The office, which recently lost two key accounts -- telecom Virgin Mobile and video-game maker Sega -- will be bought by the current management team of Wayne Buder, co-president and managing director, and Vince Engel, co-president and creative director.
Tim Delaney, Leagas Delaney's chairman, said his agency and its former San Francisco office will continue to work together on two joint clients, shoe maker Doc Martens and Nvidia, a software company that will be advertising for the first time. Mr. Engel said the buyout partners will keep their remaining regional accounts, including the Monterey Bay Aquarium.
New NYC team
In New York, a new team yet to be hired will work on several projects Mr. Delaney has won, including assignments for Italy's illycafe and Ferrero confectionery. Leagas Delaney also has offices in Rome, Paris and Hamburg in addition to London.
When he first entered the U.S. market in 1995, Mr. Delaney was torn between the East and West Coasts, settling in San Francisco because it was closer to his then-biggest international client, Adidas, in Portland, Ore. Since then, Leagas Delaney lost Adidas, was almost sold to Canadian holding company Envoy Communications Group for $86 million, and seen its first management team leave after the Envoy deal fell apart in 2001. In addition, other agencies, such as Lowe and Saatchi & Saatchi, have closed their San Francisco offices, confirming Mr. Delaney's belief that Leagas Delaney should really be in New York.
"There are about four or five things happening and they're all in New York," he said.
Initially the options were either to close the San Francisco office or sell it to local management. Perhaps fearing closure, the San Francisco management team filed suit in San Francisco Superior Court on June 26, alleging that Leagas Delaney Inc. and Mr. Delaney failed "to pay plaintiffs the severance compensation due and owing to each plaintiff." The suit said Messers. Buder and Engel and Ken Kula, another executive, were due six months of their base salaries, or not less than $600,000.
On July 3, soon after Mr. Delaney learned of the filing, the trio's lawyer asked the court to withdraw the suit. "The boys said it was a defensive thing," Mr. Delaney said from London last week.
The lawyer, Michael Welch, told AdAge.com that the lawsuit "was inadvertently filed prematurely due to a miscommunication."