Fallon McElligott: Long Shot In $140-Million Olds Review

DETROIT – Executives at WPP Group agencies, and those familiar with the $140-million Oldsmobile review, were puzzled last week as to why WPP Group’s Fallon McElligott, was still a contender in the General Motors review, given WPP’s ties to Ford Motor Co.
Sources last week confirmed that Fallon, which, along with a dozen or so other shops, met with Olds representatives last fall, has not officially been removed from contention for the Olds business. But a WPP spokesperson said, ‘While the company has no knowledge that Fallon is a contender for Olds, it would not be possible from the holding company’s standpoint (for the Minneapolis-based Fallon) to work for a GM division.’ That is because the account would violate Ford’s conflict-of interest policy.
A source said last week that Fallon is still alive in the review because of the Olds selection committee’s affection toward the agency’s creative work, and its chairman Pat Fallon. But, the source added, the shop is seen as less than a longshot to unseat incumbent Leo Burnett because of the selection committee’s view that it is too small to handle the Olds business.
Ironically, though, WPP is known to have been in extended negotiations since last year to sell Fallon’s parent agency, Scali, McCabe, Sloves, to Interpublic Group. IPG’s agencies work for General Motors globally. Fallon’s presence in the review takes on greater intrigue given Olds’ apparent affection for the agency’s work, because executives who know Fallon said that while they do not believe Fallon would leave its parent agency under WPP – Scali, McCabe, Sloves – there is nothing contractually preventing him from leaving to pursue the business if Olds really wanted his agency.
Neither Fallon, nor SMS chairman Marvin Sloves would comment.
Talks between WPP and IPG over the sale of Scali broke off when Fallon and IPG’s Lowe & Partners became contenders in the Olds review last October. Agency executives with knowledge of the negotiations said last week that Lowe had recently been removed from consideration by Olds, and speculated that, given Fallon’s status in the review, the only thing preventing the two sides from resuming was a standing difference over price. WPP chief executive officer Martin Sorrell reportedly has been asking for more money than IPG wants to pay.
But executives with knowledge of the negotiations said now that IPG is out of the Olds review, there was a good chance for the deal to finally get done. One source said last week that the gap between Sorrell’s asking price and what IPG expects to pay has narrowed, and that meetings between the WPP ceo and IPG executives were scheduled for early next month.
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