Saatchi agrees peace terms Peace comes to house of Saatchi
Tuesday 23 May 1995
The move marks the end of one of the most acrimonious fights ever in London's advertising market, characterised by the poaching of clients, suits and counter-suits and a campaign of jibes and accusations .
Under the deal negotiated over recent weeks and finalised at the weekend, Charles and Maurice Saatchi will be free to operate a rival agency, to be called M&C Saatchi Agency, and have promised not to solicit business from their former firm, now named Cordiant, nor to approach Cordiant staff with offers of employment, until the end of the year.
For its part, Cordiant, the holding company that operates Saatchi & Saatchi, Bates and Zenith Media, has agreed to pay some of the Saatchi camp's legal costs, and to relinquish all claims to $40m (pounds 25m) earned by the Saatchi brothers through an investment in the footwear company, Adidas.
Cordiant had argued that the money had been paid in part for campaign work done by the brothers while they were employed by their former firm.
It is expected that bonuses owed to Jeremy Sinclair and Maurice Saatchi, both of whom left the agency after Mr Saatchiwas ousted as chairman, will remain unpaid. Mr Saatchi's bonus may have been as high as pounds 100,000, based on Cordiant's profit performance last year.
Cordiant and US executive Bill Muirhead have dropped their suits, stemming from Mr Muirhead's hasty departure from Cordiant's New York offices earlier this year and subsequent press speculation over what he may or may not have taken with him.
The legal wrangling began early this year, following Maurice Saatchi's decision to set up a new agency and bid for business from his old firm. Three senior Saatchi executives, David Kershaw, and Messrs Muirhead and Sinclair all signalled their intention to join him.
Cordiant successfully sought a court order limiting the three executives to taking only "preparatory steps" toward joining Mr Saatchi, in advance of a court hearing, scheduled for next month. Under the global settlement, the three will be free to take up their positions at M&C Saatchi from the end of this month. Another former Cordiant executive, Simon Dicketts, will also be allowed to join M&C Saatchi on 31 May.
Cordiant had lost four major accounts to the fledgling firm since January, most recently British Airways, worth pounds 80m in billings a year, according to the trade publication Campaign. Another pounds 40m in billings was lost when Dixons, the high street electronics retailer, moved most of its business to the new agency.
Insiders at Cordiant said the loss of the BA account meant that the damage was done, and the company was keen to settle outstanding issues. Cordiant stressed it wanted to continue to service its existing clients and was optimistic about the future.
Comment, page 25
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- 5 This crazy skiing video will leave you feeling queasy
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
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