• Adweek, Friday, July 2, 2010 11 AM

Alex Bogusky's resignation from MDC Partners and its flagship agency, Crispin Porter + Bogusky, underscores one of the biggest challenges the Toronto-based holding company faces, Noreen O'Leary tells us.

MDC's business model of acquiring entrepreneurial companies is being tested as the founders of its early acquisitions now cash out. At the beginning of this year, MDC was due to pay the remaining earn-outs of $47 million in cash and stock to principals at its two largest agencies, Crispin and Kirshenbaum Bond Senecal + Partners. KBS+P and Crispin together contribute about 35% of MDC's revenue.

Bogusky's exit from MDC, which is a huge blow from an image perspective, follows the departure of Jon Bond in February, who left KBS+P after 23 years. Bond has since reemerged to bankroll new digital competitors to MDC companies.

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