After Harold
The ‘Harold rumour’ rarely goes away.
Last time round WPP was rumoured to be looking at buying Mitchell Communication Group. On another occasion one of the trade magazines hoaxed a rival into reporting that Telstra was the buyer.
This time, the rumour appears to have a great deal more substance. It looks like Aegis is set to purchase Mitchells.
It makes sense, not least for Aegis.
Carat and sister Aegis agency Vizeum have both struggled to make an impact, particularly in Sydney.
Just this week Carat lost NRMA to Mediacom, triggering some rather snide comments from Sydney boss Peter Barrie.
Assuming the deal is done, one interesting conversation will be that between Aegis boss Lee Stephens and Harold Mitchell. Stephens worked for Mitchell running digital arm eMitch, but eventually seeing his way to the top blocked by Harold’s son Stuart, moved on.
It certainly makes more sense than a WPP-acquisition which would have probably have hit regulatory problems as it already has a fair chunk of the market through its Group M agencies Mediacom, Maxus, Mindshare and Mediaedge CIA.
And I guess it makes sense for Mitchells.
The theme of the last couple of years has been the “What if…” over Mitchell’s future at the helm. It used to be “What if Harold dies?” but since he lost weight that has become “What if Harold retires?”
The speculation usually centred on Stuart’s interest or otherwise (and ability or otherwise) in taking the helm, which accelerated when he took time out. Few expected him to come back from his break, although he has. Others have speculated on a potential place at the top at Mitchells for former Mediacom boss Anne Parsons when her non-compete period expires.
If Aegis makes the purchase the debate will change . A lot of clients are there because of Harold Mitchell. No doubt he’d stay at first (it would seem sensible for that to be in the terms of the deal), but one day he wouldn’t be.
Much of the power of Mitchell the company comes from the power and influence of Mitchell the man. And that’s not necessarily been good for the industry as a whole – I suspect one reason the landscape is still more about buying then strategy is because of the company’s market strength.
Even if the plan is for Harold to remain as the man in charge, the reality will eventually be different – even if he gest a chunk of Aegis as part of the deal. There are very few examples where an agency founder has sold out and remained for years as a happy employee.
As soon as Mitchells was listed on the ASX, an acquisition always looked like a possibility.
It now looks like we will see some big changes on the Australian media buying landscape.
Tim Burrowes
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
Linkedin
I’m really interested to see where Lee Stephens ends up in all of this. Always thought he was one of the brightest agency bods around so hope he gets a hand on the reins.
User ID not verified.