Mark Penn’s Stagwell Group has thrown a new lifeline to agency holding company MDC Partners, investing up to $100m for a 30 per cent stake.
Penn (below), a former senior Microsoft exec and one-time head of Burson-Marsteller will become CEO of MDC and join the board. Former CEO Scott Kauffman, who stepped down last year after a profit warning, remains on the MDC board.
Stagwell says it’s a new-style holding company, unencumbered by “legacy” issues although, on the face of it, MDC has plenty of those. Its agencies include Anomaly, 72andSunny, Crispin Porter Bogusky and Forsman & Bodenfors, all strong creative agency brands but facing the same problems bedevilling other such agencies including clients cutting fees and in-housing some agency functions.
MDC has been on the block for about a year now with Accenture Interactive tipped by some to make a bid. By some definitions, though, Accenture is the biggest agency in the world already (consultants included) and seems to have decided it’s better off cherry-picking the agencies it wants rather than taking on a struggling holding company with plenty of debt.
MDC was created by colourful entrepreneur Miles Nadal who was fired over his expenses. Senior MDC agency leaders have thought long and hard about buying themselves out but the debt of around $1bn is the problem.
Stagwell’s Penn claims to have advised Bill Clinton and Tony Blair in his time. He will need all of his diplomatic skills to get MDC firing.
But his move for MDC introduces another interesting “alternative” holding company to the marcoms fray. Another one, David Jones’ You & Mr Jones, recently bought on-site agency specialist Oliver for a substantial sum.