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Arison, the miniseries

Why did she leave? Did Israel's prime PR man make primo mistakes?
Thin-skinned

With Shlomi Sheffer

Rani Rahav has major clout in Israel's media world. He runs the biggest PR company in the country. His star-studded client list includes Strauss-Elite (TASE: ELEI), the Ofer brothers, Ganden Holdings, the Arison group, Africa Israel (TASE: AFIL1) , El Al (TASE: ELAL ), United Mizrahi Bank (TASE: MZRH) and Castro (TASE: CAST).

Yet the veteran PR man's handling of superstar client Shari Arison led industry insiders to wonder if he hasn't lost his touch. He behaved like a novice, stumbling into every mistake in the book, not like a pro who regularly hosts Israel's wealthiest people.

Yesterday Rahav circulated a letter he'd written to the journalist Shelly Yechimovitch, in which he claimed her "wickedness" had spurred Arison to leave Israel, which she and her family did last week, moving to Miami via New York. His letter, the second he'd written in a similar vein to Yechimovitch, caused many an eyebrow to shoot up in the PR industry.

They refuse to be quoted personally, but claim the PR strategy for Arison, as managed from December 2002, was one of the most ill-thought ever to hit the Israeli airwaves. Its main effect was to fan the fires of criticism leveled against Arison in the press and in the Israeli public.

The first mistake: Playing into Perez's hands

Rahav's first mistake, say top industry sources, was that press conference regarding the job cuts at Bank Hapoalim (TASE: POLI ), in which Arison holds a controlling interest.

When the bank announced it was firing 10%, or 900, of its employees in late 2002, union leader Amir Perez pointed an accusing finger at the bank's shareholders, accusing them of avarice. Perez, a PR mastermind, kept harping on the fact that the bank netted a billion shekels in 2001. In response, Arison chose, in coordination with Rahav but not with the bank's management, to call a press conference.

Job cuts are never pleasant say PR mavens. All the public relations executives can do is hunker down, take the blows with restraint, and wait for the storm to pass, then resume business as usual. The press conference Arison initiated was the exact opposite. Arison faced the press head-on after years of staying quietly in the wings, to explain why the biggest bank in Israel had to fire workers.

As a result, instead of quietly going away, the story made even more headlines, explain the industry sources. "You can't pit a billionaire against simple people who are losing their place of work," says one PR manager. "The press conference played right into Perez's hands. He managed to make the whole story personal: Arison against the poor bank workers."

The second mistake: Take the billboards down!

Before that, not many people in Israel knew of Arison's connection with Bank Hapoalim. After that press conference, everybody knew how many shares the richest woman in Israel held in the nation's biggest bank. Arison became Bank Hapoalim, and indeed, Perez lost no time in pasting posters and billboards all over the country that blared the message: "Arison is laughing, 900 Hapoalim workers are crying".

Arison reacted to the billboards dotting the nation by demanding they be taken down. She also threatened to sue. That was the second mistake, the experts say.

"Instead of letting the campaign die down and disappear, Arison turned the media spotlight onto it and increased the number of articles on the subject," they explain. In the press, she came across as a steamroller trying to use her money to threaten her opponents.

Some of the criticism came from Shelly Yechimovitch, who expressed her opinion of the developments on Channel 2 news. "Mustn't get Shari Arison upset," she quipped. In response, Rahav sent her his first letter, which he also forwarded to 500 of Israel's richest people, and 500 journalists too.

"This is a nation of good people, and there is no place for people like you. Wicked, wicked, wicked," he wrote.

That letter put Rahav himself at the center of a media furor, turning him from the man pulling strings in the wings to part of the story itself.

Thank you, Shari Arison

Rahav is famous for his identification with his clients, say industry sources, and in this case, the distinction between a PR manager and a customer disappeared entirely. Rahav's letter again made headlines, and again, instead of letting the story fade away, Arison was back in the headlines.

Labor leader Amir Perez certainly had no interest in letting the story ebb, since there was a general election a month later, and he leads the One Nation party. Political pundits say Perez owes the third seat his party got in parliament to Arison.

The feud between Perez and Arison ended in February 2003, with a handshake documented by the cameras. Perez received a gift from Arison ¿ a decision to reduce the job cuts from 900 to 793. That became his achievement, instead of being perceived as a purely professional decision by Bank Hapoalim itself.

Substance of a PR campaign

Three months later, with the Bank Hapoalim story still echoing in the background, Arison launched her "Substance of Life" campaign.

Over the years, Arison had donated more than $23 million through a family foundation, but always quietly. Yet at a press conference, she chose to announce that she was earmarking a million dollars for the ad campaign, saying "Peace begins within us".

Industry sources explain that launching a campaign called "Substance of Life" so soon after the Hapoalim scandal made Arison look like she was trying too hard.

"Israelis like to receive donations, but they prefer not to know from whom," they explain. "Donations should be made in secret. PR people should always remember the adage, don't blow your own horn."

The campaign was accompanied by a big story in the women's journal La-Isha, and an interview with Ilana Dayan on the popular TV show "Uvda" (Fact). Both events showcased Arison, the woman behind the billions. The exposure, say the experts, turned the businesswoman into a celebrity. Instead of having her picture taken at a hospital wing built with her donations, she was shown sailing on a yacht. Instead of portraying her as an intelligent, sensitive person, she was depicted as a billionaire detached from the day to day travails of life in Israel.

Arison's choice to be photographed in an embrace with her new husband, Ofer Glazer, made her an item for the gossip pages, instead of a personality entitled to esteem by virtue of her business or social dealings. And their wedding won coverage as a gossipy celebrity item, say the sources; hence Arison's constant presence in the press.

Bull in a china shop

Rahav's expertise is campaigns to launch new products. He used the same strategy to handle Arison, they say: the more media exposure, the better. But it did not suit here; it was like loosing a bull in a china shop. Every market value Rahav made shattered another facet of Arison's clean, distant image, turning her life into a miniseries on prime time TV.

The intensive PR campaign blew up in its progenitors' faces when Arison's brand-new husband, Glazer, was accused of sexual misconduct. The accusations and his denials made the front pages. The PR buildup beforehand had had an effect; Arison's personal life had become an issue of the public domain, and the scandal was covered to an extraordinary degree.

Yesterday morning, Rahav sent his second letter to Shelly Yechimovitch, saying that it was her fault the richest woman in Israel was leaving the country.

Rahav is trying to put a spin on the whole thing, shrugged another PR industry executive, and it's working, too. The press has stopped dwelling on the accusations against Ofer Glazer, and is focusing on Arison's pain, and on finding somebody to blame for her departure.

More to come: Rani Rahav rebuts



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