Interpublic to break up sport unit in further cost cutting

NEW YORK - In a new cost-cutting measure, the Interpublic Group is to disband its Sports & Entertainment Group, which includes Octagon Motor Sports, after only a year.

The closing of the unit follows the news that Mark Dowley, who served as chairman and chief executive of the Sports & Entertainment Group in New York since it was launched in June 2002, is to resign. Dowley is leaving to join talent agency Endeavor.

The break-up of the one-year-old unit would see the businesses within it, which also include celebrity PR firm PMK/HBH, representing the likes of Drew Barrymore and Ben Affleck; and event-marketing agency Jack Morton Worldwide, report in to different parts of Interpublic.

The closing of the division will likely save around $5m (£3m), according to reports. A spokesman for Interpublic, said: "An announcement will be forthcoming."

According to a report in the Wall Street Journal, the loss of Dowley might have further ramifications. The paper said that American Express is unhappy with his departure and could pull its account from Interpublic. The loss would be a blow to Interpublic, depriving it of $8m in revenues.

It would add to other recently losses that have seen it lose Coke Classic in the UK to Mother. It also faces several major reviews including the UK Bird's Eye account and the US media-buying business for Coca-Cola.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.