The sensational failure of energy services speculator Enron Corporation – currently seeking Chapter 11 bankruptcy protection while harried by lawsuits and federal investigation – is expected to result in the closure of its Enron Media Services unit, a speculative media-oriented reflection of its discredited parent.
Created last year EMS was hyped to advertisers and media agencies as a marketer of ‘price-risk-management’ schemes. These centered around a number of claimed long term agreements with advertisers, networks and media buyers, via which EMS purported to guarantee fixed media pricing for up to five years, then profit by reselling the media at the current market value.
Earlier this year EMS bragged that it would write $1 billion in media purchases by the end of 2001. On Friday, however, it suspended all transactions and – says Enron – will be closed down. A sale is highly unlikely: “Since [EMS] was built on intellectual capital, represented by people who are no longer with the company, there is really nothing left to sell,” said an Enron spokesperson.
News source: AdWeek.com