BotW: Droga goes out on top; Holdco homogenisation; Vinyl's court case
Welcome to Best of the Week, written on Saturday morning in Evandale, Tasmania, after a massive week in Sydney. We ran Mumbrella360 at Carriageworks, and it was everything we hoped it would be. I can’t wait to start figuring out how we build it even bigger for the m360 15 year anniversary next year.
Today: David Droga goes out on top; WPP and Omnicom homogenise; and the Vinyl legal mess.
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There won’t be another Droga
There has not been a week where we’ve seen so many significant changes in creative agency leadership. David Droga from Accenture Song, Ben Coulson from Dentsu, Justin Graham from M&C Saatchi.
Most significant was David Droga’s announcement.
Adland’s diminished cultural and business relevance means that it will not be possible for another Australian to match Droga’s success. Certainly in terms of global creative awards, and also in business building, Droga is the Australian ad industry’s biggest export.
Having successfully built Droga5 in New York, he sold it twice - once to talent agency William Morris Endeavor then again to Accenture. One side effect of that second sale was that the Droga5 name finally made it into Australia when Accenture rebadged The Monkeys last year. The previous attempt ended up as a cautionary tale after Droga chose the wrong person, fading creative David Nobay, to lead the Australian launch.
For Droga, it is not necessarily the end of his career - he’s only in his 50s - but it does look like the beginning of the end. If he comes home to the palace he’s building in Tamarama, he’d likely make next year’s Australian Financial Review Rich List with what must be close to billionaire status. Droga will do more interesting things in the future, but I doubt they’ll involve starting another ad agency.
Meanwhile, critics of Ben Coulson might place him in the same camp as Nobay. Coulson has left Dentsu Creative after a period of not much more than 18 months as chief creative officer that has to be seen as a failure. It came after a similar short stint at Hero.
Dentsu had turned to Coulson as a greybeard after the less experienced Mandie van der Merwe and Avish Gordhan lasted only 11 months as joint chief creative officers. They departed for Saatchi & Saatchi.
The hope at Dentsu had been that Coulson - who also led creative teams at Clemenger and Y&R - would bring gravitas. Instead eyebrows raised about Coulson’s commitment to the role based on the amount of time he spent in the office.
Sometimes the hardest thing to do in a big, well-paid career is to know when it’s time for something else. Hats off to David Droga for leaving from the top.
Vinyl’s Girgis saga
Vinyl Group doesn’t really do quiet weeks.
For a relatively small company, the publisher and music platform runs an eventful business.
This week, new detail of Vinyl Group’s legal battle with former Brag Media boss Luke Girgis reached the public domain; it appointed a new editor of Mediaweek; and had trading in its shares suspended by the ASX because of problems over director disclosures.
Most anticipated was Vinyl Group’s filed defence to legal action kicked off by Girgis who alleges that he was wrongly dismissed and should be entitled to a $2m performance payment.
A key function of Australia’s civil courts is to test conflicting claims and decide what’s true. The Supreme Court of NSW will have its work cut out in this case, as the claims certainly do conflict.
Girgis and business partner Sam Benjamin completed the sale of Brag Media to the company now called Vinyl Group at the end of January 2024. The price was $7.9m. But Girgis was suspended by the April and fired in early June 2024.
When the sale took place, the plan had been for Girgis to go on running the publishing business. If things went well, and he achieved profit of at least $12.8m on revenue of at least $15m, he would be entitled to that $2m.
Vinyl later disclosed to the ASX that in the first five months after the deal, Brag Media had revenue of $3.3m and made a loss after tax of $1.4m.
Girgis argues he was fired without cause. Vinyl said he misbehaved both before and after the sale.
A big claim made by Vinyl Group relates to Girgis’s behaviour some time before he agreed in December 2023 to selling the business. It alleges that in 2022, when Girgis was still an owner, he made “sham transactions” so that it appeared he was receiving a $440,000 salary. He allegedly did this to convince NAB to give him a home loan.
There is no explanation in the filing of what damage, if any, was later caused to Vinyl Group by this alleged behaviour. That will presumably be tested in court if the case is not settled first.
The filing also alleges the Girgis failed to disclose conflicts of interest arising from his continued ownership of the relatively small talent agency Be Like Children. One of the four clients currently listed is Poppy Reid, who worked for the publishing house until September last year.
The claim suggests that a $10,560 payment for work done for streaming service Stan by Reid should have gone to Vinyl Group rather than through Girgis’s agency.
The filing also suggests that the Vinyl Group email list was used to send out a series of email promotions on behalf of food service Providoor, owned by his former partner in Brag Media, Sam Benjamin. Girgis is now the CEO of Providoor.
Another issue raised in the document is that before the sale, Vinyl says Girgis gave a $90,000 job to his sister.
The filing also suggests that Girgis had disparaged Vinyl Group CEO Josh Simons to other staff, saying the board was losing confidence in him.
It will, of course, be for the court to decide the truth of these claims in the coming weeks.
Another ASX speeding ticket for Vinyl
Meanwhile, since Thursday morning, it’s been impossible to buy or sell shares in Vinyl Group, after the company went into a trading halt. It would appear that the company has once again fallen foul of ASX rules over the disclosure of share transactions involving its directors.
A fortnight ago, Vinyl Group was ticked off over the late disclosure that director Stephen Gleddon had sold all his shares in the company. Vinyl then filed an additional update saying that director Ben Katovsky’s spouse had sold more than half of their shares.
Last night, the company simultaneously published two further updates. It said that director Robert Gaunt had sold 2m of his 22m shares this week. And it said that the reason for the trading halt was that “due to an administrative oversight”, the market had not been told about new shares that had been issued.
It did not make clear which shares it was referring to, although earlier in the month, the company said major shareholder Richard White had agreed to turn his convertible note (a form of loan) into shares.
Simons has previously said that the business will be profitable by the end of this year. With exactly seven months to go it will be fascinating to watch.
Holdcos become the brands
We took a couple more steps along the path of holdco homogenisation this week.
WPP confirmed that its media agencies brand GroupM will be no more, replaced by WPP Media. It says that its individual media agency brands Mindshare, Wavemaker, and EssenceMediacom will continue, although it always says that before it merges and closes its agency brands.
And this morning, AdWeek broke the news that when the merger of Omnicom and IPG is completed, staff will switch to a unified email format of firstname.lastname@omc.com regardless of which agency they work for.
As adland commentator Cindy Gallop observed: “The cobbler's children have no shoes.”
More from Mumbrella…
Ageism in the advertising industry: ‘Hard to find people who’ve done anything’
‘Stupid marketing directors killed my best work’: Oatly creative chief’s subversive message
Redundancies hit Linkedin News as part of global Microsoft cuts
Unmade Index finishes flat
The Unmade Index had a flat finish to the week, closing on 563 points, down just 0.05% on Thursday.
ARN Media and Southern Cross Austereo have swapped places once again. ARN Media grew by 1.9% to a market capitalisation of $166m, while Southern Cross Austereo faded by 0.7% to $162m.
Time to leave you to your Saturday.
If you’d like a little more, check out the latest episode of MediaLand from ABC Radio National on your favourite podcatcher. We discussed the Google class action, Netflix’s decision to join OzTAM, star salaries and why the commercial networks have stopped spending on drama.
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher - Unmade + Mumbrella
tim@unmade.media
