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Chris Jones

R&R Partners Snaps Up Local Rival

9 September 2004

LAS VEGAS -- Mirroring other local industries' attempts at growth through consolidation, Las Vegas-based marketing powerhouse R&R Partners will merge with a pair of influential Nevada players to compete more effectively on a regional and national level.

The 30-year-old advertising, public and government relations firm will combine with local competitor Brown & Partners, a 30-employee company founded nearly four years ago, R&R Partners Chief Executive Officer Billy Vassiliadis said Wednesday. R&R will also take in Reno-based Pete Ernaut, one of the state's most-influential political consultants.

The privately held companies did not disclose the deals' values, though they would generate approximately $226 million in combined billings once the transactions close Jan. 1. Brown & Partners President Mark Brown and Ernaut will purchase ownership stakes in R&R and oversee its two largest divisions, Vassiliadis said.

Clients include the Las Vegas Convention and Visitors Authority; the Regional Transportation Commission; the University of Nevada, Las Vegas; Caesars Entertainment; Mandalay Resort Group; and MGM Mirage Advertising and Events, among others.

Since he took over R&R in 1994, Vassiliadis and partners Bob Henrie, James King and Mary Ann Mele have nearly doubled R&R's size through successful campaigns like the convention authority's, "What happens here, stays here" program.

However, R&R's management team failed to grow at a comparable pace and required new talent to expand its influence in Nevada and other states, company executives said.

"Pete and Mark have run their own companies and both have a set of their own relationships outside of R&R, which brings to us critical mass at a senior level that we haven't had," said Mele, R&R's president and chief strategic officer.

The Brown & Partners deal emerged from an informal conversation that occurred two months ago, Vassiliadis said.

"Mark and I have been friends for a long time and we were talking about our various issues and concerns," Vassiliadis said. "It struck us both that the timing could be pretty darn good for both of us to get together."

Once he'd ended his conversation with Brown, Vassiliadis called Ernaut to ask his opinion of the proposed union.

"As we were talking about the deal with Mark, we both said, `Well what about us?' " Vassiliadis said.

Brown said Wednesday his company has reached its effective limits. By merging with R&R, it can maintain its staff and clients without expensive upgrades such as a research department, digital video service and in-house production capabilities now housed at R&R.

"They needed talent and we needed infrastructure," Brown said of R&R. "It's a marriage of the two."

Vassiliadis admits his union with Ernaut will likely raise eyebrows in Nevada's political circles.

A self-described "dyed-in-the-wool Democrat" who has worked with party heavyweights such as former Gov. Bob Miller and longtime Sen. Richard Bryan, Vassiliadis will soon share an office with a man who helped elect key Nevada Republicans including Sen. John Ensign, Gov. Kenny Guinn and Attorney General Brian Sandoval.

"The interesting thing for us is how hard he and I are going to clash," joked Vassiliadis, who quickly downplayed the likelihood of interoffice squabbles.

"You aren't going to see Pete and I on either side of an aisle running campaigns. If he has a particular long-term relationship with somebody I'm certainly not going to be involved in the other side.

"By the same token, Pete is very mindful of my respect and ongoing support of, say, (Rep.) Shelley Berkley or (Sen.) Harry Reid, and he's not going to do anything to step on that relationship."

Despite its reputation in Carson City, Vassiliadis said R&R has not worked on an individual's election campaign in several years but has instead focused on key issues. That trend should continue under Ernaut, who will start work at R&R's Reno office on Oct. 1.

Ernaut, 40, said it was difficult to leave his job as managing director of governmental affairs and public policy with the law firm Jones Vargas. But R&R's infrastructure will make it easier to expand his -- and his new company's -- influence outside the state, he said.

Ernaut will fill a void created by the departure of Greg Ferraro, an 11-year employee who said Tuesday he will step down as R&R's president of government and public affairs to form his own agency, The Ferraro Group, sometime in November.

Brown will soon move into R&R's corporate headquarters at 900 S. Pavilion Center near Charleston Boulevard, but Brown & Partners will remain a stand-alone company based at 7900 W. Sahara Ave. Former Managing Partner Chuck Johnston will take over as president of R&R's Brown & Partners division.

No layoffs are expected at R&R, which has about 210 employees in Las Vegas, Phoenix, Salt Lake City, Reno and Washington, D.C. Ernaut's two employees will also transfer to R&R's Reno office.

Vassiliadis said other acquisitions could soon be in store, though he now has "ideas but nothing in the fire."