CLOSE-UP: Why Delaney’s chiefs shunned FCB deal - LIVE ISSUE/DELANEY LUND KNOX WARREN/The four directors decided to stay loyal to their shop, Francesca Newland writes

An unusual event occurred in the advertising world last week. Out of loyalty to each other and their agency, four company directors decided to reject the prospect of high-flying jobs and are instead taking on the risks of setting up a new agency.

An unusual event occurred in the advertising world last week. Out

of loyalty to each other and their agency, four company directors

decided to reject the prospect of high-flying jobs and are instead

taking on the risks of setting up a new agency.



And Delaney Lund Knox Warren is an unusual start-up. Four of Delaney

Fletcher Bozell’s top management team have resisted True North’s desire

to merge its Bozell and FCB network, and are instead negotiating a

separate deal with True North’s chairman, David Bell.



Of the four, it is believed that the chief executive, Mark Lund,

sacrificed the most exciting position - chief executive of the merged

FCB.



The chairman, Greg Delaney, is thought to have had the European creative

director job on offer but the future of the joint managing directors,

Tom Knox and Richard Warren, had not yet been decided. As Lund says:

’The only way the merger would be easy was if one team comes out clearly

on top. The FCB lot will be in charge. You have to get that

clarity.’



For Delaney Fletcher, the prospect of a merger could not have come at a

worse time. Business has been booming. As Warren says: ’We’ve reached a

crescendo and don’t want to end it now.’



Ironically, it is the tenth anniversary of Bozell’s London agency and

the staff celebration was scheduled for the day after the news of the

merger broke.



Delaney says: ’It had got to the point where we were doing better than

ever. People underestimate how long it takes to put a successful

business in place and how difficult it is. We all felt we didn’t want to

sacrifice that.’



This year alone, the agency has won a serious amount of business:

Hoverspeed; UK TV; Del Monte; CIC and FT.com among others. And it is

also on eight pitchlists at the moment.



However, some pitching business (such as Harp) clashes with FCB clients

(like Coors).



Crucially, Delaney Fletcher is also on the most important COI lists,

pitching for the pounds 50 million anti-smoking business as well as the

nurses task. FCB is not on the COI roster and Delaney Fletcher felt the

merger would jeopardise its chances in the pitches as well as its

existing COI business, which includes Teacher Training and National

Blood Donors.



The merger would also have forced the agency to sacrifice some of its

best accounts. The Financial Times clashes with FCB’s Daily Mail

business; Save & Prosper with b2; CIC with Buena Vista Home

Entertainment; Del Monte with Tropicana, and Bestfoods with Sara

Lee.



Even Harry Reid, international president of FCB, concedes: ’There were

too many conflicts to make a merger viable.’



But of equal importance in the directors’ decision was their loyalty to

each other. Lund, Delaney and Knox have worked together for four

years.



Warren is newer to the team, having joined only 18 months ago, but he

has known Knox since their student days.



Lund, motioning to his three partners, says: ’This group has established

a working relationship which is very enjoyable. We trust each

other.’



The partners also point out that setting up a separate agency will

minimise redundancies. In an unfortunate choice of word, Lund insists

Delaney Fletcher is a ’nice’ place to work. He says: ’I’m firmly of the

belief that, in business, nice is good. Nice is Darwinian.’



The form that Delaney Lund Knox Warren will take is still unclear. But

clients are making positive noises about staying with the new

agency.



Lund says: ’We are confident they will give us a very good chance.’ The

clients they hope to hang on to are the domestic ones including the

Financial Times, COI, CIC and Harmony, as well as any wins in the

pipeline.



True North is taking a ’significant minority stake’ in the new agency,

and the partners are grateful to Bell for thinking laterally and finding

what Knox refers to as an ’elegant solution’ to a potentially bad

situation.



It is hard not to believe the partners’ apparently honourable motives

for staying together; they would not be doing this otherwise. When asked

what their long-term objectives are, there seems to have been a distinct

lack of consideration. Lund says simply: ’We want to build the

business.’



Should they wish to, it won’t be easy to sell the agency. True North is

not likely to want it back as it will be riddled with clashing clients,

so the only other option will be to buy out True North and sell it on to

another group.



However, the partners are adamant that selling the agency is not an

issue.



Knox says: ’The idea of selling is not on the radar.’ Lund adds: ’If you

think about selling, it means you will concentrate on profit at the

expense of the health of the business.’



It is hard to predict how the new agency will fare. If all goes well, it

will open with an enviable list of clients, and the winning talents of

the partners do stand it in good stead for growth - but there is no

getting around the fact that it will be a very small agency. However, it

seems that the partners are not worried about that.



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