Earlier this month, holding company MDC Partners announced that now-former CEO Miles Nadal had agreed to repay an additional $21 million on top of the $8.6 million he had already pledged in the wake of an ongoing SEC investigation into his personal finances.
One fact that was somewhat lost in the ensuing conversation: the company also agreed to buy the 49 percent of 72andSunny that it did not already own.
MDC acquired the agency in December 2010, when Nadal said “the talent [there] is as good as we have ever seen.” At the time, the company did not define the “majority interest” it had purchased, but we later learned that the number was 51 percent.
Now the relationship between the two entities has been fully consummated.
72andSunny partner, chief strategy officer and longtime Deutsch veteran Matt Jarvis writes:
“MDC has been a great partner to 72andSunny and this agreement is an example. Their contractual guarantees of autonomy, entrepreneurship and investments into our company are uncommon if not unheard of. We are excited about the opportunities it unlocks, and our future together.”
MDC Partners had no comment on the move, which is already official. But sources tell us that such relationships regularly “evolve”; for example, in 2007 MDC extended its stake in the Crispin organization from 49 percent to 77 percent. Those numbers vary across the holding company, but MDC does not own the entirety of most of its partner organizations.
We also hear that the relationship that the two parties have sustained over the past four-plus years will not change, hence Jarvis’s quote regarding “contractual guarantees of autonomy.”
Given MDC’s ongoing financial concerns and recent changes at CP+B, however, we expect at the very least to see a renewed focus on efficiency and ROI at 72andSunny.