Plunging earnings and a stream of executive defections "have set tongues wagging" about the invincibility of Michael Sitrick's crisis PR firm, The Wrap's Brent Lang says in a story.
In the past, the so-called “Wizard of Spin” has applied his dark arts to everyone from Paris Hilton to Rush Limbaugh, using a cocktail of charm and combativeness to help his clients emerge from scandals relatively unscathed.
However, cracks appear to be showing in Sitrick's aura of invincibility, nearly two years after he sold his company together with partner Brincko Associates, a corporate restructuring firm, to the professional services firm Resources Global for $44.7 million in cash and stock.
TheWrap spoke to several former Sitrick employees who claim that business has slowed. Beyond that, public documents show that revenue at the still-profitable Sitrick Brincko Group, as it is now known, is indeed falling.
During its most recent quarter, pre-tax earnings at the Sitrick Brincko fell 79 percent to $193,000, down from $945,000 in the year-ago period, according to documents filed with the Securities Exchange Commission by parent company Resources Connection.
Notable departures, according to The Wrap, include executive VP Glenn Bunting and another San Francisco-based executive, David Satterfield — they left to start their own firm, GF Bunting — plus Tom Vogel of the New York office and Maya Pagoda of the firm’s bankruptcy team. Sitrick downplayed the departures and said the firm is not in any financial trouble
* Update: Statement to LA Observed from Sitrick.
"The Wrap is writing about the results of a single three month period out of the 22 months we have been part of Resources. The fact is, contrary to the assertions the unnamed sources cited in their article, our business remains strong. We added four new clients last week, added one today and expect to add two more before the end of this week. With respect to the departures, we have replaced the pr professionals who left in LA and NY and are in the process of working to find replacements for Bunting and Satterfield in San Francisco. It is easy to make statements that are untrue, if you don’t have to stand behind them by having them attributed to your name.”