The knight who would be king

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Martin Sorrell's original business plan for WPP Group was very clear: no ad agencies.

When Sir Martin left his job as corporate finance director of Saatchi & Saatchi (where he was known as the third brother) in 1986 to build his own business, his carefully thought-out strategy was to pursue plain-vanilla below-the-line marketing services companies in such areas as direct marketing, promotions and incentives. His unglamorous vehicle: tiny, publicly traded Wire & Plastic Products, a manufacturer of grocery store shopping baskets.

Saatchi and Interpublic Group of Cos. even made small, friendly investments in the venture, confident there would be no conflict.

Fourteen years later, Sir Martin (he received a knighthood in Prime Minister Tony Blair's New Year's Honours List in January) now controls three of the ad world's biggest agency networks and helms the largest marketing communications company in the world. His rise from bean counter to industry visionary is a colorful and controversial tale.

For a while, Sir Martin loaded various small U.K. companies into his WPP shopping basket. Then an ad agency network that was underperforming financially caught his eye, and he changed WPP forever by buying J. Walter Thompson Co. in 1987 for $566 million in a hostile takeover. In typically Sorrellian style, Sir Martin quickly sold for $100 million a pricey Tokyo office building to help pay for the acquisition; no one else had realized JWT owned the property.

At the time, he was completely unknown in the U.S., where his name would be mispronounced for years as Sorr-ELL, rather than SORR-ell (most industry players refer to him simply as Martin).

Hostility grew against the Brit invasion of the U.S.-dominated ad industry by acquisition-minded WPP and Saatchi as both London-based companies issued new shares on the London Stock Exchange to fund their frequent deals.

When Sir Martin did his next mega-deal, the 1989 hostile takeover of Ogilvy & Mather Worldwide for $864 million, outraged former Chairman David Ogilvy scathingly called him an "odious little shit." Mr. Ogilvy, with a castle in France to keep up, soon went on the WPP payroll as honorary chairman, ending public criticism of his new boss.

After the stock market crash in 1987, publicly quoted companies such as WPP and Saatchi had to load up on debt to continue their acquisition binges. Recession hit and both companies edged toward bankruptcy in 1992. Sir Martin re-negotiated loans, swapped debt for equity and sold off U.S. agency Scali McCabe Sloves, gradually getting WPP back on a sound financial footing.

Since then, the WPP chief executive has stubbornly pursued his strategic vision with ever-growing clout. Alternatively cajoling and bullying, he pushed his reluctant agency networks into creating a global media buying group and, most recently, nudged Y&R into play because he wanted a third network.

He has been vilified by some as a hostile corporate raider motivated by a desire to boost his ego and personal bank account. But even critics are in awe of his spin control and negotiating tactics.

He eschews a company jet, but hops on the Concorde to cross the Atlantic the way other people hail taxis. Even during the dramatic finale this month of his Y&R negotiations he jetted from New York to London on a Saturday afternoon to attend a friend's Sunday wedding. He was back in Manhattan on Monday to close the Y&R deal.

Although he is based in London and keeps his watch on U.K. time, he is comfortable in the U.S., where he got his MBA at Harvard Business School.

On Valentine's Day, he turned 55.

Sir Martin privately made it clear that he wanted to buy Y&R. Publicly, however, he stated in his company's last annual report that WPP would "probably" buy "strategically important, small to medium-size businesses of up to $300 million in value."

The original business plan, it seems, remains open to interpretation.

Contributing: Scott Donaton.

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