City & Business:Great PR, Maurice, but there's life in Saatchi yet

Maurice Saatchi has had a glorious, ego-massaging week. He has lured key senior Saatchi people, both suits and creatives, to join his putative new agency. Many more have been up to his house in north London to talk about switching allegiance. He l ooks set to win the British Airways account and a few more besides. He has generated fantastic amounts of free publicity for himself - "column inches to die for", as one adman described it to me.

And if he wanted retribution against the people who planted the knife in his back, he has had it in heaps: institutional investors have lost tens of millions of pounds because of the slide in the Saatchi & Saatchi share price.

But, as we report on page 1, the tide may be about to turn. M & G, the biggest shareholder in the UK with more than 5 per cent, has publicly turned on Maurice, attacking his record and questioning the judgement of the advertisers supporting him. What it is saying publicly, many other institutions are thinking privately.

Tom Russell, a Saatchi non-executive director, has put the boot in too. He also reveals that for all its glamour and prestige, the British Airways account was actually a loss-making piece of business for Saatchi.

The company admits it has been slow in responding to Maurice's thunderous PR campaign, masterminded by Sir Tim Bell, a fellow founder and former adviser to Margaret Thatcher. But now it is fighting back and will be digging for any dirt it can muster against Maurice: his colossal expenses may prove fertile territory.

Maurice has undeniable charisma, extraordinary talents as an adman and a salesman, and a remarkable ability to command loyalty from others. But for all that he has produced a lousy return for his shareholders, and the majority are glad to be shot of him.

So what in the end will be the damage to Saatchi? The immediate impact on cash flow is minimal. Revenues from British Airways and Mirror Group amount to less than £10m, which is less than 1.5 per cent of group revenues. Almost all the staff desertions have been from the London office of the Saatchi & Saatchi agency - just one of 10 operating companies in the Saatchi & Saatchi group, and one that accounts for just 7 per cent of group revenues.

The defection of Mars, however, would be much more serious. So far it has only said it is putting its advertising up for review next month. It is the switching of mega-accounts like these that could hurt badly. Other giants in the Saatchi group stable are Toyota, Procter & Gamble and General Foods. The loss of any of them would be a blow.

But the larger the advertiser, the harder it is for it to make a wholesale advertising move. The upheaval is greater because of the myriad brands. There are fewer alternative agencies with the international spread. And fewer still not working for rival brands. Potential conflicts of interest make such moves tricky, though not impossible.

Another danger is that the group will find it harder to pick up new business with such a cloud hanging over it. Even this fear may be overdone: on Friday BAT Industries awarded the Lucky Strikes cigarettes account to the Saatchi subsidiary Bates.

Much will depend on the group's legal action against Maurice. If they can stop the desertions and tie him up in legal knots, the saga will quickly disappear from front pages - and advertisers' minds.

As far as the 1994 results are concerned, the group is still going to report the £30m plus of pre-tax profits that analysts were always expecting. The difference is that the shares are 35 per cent cheaper than they were a month ago.

Saatchi is the ultimate people business, solely dependent on the goodwill of employees and clients. I'd be a fool to recommend the shares in the current climate. But if I were a betting man, I'd put a small wager on them bouncing back from Friday's 102p close.