THE PRINCE OF MADISON AVENUE: Dan Snyder - Stefano Hatfield meets the young mystery man who built up a major marketing group and bought the Redskins

Bethesda, Maryland is a long way from Madison Avenue. It’s Blair Witch country, where mustachioed men in conservative suits appear to be burdened with a dark secret. Perhaps it’s that they’re married to Stepford Wives.

Bethesda, Maryland is a long way from Madison Avenue. It’s Blair

Witch country, where mustachioed men in conservative suits appear to be

burdened with a dark secret. Perhaps it’s that they’re married to

Stepford Wives.



To get to the world headquarters of Dan Snyder, the young pretender to

the global advertising oligarchy, you leave Washington DC for the

surrounding Virginia woods. After a morning in Washington - in summer

recess, the world’s most boring city - you’re desperate for a big

surprise.



With the deadpan intonation of a tour guide, our amiable linebacker of a

driver imparts details that set the pulse racing: ’There’s the

Pen’agon.



That’s the CIA’s campus - you can’t see it of course, but it’s there OK,

hidden from the road. You see those trees up there? That’s where the

Clin’on’s lawyer committed suicide over Whitewater.



’Steve Case’s new house is over there, with a view of the Potomac. Cost

dollars 16 million.’ Case, the founder of America Online and America’s

second-richest man under 40, has just acquired Jackie Kennedy’s old

mansion. ’New money’s buying up the old,’ the driver says, leaving a

pregnant pause. ’This is my last week in this job. Then I’m going to

drive for (Mr Case) full-time.’



With that we sweep into Crawley business park, or is it Milton Keynes?

Three identical, antiseptic office buildings make Canary Wharf seem like

Soho. In the middle building where Snyder is based, I have a deli

sandwich with Donna Nicholson, Partners BDDH’s dynamic and enthusiastic

new-business director, who is my shadow for the trip. It’s 12.30. The

lunch-time rush is nearly over.



’You’re young,’ Snyder says insistently, ’you understand. The world has

changed.’ I believe mistakenly that he is addressing Nicholson. He can’t

mean me. Like Snyder, I’m 34 and married with two young daughters, but I

haven’t built up the world’s 11th-largest marketing services company,

nor have I just bought the Washington Redskins for dollars 850

million.



He’s talking in the nondescript office that is the hub of the Snyder

Communications empire. It’s just like any other functional office in a

business park, only a little larger. And, in his double-breasted suit

and businessman’s spectacles, he could be any other smart, young,

thrusting US executive. ’Personality’ is provided by a framed ’number

seven’ Redskins shirt with Snyder’s name on it.



There’s no getting away from it, being the boss of the Washington

Redskins changed Snyder’s life. The Redskins, and their deadly rivals,

the Dallas Cowboys, are the Liverpool and Manchester United of American

football. In the US, it’s no longer Dan who? It’s Dan, the guy who owns

the Redskins. It sure impressed our driver.



This fulfilment of a childhood fantasy has come at a cost greater even

than the price. Although the Redskins deal was conducted as a personal

deal (Snyder led a private consortium - NFL rules preclude a corporation

from owning a franchise), there has been an uneasy coincidence of the

Redskins purchase and this summer’s pounding of the Snyder share price.

It made observers wonder whether the Midas touch had deserted him after

ten years of apparently inexorable growth. The recent three-way stock

split is the big throw of the dice aimed at resurrecting the company’s

position on Wall Street.



Before the fall, here’s the rise: Snyder, together with his sister,

Michele, now president and chief operating officer, founded the group in

1988.



He began in healthcare marketing, but not through healthcare ad agencies

as we have come to understand the term today.



Instead, Snyder provided advertising wallboards in doctors’ surgeries

and on campuses, and sales forces for major drugs companies like Bristol

Myers Squibb selling in the field directly to pharmacists and

physicians.



The group also provides educational and marketing services to the

healthcare industry, ranging from books to conferences.



The Bounty ’new mother sample pack’ that most new mothers receive in

hospital is an example of the crossover between Snyder’s healthcare

division and his direct marketing operations.



