Publicis Groupe ‘only owed’ $12.8 million from GM bankruptcy
July 22, 2009
Maybe now Publicis will be thrown off Creditwatch in light of the new reports. The amount that General Motors owes Publicis is far lower than initially stated, to the tune of less than 10% of what was initially mentioned in the media.
Publicis Groupe SA’s (OTC:PUBGY) damage from General Motors Corp.’s Chapter 11 filing won’t be as bad as
originally estimated. The Paris-based advertising agency now says it’s owed $12.8 million by GM following its bankruptcy. That’s a large decrease from numbers that floated around in June when GM said it owed Publicis and its media agency subsidiary Starcom MediaVest Group $148 million while the French company said at the time the number was closer to $78 million. TheDeal.Com is reporting
Interpublic : GM owes us $50 million not $15 million
June 5, 2009
Interpublic is launching a broadside against the bankruptcy documents provided by General Motors, that only listed about $15 million, earlier Interpublic was fighting for “top position of losses” with Publicis to see who lost the most with the GM bankruptcy stating that figure was around $150 million (10x the amount GM said it owes them).
Regardless, this bankruptcy is turning out to be an advertising agency nightmare as several firms are constantly re-adjusting how much their companies are owed.
The fact of the matter is that advertising agencies are sort of on the back burner in terms of priority, payroll and vendors that actually supply parts to build the cars will take the lead. Clearly the Obama administration feels that Advertising needs to be cut down for the car companies, as he cut the Chrysler advertising budget by half.
These advertising agencies are going to get paid fractions of the dollar, if that.
Enjoy the new reality, Government motors isn’t going to be the monster in advertising it was 5 years ago.
Publicis Groupe SA thrown on CreditWatch
June 4, 2009
Standard & Poor’s Ratings Services put its credit ratings on Publicis Groupe SA (PUBGY) on watch for downgrade, citing the French-based global advertising agency’s heavy exposure to General Motor Corp.’s (GMGMQ) bankruptcy filing.
We were the first to report on the bankruptcy filing will cause severe problems for the advertising agency to the tune of $150,000,000.
The fact that GM is now owned by the US Federal Government and now subjected to politics will most likely lead to a review with the “favored” advertising agency being US based. In practice that is illegal, in reality a few dozen calls to a few dozen senators will do the trick.
In my opinion, rule out anything with UK / Ireland based WPP group plc or France based Publicis ever seeing a dollar of the Government Motors advertising budget.
GM owes Publicis Groupe $150 Million
June 1, 2009
Publicis is owed a total of $146,825,783 from General Motors, and the bankruptcy documents clearly state 2 listings for Publicis, not just one.
$25,282,766 to Publicis Groupe Proper
$121,543,017 to Publicis Owned Starcom Mediavest
For a grand total of nearly $150,000,000 to Publicis alone..
Worth noting that Interpublic got nailed about 15 million in the documents as well, hit hard… but nothing like the monster that hit Publicis…
This is staggering amount listed under “Unsecured Creditors” and questions immediately were raised if Publicis will have to write off a good part of that. The Obama Administration cut the Chrysler advertising agency budget in half, we suspect in the case of General Motors “half” would be best case.
Click to enlarge the documents…
This is a problem for Publicis, a big problem. If you want to read the whole bankruptcy document, B|Net posted it.
GM notifies ad agencies they’re out of business
May 15, 2009
GM has notified GM notifies 1,100 dealers they’re out of business. This will run havoc throughout the advertising agency world as many smaller and mid sized agencies depend on the dealerships for direct mailings, billboards, flyers… etc etc.. … just overall advertising for each local market.
These dealers are now facing a complete shut down, and because of this many will most likely fail if they cannot substitute it with a Honda, Toyota, Kia or whatever. In other words, the chances are not just the dealers will go under, but a whole bunch of advertising agencies as well.
