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Omnicom thrown on creditwatch list

February 13, 2009

Omnicom has been forced to resort to a revolving credit line to pay off $727.0 million in convertible debt coming due in July. “They’d prefer not to,” said Friedman, but frozen credit markets mean companies must use whatever financing they have available. Forbes is reporting, it’s pretty much suspected this is the reason Omnicom has been thrown on the creditwatch list as reported by Media Bistro… literally the company is virtually facing a biofreeze of its access to credit.

This is the scary part of the Forbes article:

Omnicom executives predicted that car sales have fallen to levels so low they have to rebound sometime soon, said Friedman. If they do bounce back, Omnicom will benefit from its relationships with automakers.

There’s too many instances of the word “IF” in that report. Meaning their future is tied to the car industry so IF the bailout works, IF car sales rebound asap and IF consumers start spending on autos, and IF the automakers decide to spend on Advertising rather than payroll and R&D for electric cars.

Don’t think this problem is limited to just Omnicom. HAVAS, Publicis, WPP group plc and virtually every other advertising agency holding company needs to brace for impact, it’s going to get ugly… there is NO way the recent ad agency layoffs are enough in light of the massive reduction in client spending. The chances are they are going to have to lay off more people… much more people.

No shoes, no shirt, no credit?
nocredit

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Written by TheFounder · Filed Under Advertising Agency News 


Comments

  • Grants

    There’s too many instances of the word “IF” in that report. Meaning their future is tied to the car industry so IF the bailout works, IF car sales rebound asap and IF consumers start spending on autos, and IF the automakers decide to spend on Advertising rather than payroll and R&D for electric cars.

  • Grants

    There’s too many instances of the word “IF” in that report. Meaning their future is tied to the car industry so IF the bailout works, IF car sales rebound asap and IF consumers start spending on autos, and IF the automakers decide to spend on Advertising rather than payroll and R&D for electric cars.