As well as its trading problems WPP also has legal issues on its plate: notably class action lawsuits in the US stemming from its profit warning in the summer and now a claim from Richard Foster, CEO of WPP Media’s Motion Content Group (branded entertainment and programming) until July for $100m in damages for terminating him and the Group.
Foster (left) is claiming that over his long period with the company it generated rebate-driven deals valued from $3bn (£2.3bn) billion to $4bn (£3.04bn). From that, the media-buying subsidiary “improperly” kept around $1.5bn (£1.14bn) to $2bn (£1.5bn).
This is a traditionally grey area of media buying and much depends on what’s in the contract with the client/advertiser. It was supposed to be resolved in the US back in 2016 when the Association of National Advertisers (ANA) commissioned a report into such smoky practices and agencies said they’d clean up their act.
Foster says he brought this to the attention of WPP executives on many occasions but nothing material changed. WPP says; “The company is aware of a lawsuit in the New York State Court filed by a former employee who was let go in a recent organisational restructuring. The court has not yet made any findings in relation to the allegations and we will defend them vigorously.”
WPP Media, formerly GroupM, is busily retrenching, meaning thousands of jobs will be lost. This also means that many more purported “revelations” will surface.
