INTERNATIONAL: THE GLOBAL PLAYERS; Machiavellian who needs to turn things around at Havas
By ALASDAIR REID, campaignlive.co.uk, Friday, 26 April 1996 12:00AM
Alasdair Reid explains how the fortunes of Havas are linked to Pierre Dauzier’s policy making
Alasdair Reid explains how the fortunes of Havas are linked to Pierre
Dauzier’s policy making
‘The most important thing to understand about Pierre Dauzier is that he
is Machiavellian,’ one French source says. ‘It would not be wise to
underestimate him. Having said that, he might just have made one of the
biggest mistakes in his career.’
Dauzier is the chairman of Havas, one of the world’s biggest
communications companies. He’s been in the top job for almost a decade,
during which time he has steered the company, or more accurately its
subsidiary, Canal Plus, into a prominent position in European
But he’s not had the best of Easters.
Recent manoeuvring, which was designed to strengthen the company’s
position, may have done just the opposite.
Alongside Germany’s Bertelsmann and the Luxembourg-based CLT, Havas is -
or was - part of a triumvirate of media owners preparing to take the
great leap into the digital age.
Havas was a founding shareholder in CLT (it now owns 20 per cent) and
the two companies have always seen themselves as strategic partners. In
turn, CLT has close links with Bertelsmann.
They joined forces to launch one of the first private commercial
channels, RTL, in Germany, when that market was deregulated in the mid-
80s. They have since launched many more channels together.
To complete the triangle, Canal Plus, which is a world leader in
subscription TV and has been preparing to introduce digital systems in
France, has been working in partnership with Bertelsmann to develop the
Media Box digital system in Germany.
This three-way axis already dominates European broadcasting. The control
of digital technology would guarantee their position well into the next
century. It all looked very cosy.
But their reckonings did not take account of Rupert Murdoch. Murdoch
knows a thing or two about pay-TV and has been demanding access to the
club. As a result, CLT and Bertelsmann recently came to the conclusion
that he would make a better friend than an enemy and proposed an
Dauzier was the Havas representative at a CLT board meeting in March
when it was agreed that CLT, Havas and Bertelsmann should form a joint
venture company with BSkyB to develop digital systems.
Dauzier assented, but promptly returned to Paris and called the French
premier, Jacques Chirac. He persuaded Chirac to call the prime minister
of Luxembourg in a bid to force CLT to pull out. Dauzier’s argument was
that it would be disastrous to help Murdoch gain a foothold in Europe.
It would be contrary to the interests of Canal Plus and would undermine
the Havas-CLT relationship, he maintained.
Which made Dauzier’s next step completely baffling. He immediately
instigated separate talks with Bertelsmann and Murdoch, and proposed a
three-way agreement that would cut CLT out of the picture altogether.
Machiavellian to say the least.
However, CLT’s response was dramatic. Earlier this month, CLT and
Bertelsmann merged their broadcasting interests. As media deals go, it
is up there with Time-Warner/Turner and Disney/ ABC. Meanwhile, Murdoch
has forged closer links with Bertelsmann.
In short, it is Havas that could find itself out in the cold. Needless
to say, Dauzier has a lot of explaining to do.
Not that Havas is just a TV company. From an Anglo-Saxon perspective, it
has always seemed a perplexing entity. As well as TV, it has interests
in radio stations across the whole of Europe. Its Avenir division, which
owns Mills and Allen in the UK, is a major outdoor player across Europe.
It also owns a vast network of regional newspapers and business
magazines in France, and its IP Group is the biggest media sales network
That’s all very well, but we are not quite so happy about media
companies owning agencies - and in Euro RSCG Worldwide (although it is
kept very separate) Havas has one of the biggest.
Of more concern, in France and elsewhere, is the company’s political
heritage - it was an obstacle to it forming international links on the
ad agency side.
Until 1986, Havas was effectively the French government’s ministry of
communications. The state exercised control through a 45 per cent
shareholding and when a new government was elected, one of its
priorities was to hand the Havas chairmanship to a political ally.
Dauzier was the last person to benefit from this system of patronage
through his close friend, Chirac. The government’s stake in Havas was
subsequently sold off - but old habits die hard. Euro RSCG agencies take
60 per cent of government advertising in France and the state still
exerts a big influence on its thinking.
But privatisation did allow the agency side to flourish internationally.
In the 80s, it gained experience outside Europe through HDM, a three-way
joint venture with Young and Rubicam in the US and Dentsu in Japan. When
the partnership dissolved, Havas began folding its worldwide interests
into the Euro RSCG brand and expanded through acquisitions.
Maurice Levy, the chairman of the rival Publicis Group, says that the
move has forced rivals to rethink: ‘We all thought that Havas was so
focused on the media side that it would have to stop investing in
advertising and would eventually be forced to sell. I don’t think it
would have made this move if that were still the case. But who can say?
Strategically, things at Havas have been hectic. Who knows what Dauzier
will do next? The relationship with CLT was central to the company’s
long-term plans and that seems to have been abandoned overnight.’
The focus at Havas will undoubtedly remain, as it has been since
privatisation, on broadcasting. But, as the implications of the CLT-
Bertelsmann deal sink in, Havas is having to face up to the fact that
its long-term strategy is now in tatters.
There have been crises before and many will argue that Canal Plus is too
powerful to stand on the sidelines for long. But Dauzier needs to do
some quick thinking. Is his leadership irreparably damaged? Don’t bet on
it. He’s proved that he’s a survivor, and has powerful friends. And
maybe he has something more important in his favour. As one observer
puts it: ‘Havas is controlled by very powerful institutional investors.
Cynics here say that he’s still in the job because they’ve never been
able to agree on anyone else.’
Havas’s worldwide interests
Canal Plus runs subscription TV channels in France, Spain, Poland and in
Africa, has shares in the Premiere and Vox TV channels in Germany, and
TV production facilities and technical development divisions. It is a
shareholder in CLT, which owns or has shares in RTL 9, M6 and
Multivision in France, RTL Television, RTL 2 and Super RLT in Germany,
RTL4 in the Netherlands and Club RTL and RTL TVI in Belgium. It also has
the radio stations, RTL Onde Longue and Fun Radio, in France, Atlantic
252 in the UK and 104.6 RTL in Germany. Through the IP Group, it is the
largest shareholder in the UK’s Capital Radio, with 19 per cent.
The IP Group either owns or has a major stake in media sales operations
in France, the UK (IP-TSMS), Germany, Spain, Portugal, the Netherlands,
Belgium, Luxembourg, Switzerland, the Czech Republic, Slovakia, Hungary,
Ukraine, Belarus, Lithuania, Latvia and Estonia.
It has the Comareg French newspaper group, CEP Communications book
publishing and trade press magazines, Groupe de la Cite book publishing,
Telestar and the magazine, Top Sante.
It has 100,000 sites, 49,000 of which are in France under the Avenir
brand (Mills and Allen in the UK), plus transport and airport
advertising, including Sky Sites.
Havas Advertising has four divisions: Euro RSCG; Campus; media,
including Mediapolis, which is run as a joint venture with Young and
Rubicam; and Diversified Agencies, which groups its below-the-line
This article was first published on campaignlive.co.uk
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