Toronto-based MDC Partners announced today it has taken majority ownership of the firm, increasing its share from 49% to 77%. "This deal will allow us to continue to do what we do best," Chuck Porter, chairman of Crispin Porter, said in a statement. "We will continue to make all decisions together on what is best for CP&B," the statement went on to say.
Contrary to speculation
The news appears to stomp out widespread industry speculation that Crispin was looking to buy out of MDC. The holding company has had the option to increase its share in the agency for the last two years, but has deferred. That fact prompted speculation over whether it was trying to avoid provoking the star performer in its growing stable of advertising, specialized communications and consulting services companies. But a buyback was something Mr. Porter categorically denied to Advertising Age as recently as October.
"We are not contemplating buying ourselves back from MDC," Mr. Porter said then. "They've always been agreeable to us keeping as much equity in the agency as we want for as long as we want."
Today, MDC Chairman-CEO Miles Nadal was equally dismissive. The announcement, he said, will change nothing between his holding company and Crispin. "People have read into something that has been out there for three years," he said. "This is not new. If [Crispin's top executives] weren't fully supportive of it, we would not have increased the stake."
Struggling to compete
As desirable as Crispin is -- with an account roster that includes Volkswagen, Burger King, Nike and Domino's Pizza -- MDC has still struggled to compete with its much-larger holding-company rivals. MDC's relative small size (its cumulative revenue was approximately $424.6 million in 2006) may be the key to its appeal to Crispin, which expressed admiration for MDC's know-how of working within the creative process.
"They have always understood the mixture of art and commerce that makes a place like CP&B run," Alex Bogusky, chief creative officer, said in a statement.
Mr. Nadal has consistently allowed his partner companies to maintain control of their operations and remain involved in finances. Mr. Nadal said the hands-off interaction with Crispin won't change anytime soon. "We are thrilled and proud to delegate all that," he said, referring to creative day-to-day duties. "We would have no value to add there."