True North Communications has set up a committee with sweeping powers to
resolve the festering dispute with its European partner, Publicis.
True North’s members are understood to be angry about how little room
for manoeuvre they have to change the way the alliance is structured in
the company’s key European market. And they blame True North’s senior
management for the problem.
Maurice Levy, the Publicis group chairman, has made it clear that the
Paris-based network will realise its global ambitions with or without
True North’s help.
Speculation is also mounting that Publicis wants to build on its
relationship with M&C Saatchi, with which it services the pounds 60
million global British Airways account, to share other major clients.
It is believed that the establishment of the committee will remove the
need for Levy to have direct dealings with his True North counterpart,
Bruce Mason. The two men have scarcely disguised their dislike of each
Levy declined to comment on the True North move.
The global alliance between True North, the Foote Cone Belding holding
company, and Publicis formally ended after seven years on 1 March.
Both parties are continuing to co-operate while they try to renegotiate
their relationship. However, they are free to buy other agencies or
create new ones.
‘Everything is on the table for discussion and no option is being ruled
out,’ a True North senior manager in Chicago said. ‘The members of the
committee are well known to Levy and we hope they can unblock the log-
jam. What have we got to lose?’
However, senior Publicis sources see the establishment of the committee
as an act of desperation and are heavily critical of True North for what
they claim is a lack of international vision.
Publicis believes it has the upper hand because of its 51 per cent
shareholding in the Publicis-FCB Europe joint venture. The company is
registered in the Netherlands, where the law prohibits companies from
competing with a partnership they have a stake in without the agreement
of the other partner.
‘True North can’t make any move in Europe without our agreement,’ a
Publicis source said. ‘It’s trapped.’