Telecom company Sprint is preparing to conduct a comprehensive review of its agency roster, according to the CEO of its parent company, Softbank. The review is expected to cover creative, media and digital.
The company spends close to $1 billion on ads annually.
The review comes about six months after Sprint was acquired by Softbank for nearly $22 billion. Shortly after that, Sprint CMO Bill Malloy indicated that he would leave the company in the spring of this year.
It was just over two years ago that Malloy -- who had then recently joined the company -- fired lead agency Goodby Silverstein & Partners, the Omnicom shop, without a review and put in place an entity called Team Sprint that was led by Publicis Groupe’s Digitas (now DigitasLBi). Sibling shop Leo Burnett was tapped for creative duties and media shifted from WPP’s Mindshare to Publicis Groupe as well.
But according to the Chairman and CEO of Sprint parent Softbank, Masayoshi Son, Team Sprint hasn’t been getting the job done. He said last week that “Sprint spends a large amount of money on advertising every year, but its effects have been almost negligible.”
Son’s comments came in a guest column for the Nikkei Asian Review. “I directed the Sprint executives to terminate all existing contracts with the company's advertising agencies. We will shortly start from scratch on advertising, with new agents also making proposals.”
The article was more broadly focused on lessons in business leadership that Son had learned over the years. He said he had erred previously in allowing the U.S. management of some acquired companies too much leeway to run companies as they saw fit.
“Just like Vodafone in Japan, Sprint has gotten used to being a loser,” Son wrote. “It is perpetually stuck in third or fourth place in the U.S. telecommunications market. Some say the poor quality of its networks explains its position. This kind of excuse keeps Sprint from breaking the vicious cycle in which it is caught. There is a need for a change in mindset.”
That point of view could also potentially affect the agency roster at competitor T-Mobile. Softbank has approached T-Mobile about a possible $20 billion acquisition. Publicis & Riney is T-Mobile’s creative agency.
A DigitasLBi rep didn’t immediately respond to a query about the review. A Sprint rep
indicated that the company has not begun a review "at this time." He declined to elaborate or comment on Son's remarks.
This story has been updated to include input from a Sprint rep.