The multicultural network Commonground/MGS, formed last year, has shuttered amid financial issues. But rising from the ashes will be a new agency in Chicago.
The agency will be launched by Ahmad Islam and Sherman wright, co-founders of Commonground, a Chicago-based African-American and multicultural agency founded in 2004 that was one of Ad Age's Small Agency winners and has counted MillerCoors, Verizon, HBO, Bayer and American Family Insurance among its clients.
"We are no longer affiliated with the entity known as Commonground/MGS. We are moving forward as a new agency based in Chicago focused on getting back to business with our clients," said Mr. Islam in a statement to Ad Age. He declined to say what the agency will be named -- though it's clear they will no longer use the name Commonground -- or what clients will be involved, but at least one client will be a former Commonground client.
Pete Marino, chief public affairs and communications officer at MillerCoors, said the marketer continues to work with the shop and is not affected by the changes
Details about the demise of Commonground/MGS remain somewhat scant, but financial trouble brewed recently, and according to a memo sent last week to employees by PCH Communications, the entity backing Commonground/MGS, a senior lending bank had frozen PCH's accounts.
"As many of you may be aware, the agency has been dealing with financial challenges. Over the last several weeks, we have been carrying out good faith negotiations with our senior lender to attempt to obtain relief from these challenges and we believed we were close to an acceptable resolution with the lender," said the memo. "To our surprise and dismay, however, the lender took hostile actions against CGMGS and froze our bank accounts earlier this week."
It's not immediately clear why, but the memo also said that, effective Dec. 5, employment for everyone would be terminated. "While the Worker Adjustment and Retraining Act of 1988 may require advance notice of your permanent layoff, the unforeseeable circumstances of the lender's actions and our faltering business circumstances that necessitated our good faith efforts to actively secure capital to prevent closing the Agency, did not afford us an opportunity to provide such advance notice," said the memo.
Commonground/MGS formed in fall 2014 and was backed by private equity firm PCH Communications. It served as an umbrella for Commonground, the Vidal Partnership, Sway Public Relations, MGSCOMM and others, creating what its partners called a wholly minority-owned network. Coinciding with formation of the network, three of the ventures -- Commonground Marketing, MGSCOMM and Vidal Partnership -- merged to form the agency Commonground/MGS. The move united all the agencies involved, forming a 300-person entity with offices in New York, Chicago, Houston, Los Angeles and Miami.
It wasn't clear what the other agencies from Commonground/MGS will do next, or whether they will continue to work with clients they had previously handled.