September 12, 2004 - Grey Sunday
A WPP spokesperson announces to a waiting world that the network had acquired the US$ 1.31 billion Grey Global, amongst the Top 7 advertising networks in the world. Taking the new revenues of WPP (combined with Grey Global) one step closer to Omnicom, the world's largest advertising company.

The drama started sometime in June this year when 77 year old Ed Meyer, recognizing the reality of his age, retained investment advisors to effect the sale of Grey. Besides WPP and Havas, Hellman Friedman, a US private equity firm also threw their hats in the ring.

How Grey (with P&G as a major client) and WPP-owned JWT (with Levers as a major client for over a century) sort out 'conflict of interests' will be (another) test of Sir Martin's ability to smooth the edges. Perhaps it is this unique ability of Sir Martin's that saw WPP win the bid. Sorrell is rumoured to have squired Ed Meyer for the past 15 years on the social circuit and thus knew exactly how to outbid the French competitor Havas.

Grey Beginnings
Grey began in 1917 from a single room - as a one-man show. Larry Valenstein borrowed 100 dollars from his mother to start Grey Studies - as a direct mail company. Seven years later in 1925, he hired Arthur Fatt and they soon acquired a string of consumer accounts. And thus was born Grey Advertising.

The last half century has seen explosive growth at Grey, masterminded by the redoubtable Ed Meyer who had during his tenure, amassed 22% of the stock. (And who must have made a fortune as a consequence of the buy-out!) More important, during this period Grey had built up a close partnership with Procter & Gamble, one of the world's largest branded goods company and the agency's largest global client.

I suspect that Marion Harper must be smiling in content - and not just because of the celestial harps ! The late ad man who was behind the formation of the first international advertising network called the Interpublic Group, would be pleased to know that his move has become the trend. (Incidentally, Harper was ousted by his own Board, shunned by his peers and died an unhappy man. And not surprisingly, his name rarely finds mention in advertising. That's the advertising world for you!)

September 14, 2004 - Sony Tuesday
That advertising agency networks are not the only subject of takeovers, was demonstrated just 2 days after the WPP - Grey announcement. That's when Sony Pictures Corporation and Comcast Corporation officially made known their decision to acquire Hollywood giant Metro Goldwyn Mayer (MGM). It was only a few years ago that Sony had acquired Columbia Pictures - another Hollywood giant. With the latest acquisition, Sony will control nearly 40% of all Hollywood content ever produced!

In a deal worth US $5 billion, Kirk Kerkorian, MGM's controlling shareholder & Alex Yemenidjian, CEO managed to clinch the deal with Sony after extended negotiations (Sony was the sole bidder after Time Warner withdrew from the race.)

Content is King
Now, Sony and MGM will together join forces to create the world's largest film library of 7,600 titles (3,500 movies from Sony and about 4,100 from MGM). MGM's treasure trove includes the all-time classics like Gone With the Wind and (11 Oscar laden epic) BenHur. Not to mention popular "sequel" blockbusters like Rambo, Pink Panther and the ever popular James Bond series (scheduled to go into its 21st production). Sony on the other hand, has to its credit recent productions Spiderman 2 (on which it has 'lavished' US $ 200 million). And 007's next adventure can only expect even bigger budgets from the Sony MGM combine.

The future of media will be driven by content. And Sony knows this better than anybody else. That's why it has all along maintained a powerful focus on acquiring superior content - alongside its consumer electronics business. (Incidentally, Sony didn't quite make it in the video cassette format race, where Victor Corp's VHS standard eventually became the industry preference to Sony's Betamax format. And now, the race is on for the next generation standards - as the market for DVD's hots up.)

For Sony, it seems to be a case of content holders & content distribution going hand in hand with content. Sony's DVDs, TV channels & video-on-demand systems will complement each other and (hopefully) justify the huge investments made in content. And of course, sale of content rights to third parties will always be a lucrative option ! Anyway you look at it, the massive investment to 'corner' content should bring in revenue one way or another.

The Future
The Sony-MGM deal should see the end of MGM's joint ventures with rival channels. Like the Zee MGM venture in India. And make Sony consolidate its position. Just like the WPP - Grey acquisition should make the WPP Group consolidate their already powerful position in certain markets like India. (WPP may control nearly 40% of the Indian media business. And we may soon see a Sony MGM Indian channel for Hollywood movies soon.)

Because of these rapid acquisitions & alignments, media is in constant flux. And how it re-arranges itself will be interesting to watch.