Sorrell hasn’t gone yet but WPP will never be the same

As things stand Sir Martin Sorrell is still CEO of WPP and, according to some in the company, will present the company’s recent disappointing results at the end of April.

The current investigation into alleged “personal misconduct” by an outside law firm – there seem to be as many runners and riders for this role as there are contenders to replace him – should be be completed by then. Let’s hope so or it will be a gruesome occasion.

But, whatever emerges from the investigation, it’s certain that 73 year-old Sorrell’s reign at the top of the company he founded will be limited and a succession plan – of sorts – put in place.

But what sort of company do investors want it to be?

What they don’t want is business as before – a sprawling ad-based conglomerate where one bit does well as others stutter. That means that, at best, it follows the overall ad market. But not even that’s happening at the moment as the vast majority of digital advertising is funnelled off into Google and Facebook, without any benefit to an ad agency. So WPP is lagging the ad market.

Neither do they want a major constituent of the FTSE100 ruled solely by one man. The autocratic Sorrell has just suffered an ignominious defeat in settling Eric Johnson’s legal case against JWT and WPP (below).

WPP has no COO and the only person with group-wide responsibilities is CFO Paul Richardson, Sorrell’s long-time financial lieutenant. If Sorrell is convicted of misuse of company funds, which he resolutely denies, then it’s hard to see how Richardson can evade the fall-out.

Of the other supposed internal candidates only Mark Read at Wunderman and Eric Salama at Kantar have sat on the main board. But both stepped down when they were given bits of the empire to run although Read retains the (non-PLC board) role of head of digital. Both are capable operators although Salama’s Kantar, WPP’s research operation, consistently brings up the rear in terms of profitability and is an obvious division for WPP to sell.

A break-up, orchestrated by a seasoned financial operator from elsewhere, is the likeliest option if Sorrell goes anytime soon. WPP owns big creative networks Grey, JWT, Ogilvy and Y&R and media agencies Essence, MediaCom, Mindshare and Wavemaker under the GroupM umbrella. Plus lots and lots of other bits including minority investments in media (which don’t seem be doing too well in the era of the Facebook/Gogle duopoly – one such was the Weinstein Company) and some agencies, including Johnny Hornby’s The&Partnership.

The key to such a move is media buying, the source of most holding company profits in recent years but now under pressure from suspicious clients and changes in the digital marketplace. could the big creative agencies go it alone without a media operation? The&Partnership includes media agency m/SIX.

In one of his many recent public utterances Unilever CMO Keith Weed observed that it was much simpler in the old days when, from his point of view, JWT in Berkeley Square was a creative agency with a media department and a PR agency and research operation under the same corporate roof.

Wunderman, now performing strongly under Read, and Y&R, in the process of being rejuvenated by former Grey Boss David Patton, were once both part of quoted American agency group Young & Rubicam. Under WPP they still occupy the same building in London’s Camden.

So a break-up into a number of substantial companies wouldn’t be that difficult.

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