The auto industry spends massive amounts of money on Advertising, for example, in the Chrysler bankruptcy document they listed BBDO / Omnicom Group as their second largest creditor. This is high and above any other firms that helped with R&D, car parts, etc etc..
Spectacular fireworks people, this is going to get ugly.
TREASURY TELLS GM TO PREP FOR BANKRUPTCY
April 12, 2009
Drudgereport has a note that the Treasure Department has told the General Motors Corporation to prepare for bankruptcy, there is no more funds coming to the company….
Story is developing, but the most educated guess is that General Motors isn’t going to be getting any more bailout cash, and it’s pretty much game over for the company. Bankruptcy will put virtually all the financial decisions on the bankruptcy judge. Non-essential things that don’t relate to the cost of steel, payroll and power bills most likely will not get paid… a prime example will be whatever dollars they were spending with their advertising agency thrown out the window… and it’s unknown if the advertising agency will.
Chances are this will send one hell of a nasty run though all the auto suppliers and any industry that touches general motors… this is going to get ugly… fast..
Fight breaks out over GM Recession
March 30, 2009
Tempers and fist fights at a GM dealership, closing its doors Friday. The anger of losing their jobs boiled over into at least two fist fights at the lot… threatening reporters. This is what America is starting to look like due to this recession. The words “foreclosed” and “losing my job” were repeated several times.
It’s ugly out there… really ugly..
GM to choose one ad agency or none at all
December 13, 2008
Ok this is bad, really bad. It appears that GM is going to be cutting out at least 600 million dollars from it’s ad budget according to it’s tin cup bailout request in Washington. This means some agencies are in for a bad day, a real bad day. I wouldn’t want to be working on car account right now.
600 million is a massive ad cut, you’re talking huge levels of job losses, not just at the agencies that work with GM, but with the media companies that these agencies buy media from on behalf of GM.
They want to save money, watch this turn into a virtual internet only advertising plan. If I were them and considering the dire straights General Motors is in, it would be a valid strategy for them.
With GM to focus on only four of its eight vehicle brands, according to its plan filed with Congress last week to qualify for proposed federal loans, the marketer is likely to require fewer agency resources and could consider consolidating its accounts at a single holding company, some auto experts speculated. The company “would do that it in a minute if it would save them a bunch of money,” a former GM executive said.
Interpublic and Publicis
Interpublic Group of Cos. and Publicis Groupe handle the bulk of GM’s U.S. accounts. The automaker spent $1.6 billion in measured media in the first nine months of 2008, according to TNS Media Intelligence, and $3.01 billion last year in measured and unmeasured media, according to Advertising Age estimates.
GM ends Nine-Year Tiger Woods Endorsement Deal
November 24, 2008
General Motors Corp. has discontinued endorsing Tiger Woods due to cash flow problems at the Auto Maker. The Company has stated that “budget efficiencies during a difficult economy” was the reason… in other words… General Motors no longer has money to sponger the professional golfer.
The Company however had no problems funding a private jet to fly to Washington DC to ask for a bailout.
I wouldn’t want to be working at a Detroit Ad Agency today
November 20, 2008
The Market is pricing General Motors Corporation for no bailout, meaning bankruptcy. $2.21 is the current price and dropping (down 21% so far today). I really wouldn’t want to be working for an advertising agency located in Detroit today. Things will tend to spiral from there as it won’t just be limited to General Motors if shit hits the fan. General Motors (like all other car manufacturers) use a massive list of suppliers to make these automobiles, from headlights to special bolts. In some cases there are only 2 vendors of these parts and a GM collapse can in turn collapse these vendors. Meaning that Ford and Chrysler cannot get the parts they need as for some vendors, well over 60% of their revenue was from GM… leaving manufacturing plants stalled. IE: money paid to workers to just sit there waiting for the assembly line to turn on.
This is the last thing that people want happening… as whatever was left for Advertising now is going to payroll.
This is bad.
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