Cordiant crisis deepens as Sky prepares to quit

The crisis-hit Cordiant group is in line for a further heavy blow as its Bates UK subsidiary faces the likely defection of its multimillion-pound Sky TV account.

Industry sources say the business is likely to be consolidated within HHCL/Red Cell, which already handles creative work for Sky Plus, the broadcaster's personal video recorder.

It is understood that the switch will be completed in the next two or three weeks if remuneration terms can be agreed. HHCL was unavailable for comment and Sky had not returned calls by the time Campaign went to press.

The loss of the Sky creative account, said to be worth £40 million when it arrived at Bates in February 2001, would be the worst possible news for Cordiant, which faces break-up after the loss of £18 million worth of Allied Domecq business.

Cordiant insiders claim the Sky business is no more at risk than any other Bates account in these uncertain times for the holding company.

"Knowing other agencies are all over your clients is very unpleasant," a senior executive said. "The worry is that we won't have a business to sell unless we move very quickly."

Cordiant, whose bankers have agreed emergency funding to keep it going until 15 July, was this week sending out information packs to prospective bidders.

Publicis Groupe is said to be interested in 141, Cordiant's integrated marketing specialist. However, a deal could be complicated by the close links between 141 and Bates, which operate as a single agency in some markets.