The Fixer: Secrets for Saving Your Reputation in the Age of Viral Media

By Michael S. Sitrick

"The Wizard of Spin."—Los Angeles Times

"The spin doctor's spin doctor." —Financial Times

"The Winston Wolf of Public Relations....Wolf, if you recall, was the fixer in Pulp Fiction. Played by Harvey Keitel, he washed away assassins' splatter and gore. Sitrick, 65, cleans up the messes of companies, celebrities, and others, and he's a strategist who isn't averse to treating PR as combat. Over the years, clients of Sitrick & Co. have included the late HP chairman Patricia Dunn, Roy Disney, Rush Limbaugh, Michael Vick, Alex Rodriguez, the Archdiocese of Los Angeles, and the Church of Scientology."—Fortune Magazine

"Everyone understands the importance of shaping a story, but few are as shrewdly proficient at manipulating the media as L.A. crisis manager Mike Sitrick"—Fast Company

What do you do when the reputation you've built over decades is destroyed in a day?

In the court of public opinion, you're rarely innocent until proved guilty, and your enemies don't have to play by the rules.

Any misstep can blow up into a worldwide embarrassment on Facebook and Twitter, land on the front page of the New York Times, and bring down a CEO, a business, or a celebrity. You need a smart strategic response. You need Mike Sitrick.

In this book, Sitrick reveals the secrets that have made him America's preeminent crisis communications expert.

You'll see how the PR legend and his team guided clients like the estate of Michael Jackson and Papa John's Pizza through the media-fueled fires of scandal, while helping others, like Roy Disney and the filmmakers who exposed the Russian Olympic doping scandal, achieve justice. You'll learn Sitrick's Ten Rules of Engagement and his thoughts on "no comment," social media, public apologies, and more.

The question isn't whether you'll face a crisis one day, especially if you are at the top of your game. The question is what will you do when crisis comes? Don't let a lie get repeated until it's "fact," festering forever on Google. Don't let a damaging truth, stripped of nuance and context, damage your reputation forever. Follow the Fixer.

• Language: English
• Publisher: Regnery
• Release date: Jan 8, 2018
• ISBN: 9781621574354

Book preview

Chapter 1

Dolby v. BlackBerry

In my long career in strategic communications—especially that aspect involving crisis communications—my accessibility to clients has never been more important or more instantaneous than it is today, and it all began with the first wireless wonder, the BlackBerry. Remember when it ruled the wireless world? Corporate IT chiefs prized its proprietary network, bulletproof security, and cumbersome link to the Internet. Devotees called it the Crackberry, so addicted were they (I among them) to the feel of the gadget’s pebbly keyboard and navigational thumbwheel.

The BlackBerry was conceived by a company formed in 1984 by Mike Lazaridis—a man former GE CEO Jack Welch called a genius—and his childhood friend Douglas Fregin. Research in Motion, or RIM, was based not in the innovative hills of Silicon Valley but in the polite, cold climes of Waterloo in Ontario, Canada.

When RIM introduced the first BlackBerry in 1999, pagers still clung to businessmen’s belts and typing on your cell phone required tapping the 2 key three times just to form the letter c. The Black-Berry was downright magical, winning fans and investors. The company’s stock started trading on the Nasdaq the same year, with a total market value of a quarter-billion dollars. Ten years later RIM had more than twenty-five million customers and a seemingly unbreakable hold on the wireless-gadget market. Its market value had soared to $55 billion. Annual earnings would peak at over $3 billion.

RIM, however, had a patent problem. For five years starting in 2006, while selling millions of BlackBerrys, the company neglected to pay licensing fees for the portfolio of patents behind the microchip that produced the devices’ digitally-compressed high-fidelity sound. These patents belonged to one of the premier sound engineering companies in the world, Dolby Labs. In 2011, after years of unsuccessful efforts to get RIM to pay patent fees, Dolby decided it had to take action. Never in its forty-five-year history had the company brought a patent infringement suit, but RIM’s resistance was setting a bad precedent.

Dolby Labs was run for more than thirty years by a financial executive who worked for the founder, Ray Dolby. He kept its focus on the lab, eschewing the production of consumer electronics powered by its sound technology. Its noise-reduction technology provided crystal-clear sound to the music and movie industries.

Dolby had adapted to the digital wave, continuing to innovate as Moore’s Law took us into the handheld age. Its digital-compression techniques used only half the storage or bandwidth of previous technologies, and sometimes only one-tenth as much, with no loss of sound quality.

The company’s income came largely from licensing its proprietary technology to dozens of electronics makers, the music industry, movie theaters, and more, receiving a small cut of a product’s revenue as a fee. By 2011 the annual patent-fee revenue coming into Dolby Labs approached $800 million a year and accounted for more than 80 percent of its total business. Virtually every major electronics maker—from Apple and Android to Nokia, Microsoft, and Motorola—was a Dolby licensee.

