A Rival Agency Is Next Chapter In the Saatchi Saga

By , Special to The Christian Science Monitor

MAURICE SAATCHI, ousted chairman of Saatchi & Saatchi, one of the world's best-known advertising agencies, is to launch a rival firm that will aim to take business away from the company he co-founded with his brother Charles 25 years ago.

But he is running into fire from managers at London-based Saatchi & Saatchi, who forced him to resign on Dec. 16. They say they will fight attempts by senior executives who have also resigned and want to help Saatchi in his new venture.

Clients on the run?

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Several of Saatchi & Saatchi's clients say they are reviewing their accounts. They include British Airways, Mars Inc., the American confectionary giant, and the British Conservative Party.

Mirror Group Newspapers, publishers of Britain's mass-circulation Daily Mirror, are also reported to be worried about Saatchi's departure. Cincinnati-based Procter & Gamble Company last week denied that it was reviewing its account with Saatchi & Saatchi.

Saatchi & Saatchi are famous in Britain for developing the campaign ``Labour Isn't Working,'' credited with helping to put the Conservative Party under Margaret Thatcher in power in 1979.

Maurice Saatchi announced plans to set up a rival agency soon after seven top executives resigned Jan. 9 in solidarity with him. The most senior figures who quit include: Jeremy Sinclair, who last month took over for Saatchi as acting group chairman, Bill Muirhead, the agency's chief executive in North America, and David Kershaw, head of its United Kingdom operation.

Saatchi's new agency no surprise

Saatchi's decision to counter his sacking by launching a new agency was widely anticipated. Lucy Broke, media analyst with James Capel in London, says Saatchi ``coordinated his moves'' with former senior colleagues.

Neil Blackley, media analyst with brokerage house Goldman Sachs & Co., says: ``They would not have decided to depart without somewhere else to go.''

Sir Tim Bell, a close friend and colleague, now a leading public-relations expert, is counseling Maurice Saatchi on strategy and tactics. The London-based Economist magazine reported Jan. 7 that a ``joint venture'' between the Saatchi brothers and Sir Tim's Lowe, Bell public relations agency was now a possibility.

Campaign, the leading advertising industry magazine, said the departure of a group of senior executives coming so soon after Maurice Saatchi's resignation was ``devastating'' for the company.

Lord King, president of British Airways, said Jan. 10 that Saatchi's forced resignation raised important issues of ``corporate governance.'' In a letter to the London Daily Telegraph Lord King asked: ``Are we to believe that a Chicago-based institution, owning less than 10 percent of the company's stock, is able to dominate board policy in the UK?'' Saatchi's ouster was the culmination of a campaign headed by David Herro, fund manager with Harris Associates of Chicago.

On Jan. 10, Charlie Scott, chief executive of Saatchi & Saatchi, apparently fearing defections by major clients, ordered a special presentation aimed at reassuring them that the agency was still in good shape. A group of 40 Saatchi & Saatchi staff who work on the agency's British Airways account were reportedly persuaded to stay at the agency, though Maurice Saatchi asked them to join him.

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