Can Aegis boss Jerry Buhlmann survive £25m bad debt in Spain?

When Jerry Buhlmann took over from Robert Lerwill as CEO of Aegis in 2008 there were a few raised eyebrows. Buhlmann originally built his reputation as a media boffin and there had already been surprise when he beat Aegis-owned Carat’s Mark Craze (now at Havas-owned MPG) to the top Carat job in Europe.

Lerwill was a financial veteran, serving as group finance director of WPP from 1986 to 1996 and then moving to Cable & Wireless (to which he has since returned).

Now Buhlmann, who received a 40 per cent pay rise to £750,000 last year, is in the mire as Aegis has admitted it faces a £25m bad debt in Spain which will wipe nearly a quarter off the profits it’s due to announce in the middle of March.

Buhlmann didn’t get the top job at Aegis because he was a financial genius but because he was a seasoned media pro with a vision of how the industry was likely to develop.

On the vision thing last year he bet £200m on Australia’s Mitchell Communications as a good base for Aegis in the rapidly-growing Asia Pacific region. He may still be right.

But a seasoned media pro, especially one reared at Carat of all places, shouldn’t have countenanced one client, Spain’s Nueva Rumasa industrial group owned by the Ruiz-Mateos family, running up £25m of unpaid media bills over two years.

If you don’t pay your bills for two years it’s probably because you’ve run out of money and Nueva Rumasa, which is going into Spain’s version of Chapter 11 bankruptcy, duly has.

Buhlmann’s predecessor Lerwill was abruptly terminated by the Aegis board for reasons which still aren’t wholly clear. Buhlmann will need all the visionary wisdom he can muster to survive this one.

And it’s not just the board he has to worry about. Adland’s perennial lurking predators, headed by Aegis shareholder Vincent Bollore and his Havas group, will be taking a close interest too.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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