Every major electronics maker, that is, but one—RIM, one of the biggest. From 2006 through 2010, RIM sold almost ninety million BlackBerrys (four million in 2006, more than six million in 2007, almost fourteen million in 2008, twenty-six million in 2009, and thirty-six million by 2010). Dolby’s licensing subsidiary, named Via, had been negotiating with RIM’s patent department since 2006 but with no progress.

Prizing its peaceful relations with its licensees, Dolby had always been reluctant to sue, but in 2009 its chief financial officer, Kevin Yeaman, rose to CEO. Two years later he brought in a new general counsel, Andy Sherman from CBS Interactive. That’s when Dolby began to take a harder look at its patent portfolio practices.

The overseas market was booming, a new wave of Asian brands was on the rise, led by HTC of Taiwan, and Dolby felt it had to put the rest of the world on notice that it would be a vigilant protector of its intellectual property. It needed a way to make RIM pay up without hurting Dolby’s image as a nice-guy partner.

Andy Sherman took the matter to the board, which reluctantly agreed they had to sue. They fretted over how the combative move might be viewed by other licensees, how the trade press would cover it, and whether mainstream media would notice at all. They needed to know more than just how to manage the message; they needed to determine what the message should be.

That is when a board member, Sandy Robertson, proposed hiring me. My partner Lew Phelps, who would work with me on the case, viewed it as a natural for me. It had a dramatic backdrop: the booming smartphone market defined by wireless wars among Apple, Samsung, Android devices, and the rest, not to mention BlackBerry. And BlackBerry had been very much in the news over its loss of market share. The last thing it could afford was a further loss of consumer confidence. The case of Dolby International v. Research in Motion, in fact, perfectly illustrates Rule Eight of my Ten Rules for Engagement: put your opponent on the Wheel of Pain. We were able to assess the situation, spot RIM’s pressure point, and achieve the result our client wanted faster than any of us ever expected.

Sandy Robertson remains a living legend: the eminence grise of Silicon Valley investment banking, who has used my services a dozen times or more in the previous twenty years. In A History of Silicon Valley, Arun Rao writes that the tech industry was historically served by four independent, San Francisco–based boutique investment banks from the 1960s to the late 1990s . . . Hambrecht & Quist, Alex Brown & Sons, Robertson Stephens, and Montgomery Securities. These four firms became known as the Four Horsemen.

Imagine being the guy who introduced Eugene Kleiner to Tom Perkins and helped them raise their first fund of a mere $8.4 million for what became the fabled Kleiner Perkins Caufield & Byers. Sandy’s firm, Robertson Stephens, helped bankroll the Internet boom, underwriting seventy-four firms and raising $5.5 billion in 1999–2000 alone.

Sandy told the Dolby board he had every confidence that I would know the right knobs to twist and levers to pull in the case of Dolby v. RIM and that I would look at not just how to get out the right story but also, perhaps, how to get what Dolby wanted most of all: for RIM to settle, paying Dolby what it owed.

Sandy Robertson and I had first met more than twenty years earlier in a touchy case. He was advising a U.S. chipmaker that was about to sell itself to a Japanese company, even though the CEO himself sat on an industry committee created to keep the U.S. semiconductor industry out of the hands of Japanese rivals. This was back in 1989 or so, when America’s getting bested by the Japanese, first in cars and now in memory chips, was a blow to national pride. If the story of this sale caught fire in the media, it could endanger the deal, so the legal counsel to the CEO had brought in my firm to manage public perception.

A Pre-Emptive Move

As soon as Sandy Robertson heard of my background, he later told me, he had heard enough. After graduating college and doing a little reporting for the old Washington Star, Baltimore News American, and a Baltimore radio station, I spent a year in two PR jobs and then, at age twenty-two, started working in the administration of the famed Chicago Mayor Richard J. Daley. Robertson, a Chicagoan himself, assumed that here was a PR man who knew how to knock heads and break a few kneecaps when necessary. In this case, however, all that was needed was preemptive action and a nifty bit of jujitsu.

I told my new clients that, to avoid a story pointing out the irony of this company selling out to the Japanese, we needed to preempt it by giving an exclusive to a mergers and acquisitions reporter rather than announcing it broadly via a press release that might alert, say, a Washington-based reporter who was more attuned to the political implications. I figured if we could break the story in the Wall Street Journal, other media would follow that lead and report what the Journal had written, overlooking the controversy.

Though I hadn’t named this type of maneuver at the time, it was based on two of Sitrick’s Ten Rules for Engagement—Rule Three, act preemptively, and Rule Four, use a Lead Steer. So I called a Wall Street Journal editor over the weekend to offer an embargoed exclusive for Monday. The Journal broke the news the next morning, focusing on the transaction and what it meant for the company and the industry. Nothing was said about a Japanese company’s buying a U.S. chipmaker whose CEO was chairman of a committee created to prevent that very type of transaction. The political issue was raised only in passing by one of the scores of media outlets covering the story, and even then, it was dismissed by the CEO. No other media raised the issue, controversy was averted, and the merger sailed through.

