I recently had a friend ask me about whether her son should pursue a degree in sports management. Without trying to be discouraging, I told her that there are more than 400 graduate and undergraduate institutions offering various sports degrees. There are maybe a dozen schools worth pursuing, I told her, but start doing the math and you tell me how many of those with degrees will land jobs in the industry.
“It’s even harder to stay at the top in sports than it is to get there.” — Babe Didrikson Zaharias
IPG is quietly and deliberately crafting a plan to combine its three most sports-focused agencies — Octagon, Momentum, and Jack Morton — under one roof.
Industry sources tell me IPG’s objectives range from something as immediate and fundamental as cutting overhead by combining functions (an imperative for any holding company) to a possible sale of the combined entity, or Octagon’s talent rep business.
A principal has been hired for a yet-unnamed “holding company within a holding company” for IPG’s top sports/entertainment/experiential agencies. That individual, Jennifer Breithaupt, the former CMO of Citi’s Global Consumer Business, has been on board for months. Breithaupt, who exited Citi last September after around 23 years, won industry accolades for her entertainment marketing, but she has limited background, if any, in sports marketing — and no agency experience.
Of course, Breithaupt sat on the other side of table when hiring agencies, which may be the point. I’m told Breithaupt has no title yet and that the assignment to develop a name for the new group is at a branding agency. One telling organizational point: Breithaupt is reporting directly to IPG CEO Philippe Krakowsky, while the individual agency heads do not.
An Octagon rep declined comment.
There’s been chatter inside of IPG for years about combining these three agencies, which total more than 3,000 employees. Sources said the individual agency brands will be maintained, since there are fundamental conflicts with around a third of clients. Those potential conflicts start with Momentum’s AmEx account and Octagon’s Mastercard relationship — in each case among those agencies’ most-tenured clients.
Other conflicts between the three agencies include rivals like Coke/Pepsi, BMW/GM and T-Mobile/AT&T.
A combined entity would attempt to present a “best in class” offering mixing the strategic acumen of Octagon with the experiential and activation expertise of Momentum and Jack Morton’s renown in events, “brand experiences” and B2B work. Improving agency margins by reducing personnel, combining backroom functions and cutting other duplicated overhead are initial targets. However, “the most difficult task will be getting these agencies to work together,” said a source familiar with the plan. “Their cultures have always been separate and they are well defined.”
Devising a plan to bring this combined offering to market will also be challenging, said various industry sources.
This move follows the departure from IPG last November of longtime Momentum CEO Chris Weil to co-head a new sports and entertainment unit within Horizon Media. Weil could not be reached for comment.
File this under the heading of “the more things change, the more they stay the same.” This is not a new strategy for IPG. More than 20 years ago, former Momentum CEO Mark Dowley rolled up a half-dozen IPG agencies — two of them were Octagon and Jack Morton. What was then called Interpublic Sports & Entertainment Group lasted less than 15 months and was dissolved after a change at the top of IPG.
Two decades later, Octagon and Momentum are far larger and have a combined client list that includes heavy sports spenders. Still, the nettlesome questions that doomed IPSEG of shared vision, purpose and how to incent the various agencies to work in tandem remain.
“This is widespread, not unique to IPG,” said a veteran agency leader familiar with IPG’s inner workings. “Every holding company is looking for ways to rationalize overhead.”
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