Grey L.A. Faces Uncertain Future

LOS ANGELES Grey could shutter its 15-person operation here at the end of March when its current lease runs out, sources said.

A representative at Grey’s headquarters in New York emphatically denied that the Los Angeles office was closing, but said no new location has been chosen for those L.A. staffers. The rep also said the employees remaining in the present office could be moved to one of WPP’s other offices, such as Grey’s direct arm in Burbank, Calif., but that had not been finalized.

A source, speaking on terms of anonymity, insisted the office would close even if a few staffers were moved to another Grey outpost.

The Grey rep added that operations here will now be under the supervision of Betsy Sperry, managing director of the shop’s 135-person San Francisco office.

John Crosson, Grey L.A.s’ last president, retired in May. Sources said the agency has interviewed several candidates to replace Crosson in the interim period, but none had been chosen, and that search has concluded with Sperry’s appointment.

Sperry could not be reached for comment, but the Grey rep said her appointment is “in recognition of the outstanding job she’s done. We remain committed to continuing our presence in Los Angeles, serving such premier clients as BMW, Roman Meal and the [California] Energy Efficiency Partnership.”

The move leaves the status of Grey L.A.s’ $30 million BMW Western Region account, the lion’s share of its billings, as well as its evp, executive creative director Bob Merlotti, in question, as there is some doubt either would be willing to make the transition to San Francisco, sources said.

“We are evaluating the changes in Grey’s management,” said Karen Vonder Meulen, BMW’s manager of marketing and events communications, Westwood, N.J. “And once they have a proposal, we will be able to determine how it will affect the BMW business.” She declined to say if a review or account shift would be considered.

Asked if he would move to San Francisco, Merlotti quipped, “We were hoping for a merger with our Tijuana office.” He declined further comment on the situation.

Apart from BMW, Grey L.A.’s only other accounts are the California Energy Efficiency Partnership and Roman Meal, which spend a combined $2-3 million annually on ads, per Nielsen Monitor-Plus.

Coming to Los Angeles with an award-winning reel from DDB in Chicago, including leading Bud Light and McDonald’s, Merlotti arrived at the Grey in 2002 as part of Crosson’s long-term plan to build the agency’s talent pool in order to win a car account. Of the team that won BMW, only Melissa Webber, creative director, and Duccio Brandonisio, account supervisor, remain. Webber would not comment on the current situation; Brandonisio could not be reached.

In San Francisco, Grey’s executive creative directors are Jeff Shattuck and Kevin McCarthy.

The Los Angeles office won the BMW Western Region business after a review that concluded in December 2003. In May, after Crosson left the agency, Grey Worldwide CEO Ed Meyer said there was no plan to merge Grey into another entity. “BMW, the largest client in that office, is very confident in Grey L.A.’s ability to continue to do great work for them,” Meyer said at that time.

Separately, Grey’s New York headquarters cut about 50 employees (7 percent of its staff) earlier this week in a move it said was designed to pave the way for a major reorganization to be unveiled next week by global CEO Jim Heekin [Adweek Online, Jan. 18].