Direct marketing, sales promotion, sampling and database marketing from

clients now constitute some 70 per cent of revenues from ’mainstream’

advertising - whatever that now means. Today, Brann is by far the

world’s largest global direct network.



It wasn’t until March 1998 that Snyder got sexy. That’s when it acquired

Arnold Communications, the Boston-based advertising agency that is best

known for stealing the US Volkswagen account away from the mighty DDB,

and then creating some great work including last year’s relaunch of the

Beetle. Arnold is the fastest-growing ad agency in the US.



The night before meeting Snyder, we’d had dinner in Boston with Ed

Eskandarian, the genial chairman and chief executive of Arnold.

’Advertising isn’t rocket science; I should know, I was a rocket

scientist,’ is a favourite Eskandarianism. It refers to his time spent

working as an engineer for NASA, designing heat shield tiles for the

space shuttle.



Since Eskandarian himself acquired Arnold as a dollars 40

million-billing local shop in 1990, he has presided over its growth to

the dollars 1 billion-plus entity that it is today, with more than 1,100

employees and 15 offices in North America. The client list is headed by

Volkswagen, McDonald’s, Fleet Bank, Mobil and Bell Atlantic.



Soon after our visit, Arnold won the dollars 250 million US anti-smoking

account.



The place is on a roll, breaking into the US top 15 and heading for the

top ten. What’s more, unlike many of its older rivals, it is doing so

organically, winning more than 20 accounts since the Snyder deal.



You can see why the combination of Snyder and Arnold was so attractive

to Partners BDDH’s chief executive, Nigel Long, last year. Not only was

Arnold as hot as any current US agency, but the Snyder group’s origins

in non-traditional advertising services appeared to be the right offer

for the times.



What’s more, the Snyder share price was on the march to its April 1999

high of dollars 52. The proposed dollars 27.7 million acquisition of

BDDH seemed like a great idea at the time. Particularly as payment was

in Snyder shares.



Then came the plunge. After months of tempered growth expectations, in

July this year Snyder announced a restructuring aimed at clarifying its

operations.



It was to be reborn as Snyder Communications (Arnold and Brann), Ventiv

(healthcare) and circle.com (new-media operations). However, the pounds

23 million restructuring cost was some dollars 10 million more than Wall

Street had anticipated, and the share price took a bath. Snyder lost 25

per cent of its value in one day and found itself trading at dollars 20

a share.



It has been a slow climb back. Some US analysts believe the stock was

punished too severely, and expect it to return to perhaps dollars 45 a

share. Certainly, the underlying performance of the group is better than

the recent stock performance.



The obvious, if insensitive, question to ask Snyder is therefore: you

can’t be very happy that your personal wealth has so diminished

recently?



’It’s not fun. It’s embarrassing. It’s not something you would say is

positive. But it’s not permanent,’ he says with quiet conviction. ’We’re

not expecting to double our stock in six weeks but in the next six

quarters you’ll see wonderful things take place. We believe that we’ve

had an over-reaction to the break-up of the company. We probably had too

much of a momentum-based shareholder-base. But we make dollars 100

million profits.’



So, were you over-valued?



’I don’t think we were ever over-valued. The stock got ahead of itself

at dollars 50. I’m not sure if you know, but we bought four million

shares back because we think it’s unbelievable value.’



One of the major reasons for the break-up is that Wall Street -

allegedly - never really understood Snyder Communications. Snyder

comments with resignation: ’We’re not that difficult to understand. But

in the three years we’ve been public, a lot of healthcare companies have

come in to the market. They are now in the same space as Snyder

Healthcare. These companies created a wall between healthcare and our

advertising businesses. Wall Street tends to put things into simple

boxes, and pharmaceuticals are not in favour right now.’



Surely the Redskins purchase has some bearing on this confusion?



’The Redskins and our stock price are unrelated,’ he responds, clearly

not for the first time. ’People like to make a coincidence of that. It

sounds very large, and it’s profitable business, but it’s 100 people -

nothing more (Snyder Communications now employs more than 9,000). It’s

more of a passion for me.’



