The Prom King, CEO Clayton Ruebensaal III, and his shop Cliff Freeman have severed ties from MDC Partners. CF has had some trouble as of late including rounds of lay-offs, rounds of loses and general mayhem on the upper decks of management.
MDC has returned its 20% equity stake in the shop, which means the Prom King is on his own without that cushion of cash. Scary times. Cliff Freeman said in a statement: “I’ve always believed in the power of the CFP brand. I was granted an opportunity to buy it back and, committed to the best interest of the agency and our clients, opted to do so wholeheartedly.”
Normally, MDC will increase its stake in companies it invests in, but over the four years of being the backers of Freeman, MDC never made a move leaving their interest at a stagnant 20%. MDC CFO David Doft said that his company controls “100% of the balance sheet,” so he couldn’t have been to happy with Cliff Freeman’s this past year or two. Maybe their recent Quiznos lose tipped MDC over the edge? Doft cited that nearly half – 45% – of MDC’s revenues now come from direct marketing or digital media services. Doft also said that MDC was moving from a relatively passive “holding company” model to more of an “operating company.”
Ah, so MDC is wants to get its hands dirtier. Be careful. Don’t you guys know that the more money you come by, the more trouble you’ll see?