Nick Grouf will no longer hold the president title at Spot Runner, the agency announced today. Grouf is succeeded by John Gentry, who was previously the chief revenue officer.
New Boss
The story hit the wires today but painted an unclear picture of what Grouf will do now that he’s relegated to the Chairman/CEO spot. But according to a release, “[Gentry] will assume increased day-to-day responsibilities for managing the company and report directly to Nick Grouf, chairman and CEO. He will also lead the Marketing Services Group, which includes both the National and Local divisions.”
But sources tell us that Gentry, while much better on paper than Grouf these days, is not a vast improvement. “This is the guy who was buying new boats while dozens of employees were getting laid off,” says a source close to the matter.
Double Trouble
Most recently Spot Runner got itself in a boat load of trouble over an alleged securities fraud suit led by a major financial backer, WPP. The suit “names Spot Runner CEO Nick Grouf and co-founder David Waxman, as well as investors like Pilot Group’s Bob Pittman, Index Ventures’ Danny Rimer and Battery Ventures’ Roger Lee. Peter Huie, Spot Runner’s general counsel, was also targeted too.”
And this news comes less than a year after the agency laid off 50 staffers. ValleyWag‘s Owen Thomas made the point that “it’s hard to imagine a business less efficient than one which loses $5 for every $1 it makes.” That remark was made in reference to SR’s financial reports from the last two years: “Spot Runner took in $5 million in revenues in 2007 and lost $35 million. 2008 was hardly an improvement: The company took in $9 million and lost $45 million,” wrote Thomas.
In House
“Aside from a few key people, the entire Creative Services department has been let go,” said the source. “While some have stayed on as freelancers for a day here and there, they were approached by management with a deal: for every week of work we promise you, we get a day free…They were part of the layoffs a few months ago but were given two months notice.”
Not exactly a good set of issues to be handed on your first day as boss. We contacted the agency for comment, but a representative did not respond by the time this story was published.