It certainly gives him a profile. Snyder knows he can no longer afford

to be ’Dan who?’ if he is to be taken seriously as a global

competitor.



Although he claims to have made his major acquisitions (’we’re not

looking for MacManus or Leo Burnett’), he is not entirely convincing on

the subject.



Some acquisition is on the cards, particularly in New York, but Snyder

is refreshingly matter-of-fact on the subject. ’There’s not a whole lot

out there,’ he says, insisting he is not interested in placing flags on

maps.



Why should Snyder remain immune to the global business forces that

suggest there is not much future in being a mid-sized agency

network?



’We may not. We may not,’ he says, smiling. ’But sometimes the little

fish can swallow the big fish.



’I think Arnold can be much bigger. If we continue to do the work we’re

doing, we’ll end up in the top ten very quickly.



I do buy the idea you can’t afford to be too small but I think we’ve got

enough meat and potatoes at Arnold and Partners BDDH. We’re not going to

open up fragmented offices in every country and cause old technology

problems in a new technology world.’



The new world order is a favourite theme: big groups are no longer run

by admen; it’s easier to cross-fertilise from below the line; the ’line’

is irrelevant; specialty and depth of service will be more important

than geography; the big players need to do something about conflict, and

get away from commission.



Snyder feels that most of the major advertising groups are pursuing

similar strategies, but that Snyder Communications is ’coming at it from

a different route’ because of its direct strength.



However, he does not believe that consultants are a threat, but is

interested in adding consultancy services to the group’s offer. ’I’m not

so sure you buy, maybe you build it,’ he says.



Snyder is clearly pleased with his Partners BDDH acquisition, although

despite dramatic growth in the past 18 months, it’s small beer compared

to Arnold. He refers flatteringly several times to Nigel Long, viewing

him as another of the relatively young managers he is so happy to have

around him.



’My age? It is an advantage. People see us for what we are, which is

very smart, strategic individuals. We don’t get into the

muckety-muck. This is not about corporate policies and procedures. Look

at IPG and the team there. I think we’re night and day on our

focus.’



Omnicom is the competitor Snyder most admires because ’they’ve done the

best job of managing the convergence of the marketing world and

understanding their clients’ needs’. He also expresses personal

admiration for Peter Georgescu, the worldwide boss of Young & Rubicam,

but claims not to know too much about Martin Sorrell to whom he’s

sometimes compared.



One difference is his remuneration package. ’Do you know how much I get

paid? dollars 300,000. That’s it,’ he says with a tone that suggests I

should find such as a sum offensive. ’And stock options. But, I own a

lot of stock which I don’t plan on selling until it’s very, very high

one day.’ And the stock’s the point with Snyder. He’s a businessman,

with no great strategy, but an opportunistic bent. Whether he is here

for the duration or not depends on what that stock does over the next

few months in response to the three-way split.



I couldn’t say I knew Snyder having met him. An anglophile, he was

perfectly charming, polite, responsive and impenetrably middle-American.

He is an ordinary home-loving family man, who loves business and

grid-iron (obviously), but his achievements at such a young age are

extraordinary.



I see where he’s coming from - literally - having been to Blair Witch

country. And, he’s not to be under-estimated. His companies really are

performing better than the stock. Arnold is the hottest agency in the

US. But, the stock’s the thing. If it doesn’t perform soon, then the

vultures will circle. But Snyder will come up smelling of roses, one way

or another.



He’s an opportunist.



As we leave, Snyder invites us both to the Superbowl in January (wow!)

and delves into a cupboard to hand us two American footballs. ’Hold on a

minute,’ he says. ’I’ll just get them signed.’ I’m gobsmacked. Where had

the Redskin players been lurking during our interview? But he gets out a

marker pen, and autographs the ball himself. ’Thanks for being a

Redskin, Stefano,’ he writes. I take it as a compliment. In Bethesda,

what else could it be?



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