2 December 2011 - 5:45pm | posted by | 1 comment

Analysis: MediaCom's acquisition of Brilliant Media

Analysis: MediaCom's acquisition of Brilliant MediaAnalysis: MediaCom's acquisition of Brilliant Media

The takeover of Brilliant Media by WPP’s MediaCom has been lamented within the regions for being the last independent media buyer of significant clout to be taken over by a network company.

Brilliant Media, which opened in 1999, with offices in Birmingham, Leeds and Manchester, was taken over last night in a deal that sees it join the WPP stable, despite co-founder and group managing director Chris Broadbent’s best attempts to retain its independence.

Said one industry source close to the company; “It’s a real end of an era for regional media agencies, but the industry has changed so much and these independent agencies are now finding that they need the clout of London and a network to attract big business.

“Chris will be hurting today as he wanted to maintain the independence of the agency at all cost, but this deal probably had to be done to save jobs before Christmas and it was the best deal available.”

They continued; “However, this is a good move for the agency, and they will suit working with MediaCom North as culturally it will be a good fit.”

Certainly, the statement released by MediaCom this morning (Friday 2 December) offered little insight on the deal other than to confirm its conclusion, but it is certain that MediaCom will have recieved a much better deal than it would have a year ago for the company, when it worked with clients such as DFS (who's £92m media contract went to MediaCom) and Asda. Following this, in April, nine of the company's 11 directors stepped down from the board.

At the time Broadbent told The Drum: “The business is viable. It was profitable. It is still profitable. We are still expected to turnover £90m this year. And although we have had to cut out cost – losing around 12 members of the team – we still employ 100 people.

“DFS and ASDA did not represent billings of £100m. In fact DFS only spent £30m and the margin was small as you can imagine, and ASDA only spent £7m with us last year. Losing these accounts was a blow, but not the end of the world," he added.

In June, while speaking to The Drum once again, Broadbent explained: "Our gross profit has only come down relatively slightly. Obviously our turnover has come down hugely and that’s the headline everyone looks at. But if I said that we were going to be more profitable this year, on a reduced turnover model, with fewer people doing more good work, then we could potentially be a better business for it."

Speculation as to the deal itself has also surfaced, with some believing that the agency has been taken over rather than bought by MediaCom, while questions are also being asked about Brilliant Manchester and MediaCom North, which are both based in the same city.

It is thought that a move, similar to the recent merging of the Manchester offices of Aegis media buyer Feather Brooksbank with Carat could take place.

A media analyst commented:"It is hard to see why MediaCom would make a strategic decision to buy Brilliant on normalised pricing metrics as it is not as though they brought something unique to them, while WPP has also recently been focussed elsewhere, so it certainly looks like an opportune purchase rather than a strategically driven one."

Neither Broadbent, of MediaCom North MD Paul Wheeler had replied to The Drum approaches for more information at the time of writing.

Comments

6 Dec 2011 - 18:38
rjp2006's picture

Brilliant Media may off been bought but it is off the back of it going into administration with little or no hope of any creditors seeing any cash. This should not be sold as an acquisition but a piece of opportune business by WPP. Shameless with a lot of good business being left significantly out of pocket.

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