• by July 14, 2004

COULD A NEW MEDICOMGLOMERATE BE IN THE MAKING? - If Jon Mandel's business attire could be equated with Department of Homeland Security alert levels, then MediaCom has just gone from code red to orange. Mandel, who's been spotted wearing suits for the past three weeks (Real Media Riffs, July 13), showed up today in a sport jacket, albeit a pricey looking one, but far more casual and characteristic than the corporate garb he had been donning. Wardrobes aside, we're still not sure what all the frenetic going-ons up at MediaCom actually mean, but we hear that we'll all know pretty soon. The agency is now poised to make an announcement on Friday, ostensibly to introduce the new media services branding effort crafted by Chief Marketing Officer Jim Porcarelli. More than that, we're not really sure. But the timing of any announcement by any shops participating in Procter & Gamble's communication planning review is of keen interest, given the fact that P&G is expected to make its selection "any day now." Could it be that MediaCom has some inside knowledge - or an inside track? Could MediaCom's announcement be timed to capitalize on a P&G win, or offset a loss? We'll have to wait till Friday to learn that. Meanwhile, some outsiders are speculating on the bigger picture implied by MediaCom parent Grey Worldwide's self-initiated auction, and who is most likely to step forward with a bid.

The trade and general business press have had a field day with the cryptic statements made by Publicis chief Maurice Levy, who implied he's not all that interested in acquiring Grey in its entirety, but didn't rule out the possibility acquiring pieces of it. The statement was read by some analysts as narrowing the field of potential suitors to WPP Group. Given Sir Martin Sorrell's public statement of interest in Grey and the fact that he's the most acquisitive knight on the round table, the conventional wisdom is that WPP is the only suitor in what could turn out to be a Dutch auction for Grey, whose takeout value had initially been pegged at about $1.5 billion. That price tag does indeed seem to put many also-ran holding companies out of the running, especially financially beleaguered Interpublic Group, or prudently managed Omnicom. And it seems to be a bit more than can possibly be chewed by the likes of Havas or Aegis Group, whose respective MPG and Carat units are also finalists in the P&G review.

Frankly, we've been keeping an eye on the "float" issued recently by the original Madison Avenue takeover artists at the M&C Saatchi agency, but U.K investors apparently haven't exactly piqued at the prospects for their second act, giving Maurice and Charles far less market leverage than they had hoped for, and not quite enough to make a run at Grey. Then again, such a move would reunite them with a client that had formerly been dear to their hearts and pocketbooks.

What's the net of all this speculation? We're still trying to figure that one out, and needless to say, we'd welcome any suggestions, but given the potential humongous client conflict of a WPP buyout of MediaCom, which would pit Unilever against P&G, we don't think that's all that likely a scenario, no matter what kind of "independent agency network" spin Sir Martin would try to put on that one. Two more likely scenarios are either a bust-up of Grey assets, or, what about a management buy-out? In fact, the big reason behind the timing of Grey's play has more to do with the age of septuagenarian controlling shareholder Ed Meyer, than it has to do with a particular strategic vision. The question is whether key Grey managers could leverage the capital necessary to work out a deal. Then again, maybe that's the reason Mandel's been spotted sporting suits? Maybe he's not meeting with clients, or management, but with investment bankers? And if that's the case, could MediaCom be planning a spin-off as part of a bust-up of Grey? Hey, it's been done before. Remember The Media Edge? When alpha agency NW Ayer was ultimately sold, the management team of the Ayer media department was determined to retain their autonomy - and their jobs - and cleverly negotiated a spin-out deal, before they were ultimately gobbled up by Sir Martin's WPP and re-absorbed into a second media network now known as Mediaedge:cia.

Look, we're not saying that's all that likely a scenario, but if it were to happen, the question is where do you think MediaCom would ultimately end up? Given the cleverly worded statements of Publicis' Levy, we wouldn't be surprised if that one was already in the works. But we can't discount the possibilities of either Carat's Aegis or MPG's Havas creating a new MediaComglomerate.