American Television Time, a DRTV media buying agency in Austin, TX, is struggling with financial difficulties in an attempt to avoid bankruptcy.
Sources, who spoke on the condition of anonymity, said the agency laid off a significant portion of its staff last year and has attempted to improve cash flow.
“At the beginning of 1998 there was about 80 employees and now they are down to around 30,” said an outgoing employee of the agency. “In addition to people being laid off, two staff members resigned. They wanted to get out while the getting was bad.”
Sources cite poor management as the root of the problem, even though clients were not paying their bills for a period of time.
“The clients they do have are currently paying their bills,” the same source said. “It has 100 percent to do with poor management.”
A company executive said American’s troubles are partly the result of the bankruptcy of Kent & Spiegel Direct Inc., Culver City, CA, a major client that owes the agency $480,000, according to court documents.
“We have had some hard times in the last months but television stations have been very understanding,” said Greg Sarnow, president of American. “We are certainly not going to have these problems this year. We are making our clients pay in advance and we are paying the stations in advance. The Kent & Spiegel fiasco was certainly a significant part of our troubles in 1998.”
He denied rumors that the company faced bankruptcy.
Insiders also said there is no connection between the sale of Williams Worldwide Inc., a DRTV media agency in Santa Monica, CA, whose CEO, Katie Williams, is an owner of American. One insider characterized the relationship as “friendly competition.”
