisers to withdraw advertising may step up pressure on CBS Radio and MSNBC, which air the show. CBS and MSNBC yesterday suspended Imus for two weeks after he called the team "nappy-headed hos." He has since apologized and today said he will serve the suspension "with dignity." Team members today said they plan to meet with Imus to hear him apologize in person.

Civil-rights leaders including Rev. Al Sharpton called for his dismissal. On NBC's Today show this morning, Sharpton indicated that pressure may be placed on advertisers.

"Ad buyers always try to stay away from controversy or ask for significant discounts," David Joyce, an analyst with Miller Tabak & Co. in New York, said in an interview. He has a "buy" rating on CBS shares and doesn't own them.

`Deplorable, Despicable'

Fairfield, Connecticut-based Bigelow has advertised on the show for nine years. Spokeswoman Deborah Greaves wouldn't say how much the company spends on the show.

"Recent comments that were made on the program about the Rutgers basketball team prompted us to revisit our decision to advertise and we decided to stop advertising on the program," said Staples' Capelli. He declined to say how much Framingham, Massachusetts-based Staples spent on advertising.

Members of the Rutgers team today said they hadn't decided whether the accept Imus's apology.

"We do hope to get something accomplished during this meeting," Essence Carson, the team's leader, said at a press conference at the university's campus in Piscataway, New Jersey. "The remarks that were made were definitely unacceptable."

The team's coach, Vivian Stringer, earlier described the comments by Imus as "deplorable, despicable and abominable and unconscionable."

Falling Ad Sales

CBS Radio has struggled for more than a year with falling advertising sales, since Howard Stern defected to host a show on Sirius Satellite Radio Inc.'s subscription-radio service. Last month CBS replaced CBS Radio chief executive officer, Joel Hollander with Dan Mason.

Imus probably drives about $12.7 million of revenue to New York radio station WFAN, or 25 percent of its sales, said Mark Fratrik, vice president of BIA Financial Network, a consultant to the broadcasting industry based in Chantilly, Virginia.

"It would be very disruptive if WFAN didn't have Imus in the morning," he said.

Even a two-week suspension will hurt CBS, Fratrik said.

"It's certainly going to impact CBS for those two weeks," he said. "They have contracts for Imus in the morning and you can bet they'll go to CBS and say, he's not there and we're not paying those prices."

Karen Mateo, a spokeswoman for CBS Radio, didn't immediately return calls for comment.

Shares of CBS rose 20 cents to $31.40 in New York Stock Exchange composite trading. Shares of Fairfield, Connecticut- based General Electric, owner of MSNBC, rose 10 cents to $34.88.