In December 1994, the Saatchi board forced out Maurice, the company's chairman; Charles, whose role was creative, left soon after. The brothers then formed a new agency—the New Saatchi Agency, then M&C Saatchi—and took with them some of Saatchi & Saatchi's cornerstone clients, including British Airways.
Industry observers trace the feud between the Saatchis and the board to the brothers' ambitious growth plans carried out through the 1970s and '80s, beginning with the 1976 purchase of Compton Partners, London.
In 1986, at the height of the agency's acquisition quest, Saatchi & Saatchi bought New York-based Ted Bates Worldwide for $450 million in cash. The size and scope of the deal was astronomical for its day, and in the end it proved unworkable.
The 1994 split between the Saatchi brothers and the board had severe repercussions for Bates. Outraged by the board's ouster of Maurice, Mars Inc. pulled $400 million of its business from Bates, which had handled the candy and pet food marketer's accounts for 40 years. In the fallout, Bates also lost Miller Brewing Co.'s $50 million Genuine Draft account and work for Colgate-Palmolive Co. Faced with those high-profile client defections, Bates laid off 150 employees. In all, Cordiant and its Bates unit lost $53.5 million in 1995, although Cordiant did return to profitability the following year.
In April 1997, Cordiant announced that it would "demerge" with Saatchi at the end of that year, splitting the business into two publicly traded entities: Bates, which would keep Cordiant Communications Group as its parent company, and Saatchi & Saatchi. Cordiant and Saatchi each walked away with half of Zenith Media in the deal. At the time, Zenith was the No. 1 media agency in the U.K., controlling $1.6 billion in media spending.
The demerger went starkly against the then-accelerating trend toward agency consolidations. Before the split, Cordiant had been the No. 6 advertising organization in the world; after the breakup, it ended 1997 as No. 14.
The move, however, allowed Bates to emerge from Saatchi's shadow and rebuild an identity of its own. Cordiant's new-business billings more than doubled in 1998, to $580 million from 1997's $250 million. New-business growth continued in 1999 and 2000, but not at the same pace. Bates gained approximately $180 million in new billings in 1999 and $190 million in 2000. Wella AG's haircare products and Pfizer were two new clients at Cordiant shops.
Account losses plagued the company as well. In 2002 alone, Cordiant lost $170 million in billings from Hyundai Motor America and $35 million in CVS drugstores billings; both marketers moved their accounts from Bates. In addition, Cordiant's Bates USA West unit lost the media portion of the Hyundai Motor America regional dealers' combined $200 million account.
In 2001, Cordiant had worldwide gross income of $1.17 billion, down 7% from the previous year, on billings of $13.38 billion, down 1.5%. Its chief properties included Bates Worldwide, the Hamburg-based Scholz & Friends and Healthworld. Also in 2001, Cordiant "traded" its 50% equity in Zenith Media Services for a 25% stake in the newly combined Zenith Optimedia Group and began to diversify with acquisitions in non-advertising companies, including two overseas PR firms.
In August 2003, WPP acquired Cordiant Communications Group, owner of Bates Worldwide and various marketing services companies. Later that month, WPP sold its 25% share of ZenithOptimedia to Publicis Groupe. It subsequently folded Bates into its other properties, and the agency and Cordiant ceased to exist.