In the years since that deal, Robertson had matched me up with a series of investment banking clients, letting us go off into the sunset together, as he would put it. His A-list of clients never ceased to impress me, and his eye for creative solutions was an asset. I’ve always believed that no matter how good you think you are at giving advice, you must listen closely to your clients, because the insights coming back in your direction can be even more valuable than your own. In Sandy Robertson’s case, this offered a particularly bountiful bonus to me by letting me become his close friend and expand my base of knowledge.

Robertson’s high demands and lofty expectations made me and my team better. He wanted more than a PR spinner—he demanded inventive, strategic thinking and an ability to pitch solutions and ideas that had eluded other PR or legal experts. Robertson liked to say that while other PR firms promoted your positives on a day-to-day basis and we of course did that too, where we really shined was when things were really tough. Our good work paid dividends in numerous ways. First and foremost, it benefited our clients. It also resulted in referrals. Sandy would generously tell people in recommending my firm, There is nobody better—yet another benefit of doing good work and achieving results for one’s clients.

Robertson put me on a conference call with Dolby’s Andy Sherman, who told me the company was preparing to file a patent-infringement lawsuit against RIM. When he told me the amount of damages they were seeking—and, quite frankly, I determined there was no other news that would enable major media coverage—I saw that they needed to rethink their strategy. I told Andy that, with all due respect, the amount he was seeking, at least from a news standpoint, reminded me of the scene in Austin Powers, International Man of Mystery when Dr. Evil, awakened after thirty years in suspended animation and still thinking in terms of 1960s prices, announces a plan to steal a nuclear warhead and hold the world ransom for ONE MILLION DOLLARS! Snickers all around. I suggested that the damages sought weren’t large enough to garner much media coverage, certainly not in the major media. Dolby needed to get the attention of the C-suite—and make the CEO want to make this suit go away.

Then it struck me: what if Dolby were to bring a suit before the International Trade Commission or in federal court, seeking an injunction to ban shipments of BlackBerrys into the United States and Germany, where the suit was to be filed? That would get their attention. They could never withstand the market uncertainty, I told Sherman and his lawyers on the call. You probably won’t even have to argue for it in court—because I seriously question whether RIM can withstand the pressure. Then I recommended that we not specify the amount we were seeking in damages. We’d just say, damages to be determined at trial.

This is where we pulled out Rule Eight: put your opponent on the Wheel of Pain. We knew that RIM couldn’t afford bad publicity just now. The last thing it needed was a threat that its products might not be allowed to enter the United States and Germany.

Think about it, I told my new clients: threatening a ban on U.S. imports of BlackBerrys would prompt a flood of reporters’ calls to the company asking whether its business might come to a halt. Investors would fret that RIM’s revenue and cash flow could suffer. Suddenly RIM’s CEO would become aware of an existential threat, all because of a patent licensing dispute.

The jujitsu part of the plan was using BlackBerry’s hefty size and fame against it. The gadget still had millions of diehard fans, Crackberry addicts who might worry that their supply would be cut off if U.S. and German imports were halted. And the news would come at a clutch moment for RIM, just as it was about to report earnings.

The strategy came together quickly after my suggestion. Dolby’s law firm drafted the complaint against RIM and prepared to file it in two courts simultaneously. The first, in the federal district court in San Francisco, near Silicon Valley, would spark nationwide major media and tech coverage. The second, in Mannheim, Germany, would unleash wider coverage overseas, letting Dolby send a toughguy message to manufacturers in the rest of the world.

Meanwhile, I had Lew Phelps prepare to brief members of the media after the initial two stories were posted to get maximum follow-up coverage. Lew had waged PR patent battles with me before. Today he is white-haired and raspy-voiced, an actor you might cast in a remake of Hemingway’s Old Man and the Sea. After a decade as a reporter for the Wall Street Journal in the 1970s, he had served as a public relations head at three Fortune 500 companies in energy and railroads and of his own firm before joining Sitrick And Company in 1997.

In training my people to think strategically about a case and look beyond a media pitch to figure out the real problem they are trying to solve, I have them ask four key questions:

•What is the client’s objective?

•How can we use our skills to contribute to achieving that objective?

•What is the best strategy to bring to this situation?

•So what? Why should anyone care?

In Dolby’s case, the objective wasn’t to get media coverage of its patent fight with RIM, it was to get RIM to pay Dolby its licensing fee. I thought the threat of a ban on BlackBerry imports stood a good chance of achieving that objective. We had elevated a request for an injunction into high drama. Sure, we would put out the de rigueur press release on the wires—after the initial stories broke—and it needed to deliver the right message. New lawsuit, injunction to block BlackBerry imports, RIM avoiding the patent payments, tough yet conciliatory tone, and a quotation from a reluctant yet resolute Andy Sherman as Dolby’s top lawyer: "Litigation was regrettably our last resort after RIM declined to pay for the use of Dolby’s technology. We have a duty to protect our intellectual