Conflicting Accounts: The Creation and Crash of the Saatchi and Saatchi Advertising Empire
by By Goldman, Kevin
Category: Business & Economics , Advertising & Promotion

On December 16, 1994, a bloodletting took place in the stylish sixth-floor boardroom at Saatchi & Saatchi Company PLC, once the world's largest advertising agency holding company. Maurice Saatchi, the 48 year-old chairman who co-founded the company in 1970 with his older brother Charles, was fired by the board of directors under threat by the firm's largest shareholders. Less than a month later, Maurice started a rival ad agency and quickly snapped up former Saatchi & Saatchi clients, most importantly British Airways. Kevin Goldman, the former daily advertising columnist for the Wall Street Journal, spoke to everyone connected with this headline-making saga -- including Maurice Saatchi and his reclusive brother Charles -- and witnessed important business meetings, including Maurice Saatchi's winning pitch to British Airways. Goldman traces every step the Saatchi brothers took, from their youth as Iraqi Jewish immigrants in North London to their business merger in 1970, when, with little more than sheer audacity, the opened an ad agency with a full-page announcement ad in the London Sunday Times. Through bold and brash actions, the agency began an acquisitions binge, taking over many of the ad industry's giants -- including Ted Bates, Backer & Spielvogel, Dancer Fitzgerald Sample, and Garland-Compton -- to become the number one ad company in the world. But, once they acquired a company, the brothers lost interest, often refusing to meet with its executives again. This disdain would come back to haunt them. Also chronicled is the brothers' rich lifestyle, which critics claim was funded by the company. This tale features a rich cast of supporting players: Jeremy Sinclair, a creative advertising genius who was fiercely loyal to the brothers, was one of the executives who resigned after Maurice was fired. Bill Muirhead, another loyalist, was responsible for keeping clients happy. Robert Louis-Dreyfus, a globe-trotting native of France, was brought in by the Saatchis in 1989 when the company was teetering on the edge of bankruptcy. Louis-Dreyfus brought in Charles Scott, a self-described numbers cruncher uncomfortable with the glitzy world of advertising, to help sort out the company's complex finances. And leading the anti-Maurice movement was David Herro, a thirty-three-year-old American money manager whose group owned approximately 10 percent of Saatchi stock. Built into the Saatchi story is the bigger picture of the dramatic changes in advertising in the 1980s, such as the merger mania and ad agency consolidations that swept Madison Avenue, including the British takeover of major agencies. The story of the decline and crash of Saatchi & Saatchi is a universal tale of corporate greed and ineffective management. It is the story of an ugly, publicly fought civil war in an industry that is supposed to know the steep price paid for an image run amok.