New Saatchi for Old

By Benady, Alex | Marketing, January 19, 1995 | Go to article overview

New Saatchi for Old


Benady, Alex, Marketing


It's three weeks since Maurice's break with Saatchis. But its clients have been virtually forgotten in the tumult. How much confidence do they really have in the agency and The New Saatchi Agency?

If, as marketing theory predicts, a high profile attracts triallists, there should certainly be no shortage of prospective clients beating a path to the as-yet-unmarked door of The New Saatchi Agency hoping to share in the Saatchi magic.

Relieved of the usual difficulty of gaining a profile and winning business, the new agency faces three different problems. Ironically, the first is Maurice Saatchi himself. The second is the legal blitz about to hit Maurice and his seven Saatchi & Saatchi defectors. And the third is the nature and structure of the new agency.

Charismatic beacon

When Saatchi left last December, it was to the rapturous applause of those who valued "creativity" above accountancy - despite the fact that he was always the money man and has never written an ad in his life.

"He has skillfully cast himself as a much put-upon hero, a charismatic beacon keeping alive the flame of creativity in advertising," observed one top-ten agency chief.

He also positioned himself as the clients' champion - certainly Forrest Mars and Lord King regarded him so. And if his behaviour was a little vindictive at times, well, he was being treated badly. "He was in a fight. It is hardly surprising things got nasty," said a senior industry figure.

Others object to the damaging way that Muirhead, Kershaw and Sinclair may set up in competition, despite clauses in their contracts preventing it. "Why do you suppose they were paid such astronomical salaries in the first place if not to ensure compliance with contracts," reasoned a highly-placed executive in a Saatchi & Saatchi operating company?

Writs

Their loss certainly inspired a flurry of writs from their former employer, which is trying to keep the seven defectors to their contracts. The plc says it may even try to prevent Maurice from using the name Saatchi in his new agency.

However legal experts believe the company could be facing an uphill struggle to hold "the three amigos" to their contracts. "The courts are reluctant to enforce these kind of restrictions on individuals. They may stop people working in some cases, but the maximum is likely to be for between three and six months," says Mike Burd who heads the employment section of solicitors Lewis Silkin.

[pounds]70m billing

Assuming that NSA can ride out the coming legal battles, the agency still faces considerable problems. For starters it has the task of supporting an overhead in the form of seven directors whose combined remuneration at Saatchi & Saatchi would have been around [pounds]2m a year. "They would need about [pounds]70m in billings just to support them," said a top five agency chief.

Insiders say that men of the calibre of Kershaw and Muirhead would only resign "on the promise of something definite". That promise has been widely assumed to be all or part of the [pounds]85m British Airways account. In fact a Saatchi & Saatchi source said the defectors were so confident that they have already promised jobs to the 40 people working on the business.

Even so, to service such an account - and to be in keeping with Maurice's ambitions to be a global player, NSA would need a fully-fledged international network. "Constructing their own would take years," points out Winston Fletcher, chairman of DFSD Bozell. Some predict that in the short run they are most likely to use another agency network as a distribution system. McCann-Erickson, Lintas, Y&R, and TBWA are all possible contenders.

Multinational business

This, however, would still mean that NSA would be limited to running big strategic campaigns from London. "Tactical support for local operations and running multi-brand, multinational accounts would be beyond them," predicts Fletcher. …

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