Columnist Jeff German: Dollar deal will test mettle of board

Friday, July 1, 2005 | 7:52 a.m.

Jeff German's column appears Tuesdays, Wednesdays, Fridays and Sundays in the Sun. Reach him at german@lasvegassun.com or (702) 259-4067.

WEEKEND EDITION

July 2-3, 2005

There is a lot riding on the upcoming public hearing into how the Las Vegas Convention and Visitors Authority secretly gave away the lucrative rights to its most popular marketing slogan.

Not only is the credibility at stake of the LVCVA's board, which so far has contended it knew nothing about the sale, but so is the way this well-funded public agency conducts the public's business.

My guess is that, when all is said and done, the 13-member LVCVA board will realize that it needs to make serious changes to rein in the agency's executives and ensure that the public's interests are protected in the future.

Las Vegas Mayor Oscar Goodman, who chairs the board, has promised a thorough airing July 12 of the $1 sale of the valuable phrase, "What happens here, stays here." The slogan was turned over to LVCVA's influential advertising agency, R&R Partners, the company that created the phrase as part of a $66.5 million marketing campaign.

LVCVA President Rossi Ralenkotter and R&R CEO Billy Vassiliadis maintain they struck the agreement Nov. 9 to bolster the advertising firm's standing to pursue legal action against those who have tried to infringe on the slogan.

The LVCVA, which is funded through a room tax, apparently has allowed R&R to protect its other marketing slogans in this manner in the past. The two agencies have had a 25-year working relationship.

The difference this time is that "What happens here, stays here," has become a very valuable commodity, and nobody at the LVCVA bothered to take any measures to legally ensure that the phrase's value remained with the LVCVA. The experts tell us that the eight-page agreement Ralenkotter and Vassiliadis signed Nov. 9 basically gives away the farm to R&R.

How hard would it have been to write some protection into the agreement for the LVCVA? Why did the LVCVA even need to let R&R do its legal work? Why didn't it just hold onto its rights and hire its owns trademark lawyers to protect the slogan?

At best, this was a case of poor judgment on Ralenkotter's part. Did he simply decide to trust that R&R would do the right thing with this gold mine and return any profits to the LVCVA?

At worst, it was a clever scheme to allow R&R to reap even more profit -- under the radar -- in addition to the millions of dollars it already receives from the LVCVA

Another subject that should be explored at the July 12 board meeting is why the LVCVA has never even bothered to capitalize financially on the international popularity of the slogan, which has been in play for 2 1/2 years.

Entrepreneurs outside the agency have recognized the merchandising value of "What happens here, stays here," but LVCVA executives have been asleep at the switch. They should have licensed companies to sell souvenirs for them long ago. Think of the extra dollars that would have brought into the LVCVA.

The task of uncovering the truth at the upcoming board meeting will test the political mettle of the board members.

Ralenkotter, who has been at the LVCVA for more than 30 years, is practically an institution there. He knows the business of promoting Las Vegas better than anyone, and you can bet that he has done plenty of favors for current and past board members during his epic tenure.

And you won't find many people more powerful in Nevada than Vassiliadis, who is a strategist for many of the state's top politicians. His company also holds some of the biggest advertising and lobbying contracts in the state.

So are the board members up to the task of asking the tough questions that need to be asked on July 12?

Let's hope so, because the public deserves to know whether it is customary for what happens at the LVCVA to end up at R&R Partners.