When one of your company’s top men takes what is described as “an extended vacation” in the middle of an external audit, few believe he is simply taking a few weeks off in the sun.
The leave of absence by Michael Kassan, president of Western’s North American operations and vice-chairman of the worldwide company Western Initiative Media, has been greeted with widespread cynicism.
Most observers believe that Kassan has been permanently ousted from Western by his boss, Larry Lamattina, and what remains is the wrangling over his exit terms.
Last week, reports from the US said that Western’s parent, the InterPublic Group (IPG), was conducting a financial review of Western Initiative Media Worldwide while Kassan had left earlier in the month for a holiday.
His office in California said he could not be reached for comment. Lamattina was also unavailable for comment. Some senior media sources suggest that the audit, which is being carried out by Pricewaterhouse Coopers, revolves around Western’s loss of its Honda buying business.
One observer suggests that Lamattina is “clearing the decks” at the US operation prior to the &£440m Unilever media review, which is expected before the end of the year. In the US, the bulk of the Unilever account is handled by an independent media agency called Botway, which Western Initiative has been looking to buy to pre-empt a review and block off any attempt by WPP to win the business. With this at stake, Western must be able to give absolute reassurance about its financial position.
The forthcoming US review is one of the biggest battles facing Initiative and WPP, which are locked in a global battle for a larger slice of Unilever’s &£3bn media spend.
In Latin America and Asia, WPP’s MindShare has the whip hand, with the position reversed in Europe where Initiative holds sway. But last week MindShare triumphed over Initiative in Germany and it has recently won Unilever’s media centralisation in China.
At the end of last year ex-Lintas media chief Lamattina was brought in from running IPG’s TV company, EC Television, to merge two of IPG’s three global media brands: Western International and Initiative Media. The third brand Universal McCann remains separate.
Kassan’s wish to report directly to IPG chairman Phil Geier was thwarted by the arrival of Lamattina. Kassan, who was formerly Western founder Dennis Holt’s lawyer, joined the company as chief operating officer in 1994 and later that year engineered its sale to IPG.
Western is one of the biggest media specialists in the US, but elsewhere its network is patchy, while Initiative is huge in Europe and does not have a presence in the US, which makes the merger a perfect geographic fit. The new company will have billings of more than &£6.3bn and 75 offices in 35 countries.
However, the two companies are having trouble merging. One insider says: “There’s a belief that the European media company is great and the American one needs work.”
A former employee says that Initiative and Western are polar opposites in culture and business practice, and that the merger is riven with politics. Western was built by offering media buying to creative agencies without media resources. It has a more diverse client list and fewer blue chip clients than Initiative.
According to US reports, some Initiative staff are concerned that their brand name will be lost when Western Initiative Media becomes Western. One senior IPG executive says: “If there is any justice then the Initiative name will be used because that is by far the better brand.”
So far Ammirati Puris Lintas has refused to give up its media planning to the newly-joined Western Initiative Media. In the notoriously conservative US media and advertising market, structural development is slow. The proposed global merger of Leo Burnett’s media operation with MediaVest, part of MacManus, foundered because the will to make it succeed in the US did not exist. WPP chief executive Martin Sorrell has so far failed to establish MindShare in the US either, because the management of J Walter Thompson and Ogilvy & Mather have refused to let go of their agencies’ media operations.
Kassan’s successor will be decided by Lamattina and IPG boss Phil Geier. Most believe his departure will not affect Marie-Jose Forissier, chairman of Initiative Media Worldwide and Kassan’s opposite number as vice-chairman of the merged company.
One senior IPG executive says: “I can’t see a European being brought in to run a US media agency. Geier and Lamattina will look for an American. Firstly, out of jingoism. And secondly, because they know to give it to Forissier will frustrate senior Americans in the company who have designs on that job and may leave.”
One former colleague of Kassan describes him as a flashy character who “people could run out of patience with”. He adds: “He is the sort of person with 18 mobile phones and private jets everywhere. Somewhere he has overstepped the mark. This is a hugely political situation, and it looks like Kassan is a casualty, either through his own dealings or not.”
If Kassan has gone, Lamattina’s task will be to quickly find a successor to bring rectitude to the US half of the media company, and prepare it for the next round of Unilever reviews.