A step change for Wright, Isaac, Bird and Taylor.“So, it’s the end of an era,” I said, over a ham and pineapple pizza, seconds after learning of the resignation of Yellow M Scotland’s four-strong management team.
“No, it’s the end of an error,” replied former Yellow M joint creative boss David Isaac. It was the kind of pun that all creatives love and many build their careers upon. Indeed, he had delivered the line with a wry smile of satisfaction across his face, but the pun reflected just how close Isaac, his creative partner Kevin Bird, managing director Ian Wright and client services director Jill Taylor felt they had actually come to making a big mistake.
News that the anticipated MBO of Yellow M Scotland from its founder and chief executive, Mike Dethick, spread like wildfire and even as Wright and his two creative directors outlined their reasons for pulling out of the MBO a message of support from another ad agency boss bleeped into his bright blue Nokia.
In hindsight, according to Wright, the MBO was fatally flawed from the very start. Financial figures supplied by Dethick, who put the Newcastle-based branch of Yellow M into receivership last month, were inaccurate and hid a multitude of sins, thus not enabling Wright, Isaac, Bird and Taylor to come to a realistic price for the agency. Then, as more hidden costs and liabilities began to be uncovered, the nostrils of advisors to the MBO team, Deloite & Touche and Henderson Boyd Jackson, began to detect a significantly sized rodent and advised them to get out of the deal before it was too late and more money was lost.
Fast forward a week and I am sitting in a chair in the serviced offices, on Canning Street in Edinburgh, of Wright, Taylor, Isaac and Bird’s new advertising agency, family, which was launched within three days of figuring out that the Yellow M buyout was dead in the water.
Wright admits that there remains a lot of bad feeling towards Dethick and the manner in which he has handled the MBO fiasco over the last three months.
“Yellow M has now been put into receivership, which was the obvious thing to do. I still feel very bitter about what happened in terms of how the directors acted. We were never directors of Yellow M and we are gutted at what happened. We are gutted that 13 very good people have lost their jobs through no fault of their own or ours. We have taken on a couple of people and others have found jobs but, as we all know, on the recruitment front it is pretty hard out there at the moment.”
By proposing the MBO Wright and his team were effectively offering Dethick an escape route from the significant debts to suppliers amassed by the finance department, which was based within Dethick’s grasp in Newcastle. Surprisingly, it was an offer he did not tear their hands off for.
“We worked so hard over the last three months on the MBO and we would have been working for two years just to pay off every supplier,” said Bird. “But we thought it would be worth it to keep Yellow M going and keep everyone together. Opening this place was forced upon us, but the great thing about it is that it is a fresh start for us. We have taken the best of what we brought to Yellow M and will add to that. The best thing is that there is nobody in the background who can undermine it.”
The ill feeling towards Dethick is almost visible, but Wright will not be drawn on exactly how much money the four are out of pocket due to the failed MBO.
He says: “I cannot really comment on the situation as there are huge legal issues involved. We are obviously going to invest some money to try and recover some of the costs involved with the failed MBO, but we do not really want to spend lots of money chasing Mike only to get nothing out of it. In effect we in Edinburgh were were supporting ourselves and Newcastle.
“Mike has avoided us since the MBO negotiations began. He even had the cheek to call the day we handed in our resignations to ask if he should come up to Edinburgh to try and placate the staff. He was advised not to.”
The closure of Yellow M came as a shock, particularly as the industry was anticipating a bright future for it under the direct guidance of Wright and co. However, the closure of the agency and the news of the new launch was greeted by all round support by clients and agencies.
“We have so far taken on some of Yellow M’s clients, but not all of them,” said Wright. “The Dunfermline Building Society, Vida, Indigo Vision, Scottish Widows and Burns Stewart have come with us. The Scottish Executive and Scottish Enterprise have not come with us and I am not sure what they plan to do with their business. We are still talking to some clients who have not decided to come with us and talking about how we can move forward with them. The new business red phone is ringing red-hot at the moment. We have had four credentials presentations since officially starting up last Wednesday.”
Taylor adds: “Several agencies have phoned us to say if we need rooms, faxes, phones or whatever just to let them know. The support has been fantastic. Some agencies have obviously been calling us and then calling our clients to offer their services. You certainly find out who your friends are at times like these. I suppose you can’t blame them.”
Wright predicts a tough time ahead for the Scottish ad industry. With Yellow M’s and McCann-Erickson demise and the prospect of Scotland losing the Royal Bank of Scotland account it seems that the job cuts which hit London so hard last year are now being visited upon Scotland.
So, is it really such a good time to try and establish a brand new ad agency?
Taylor believes so: “This is a good time for us to do this as it is a pretty busy period, which has obviously helped us on the revenue front. We were getting worn down by the Yellow M thing. The burden that we have all had lifted is immense. We are now able to concentrate fully on what we are good at, which, during the three months of negotiations for the MBO, we were not. Now we can deal with people properly and pay suppliers correctly, which is really important to us.
“We have got a full work structure. We can do the same things for clients that we did before at Yellow M. It is just that as yet we do not have a dedicated studio or production department. Already we have sent out 70 ads since last Wednesday and are developing new campaigns all the time.”