Close-Up: Profile - Media's most entertaining investment banker

The head of Lehman Brothers' UK operations has a passion for media. He shares some of his thoughts with Bob Willott.

Lehman Brothers' London headquarters towers above the Docklands' capital of capitalism, just a stone's throw from Canary Wharf. And presiding over the US investment bank's UK business from the 30th floor is Anthony Fry - two months into the job after being headhunted from Credit Suisse First Boston.

Fry, 49, dresses smartly in a dark suit, as befits a member of the financial fraternity. But despite having been the treasurer of the Oxford Union, and spending the first 18 years of his career with the blue-blooded Rothschild's merchant bank, he does not quite fit the mental mould of traditional City gent. He is lively, worldly and eloquent. He might even converse with a creative director for more than two minutes without either party dropping into a coma.

It's Fry's enthusiasm for the media sector that has brought him to the attention of Campaign. For not only is he the boss of Lehman's UK operations, he is also the chairman of its media group, whose tentacles stretch across the whole of Europe.

How did Fry come to be specialising in the media? At Rothschild's he had worked on several privatisation projects before advising the Government on setting up the National Lottery. Then he helped put together a bid for the business, only to be rejected. Having "wasted so much of the bank's money", as Evelyn de Rothschild put it, Fry was asked how he was going to justify what he had been doing.

His response was to exploit the contacts he had made with companies who had been pitching for the Lottery TV contract and to build a specialism in gaming and the media. Soon he had moved on to set up a global media specialisation at BZW, which was taken over by Credit Suisse shortly afterwards.

"I came to the view that becoming sector-focused was probably quite good and media seemed a pretty fun place to be. So I transmogrified myself from 'Mr Privatisation' to 'Mr Gaming and Media'," he says.

On the UK stock market, the media sector is not the biggest or the most obvious breeding ground for an investment bank's top executive. "It's actually quite a big sector in its own right and it needs the type of services that focused investment bankers can provide," Fry argues.

"Most investment banks organised themselves as telecoms and media businesses, with bankers who specialised in telecoms and only started thinking about media in their spare time at three o'clock on a Friday afternoon."

Companies in the media sector may be few in number, but their shares are 50 per cent more expensive than the average for the stock market as a whole. Fry has a simple explanation. "More buyers than sellers," he says. "The marketplace determines it. There's always an expectation of activity in the sector. That underpins a lot of the rating."

Fry reckons there is plenty of room for further growth by the global groups such as WPP and Omnicom in terms of their market capitalisation, and that they will extend their range of services to satisfy their growth ambitions.

He moves into controversial mode: "In the heyday of Saatchi & Saatchi, everyone in the market said they had completely lost the plot when they tried to make a bid for Midland Bank. But when you look at the structure of the average global advertising agency today, it is much, much closer to a position where a bid for a bank makes some degree of sense. In essence, marketing services conglomerates today are providing a range of services to the corporate customer. That's what a bank does. I am not suggesting that suddenly you will find Lehman Brothers advocating that the advertising community should buy banks. It would be regarded as odd if Sir Martin Sorrell said he was going to bid for HSBC, but it would not have the same resonance of oddity as when the Saatchis tried it."

Discussion turns to the recent growth of smaller, mainly AIM-listed marketing companies such as Media Square and Huntsworth. Fry sees these vehicles as future fodder for the major global groups, which are less eager to acquire small marketing services companies unless they fill a niche need: "The global group will wait for a smaller group to do so and then make a single acquisition of that vehicle rather than doing lots of small deals itself."

Do global marketing and media groups such as Omnicom, WPP and News Corporation have all the skills inside to manage their ever-expanding empires?

"Probably most of them have. I think WPP is a pretty smoothly functioning machine. WPP is very much Sir Martin's creation - no doubt about that - and he has an astonishing drive and energy, and ability to multi-task," Fry says.

"Rupert Murdoch's the same - balancing strategic vision with immense attention to detail. These businesses also employ a higher concentration of huge egos at every level of the organisation than you will find almost anywhere else. So they must be able to manage the big picture as well as nurture great talent."

But despite the growing management professionalism that has permeated the industry, many media companies have continued to be ruled by powerful barons like Conrad Black, some of whom seem to have limited time for faddish ideas such as corporate governance - more buccaneers than bureaucrats.

Fry chooses to sideline Robert Maxwell as "a regrettable exception", but acknowledges that the nature of the newspaper industry tends to attract a certain type of person. However, he sees considerable merit in media companies having strong leaders with a clear vision: "You can't account for people's taste, what they will buy and how they will go about it in the future. Unless you are really somebody with a very strong conviction, it is very hard to direct the business strategically."

Global marketing groups have also attracted some dominant leaders, not least WPP's Sorrell, Publicis Groupe's Maurice Levy and Grey's Ed Meyer.

Bearing in mind the problems that followed Phil Geier's retirement from Interpublic, is there not a risk that dominant leaders will be followed by weak successors and a serious degradation of the business?

Fry acknowledges that the sign of a really good leader is to be able to hand over a business that will continue to grow. "Sir Martin is a businessman first and has constructed an entity that has huge capacity for longevity. Does that mean it is going to be the most successful? I don't know," he says.

His final word on succession comes in a quote from Lord Carrington in response to a questioner who asked what would happen if Lady Thatcher were to be run over by the proverbial omnibus: "No bus would dare run her over!"

But just look at what happened to the Conservative Party after she had gone.

- Bob Willott is the editor of Marketing Services Financial Intelligence ( and a special professor at the University of Nottingham Business School.


Going for an IPO - The stock market is not a place for media and marketing services groups whose owners want to retain proprietorial control and are not acquisitively minded.

Fat cats - High rewards for superior performance are not generally frowned upon by institutional investors. But they do object to executives being generously rewarded for failure.

Short-termism - Short-termism is partly the fault of those businessmen who, while pleading the case for a longer-term view, accept jobs as pension fund trustees and then demand that the fund managers achieve quarterly performance targets.

Share prices - Buyers will overpay for shares in acquisitive media sector companies on an upward growth path and then they over-react when they fall into decline.

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