Markets

News America Irked by Portrayal at Valassis Trial

By Jim Edwards

Updated on: June 29, 2009 / 10:16 PM EDT / MoneyWatch

The Valassis v. News America Marketing trial is on a break this week, with testimony resuming July 6. News America is using the breather from Michigan state court to do some repair work on its image, which has taken a hammering.

In a message to BNET, News America vp/corporate communications Laura Richards asked for a more "balanced" view to be presented of CEO Paul Carlucci in our coverage.

She points out that although Valassis has repeatedly alleged that Carlucci played the baseball bat beating scene from The Untouchables as a motivational tool at a sales meeting, Carlucci denies doing that. Also, he denies saying "I will destroy you!" to the owners of Floorgraphics, another in-store supermarket ad agency that NAM acquired as part of a settlement when it was sued by Floorgraphics.

Here's the rest of Richards' statement, verbatim; BNET's take follows:

While reporting on the video testimony submitted as evidence, you wrote that Mr. Carlucci "admitted showing a scene from The Untouchables as a motivational tool at a sales meeting" and added that the scene "is believed to be the one in which Al Capone beats someone to death with a baseball bat."

News America Marketing would like to correct this misconception, particularly since it has been repeated on more than one occasion in the media. In the following excerpt, which was part of the video testimony played during the trial by attorneys for Valassis, Mr. Carlucci specifically denies showing the violent baseball bat scene from the movie and explained that the clip shown was actually one of several:

Question: It is accurate that you showed a clip from the film the Untouchables to a sales meeting? Answer: That aspect is accurate. Question: And it is the portion of the film in which Robert Deniro playing Al Capone gives a speech about baseball and then kills a man with a baseball bat? Answer: I did not show that portion of the video clip. Question: Which portion did you show? Answer: I showed the speech that was based on -- and it was done, along with several other movie clips that were discussing attributes that we were presenting to the sales staff. I believe the Capone's speech had a title -- and it was-- it probably was in 1992 or 1993 or 1991 that had a title of loyalty. And it was shown just in jest as something of loyalty. We also showed films from Mary Poppins and we showed Daddy Long Legs with Fred Astaire dancing on the ceiling at the same -- at the same sales function, if my memory serves me correctly.

Also, you reported that he issued a warning to executives of Floorgraphics that was, 'I will destroy you' and added that Mr. Carlucci claimed not to remember this. However, as part of the same portion of testimony, Mr. Carlucci clearly denied this:

Question: And you then told them that, if they came into the shelf part of the business, you would destroy them, isn't that right? Answer: No, I did not say that.

Thank you for your attention to these issues.

Laura Richards | Vice President, Corporate Communications | News America Marketing

BNET's take: The statement is interesting for two reasons. First, if News America wins this thing, Carlucci's denials make him -- as a matter of law -- a much more boring chief executive.

Second, and more significantly, this is the first major statement from News America on the litigation since BNET's coverage of it began last year. Both of Richards' points relate to Carlucci's actions (as opposed to the more substantive allegations about News America's treatment of clients). Perhaps a nerve has been touched?

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