Canada-based MDC Partners, run by financier Miles Nadal (left), has challenged the big boys of the advertising arena by snapping up a number of well-regarded agencies, most notably Crispin Porter+Bogusky, Anomaly, 72and Sunny and Kirshembaum Bond.
MDC has never made a profit, preferring instead to surf over a tidal wave of borrowed money in the hope/expectation that it would all come right and it would join the likes of WPP and Omnicom in the ever-entertaining marcoms premier league.
Its last big buy was US media independent TargetCast in March which some saw as Nadal rounding off the creative offer with media, others (cynics no doubt) as a way of getting some much-needed cash flow into the company. This was round about the time that Nadal was paying himself about $20m and his CFO about that half of that.
Since then, things aren’t looking quite so 72andSunny. Kirshembaum’s big signing Lori Senecal from McCann has had her wings clipped as the agency has abruptly shipped out some of the high profile, high salary people she brought in. And now CP+B in Toronto has suddenly disappeared to be replaced by a hotch-potch called Union.
Now big marcoms companies do this all the time, switching resources from one sure-fire winner to the next, and often not winning at all. But when MDC does it you can’t help wondering if the screws are tightening.
MDC’s attraction to the good agencies in which it’s bought a stake is that they can still be quasi-indepependent with the supposed benefits of access to a network (and some cash in their back pockets).
But you don’t see MDC lining up alongside WPP, Omnicom and Publicis Groupe very often when a big global account comes on the market. Its big one at the moment is the massive $1bn plus Windows 8 launch, handled by CP+B. Microsoft is its only real supranational account and, even here, JWT offices in Brazil and China are helping out.
Are we worrying for no good reason? Let’s hope so.
Never forget that even though Miles heads up a SDHC (Small Dumb Holding Company) He pays himself a ton more money than the heads of the BDHC’s (Big Dumb Holding Companies) This is accomplished by stacking the board and management of MDC with well paid cronies prepared to touch forelocks whilst rubber stamping his insatiable needs for dumpster loads of cash. This is why the poor unfortunates forced to work at MDC refer to it as “Miles Demands Cash!”
Cheers/George “AdScam” Parker
Nadal is the Conrad Black of ad men, living like a sultan while his investors eat dirt. The company has negative shareholder equity with hundreds of millions in debt on the balance sheet. Meanwhile at least one of his recent purchases is an agency drowning in debt.
At least Lord Black has a talent for writing.