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Deep Dive 13 Jul 2021 - 5 min read

Treachery, pity and Australian leadership: John Singleton, Russell Tate, Mike Connaghan on the 'sad' British buyback of WPP AUNZ

By Paul McIntyre - Executive Editor

Russell Tate (left): “It's always going to work better if you've got competent Australians running a business in Australia, than competent somewhere else."

Sir Martin Sorrell told Mi3 in May the failings of WPP AUNZ over the past two years was down to a lack of Australian leadership. The architects of STW, which became WPP AUNZ in a grand merger which once touched a market capitalisation of $1bn, are in strident agreement with their old WPP frenemy – and characteristically blunt on what went wrong. It can all be traced back to a deal 15 years ago that could have seen Singo, perhaps worryingly for many, still in the ad business at 80, but for an act of what he calls “absolute treachery”.       

It’s a great pity. We had two or three ways we could have gone. We could have ended up unhappily, which has happened ... it fell apart in London.

John Singleton

The larrikan adman John Singleton dusted off his advertising suit after 15 years out of the business to lay out his final thoughts on the end of Australian control of WPP after its full buyback of the locally listed company in April. 

Singleton, who returned to the ad business all but penniless in 1985 as John Singleton Advertising – he’s now worth hundreds of millions – created what became the country’s biggest and most profitable agency group in the listed STW, before merging with WPP in Australia five years ago. 

It was Singleton, and two of his CEOs, Russell Tate and Mike Connaghan, who built a business that was distinctly Australian and polarising but hugely profitable. They still argue there’s life left in an Australian way, but that it’s all but lost today in adland.  

The problems with WPP AUNZ, the trio argue, have their roots in abandoning Australian leadership under the most recent CEO and German import, Jens Monsees, and a deal that went sour 15 years ago between Sir Martin Sorrell and his then Australian boss, Hamish McLennan, now chair of Rugby Australia and the property juggernaut, REA. 

The so called big bang theory circulating around 2005 was that WPP and the then unassailable STW as an Australian listed holding company would merge all their assets. It ended up taking 10 years to land.

“It’s a great pity,” says Singleton. “We had two or three ways we could have gone. We could have ended up unhappily, which has happened...”

Former STW CEO Russell Tate, who drove much of the company’s diversification and growth, agrees with Sir Martin Sorrell in a recent Mi3 podcast who linked the return of London’s 100 per cent control of WPP and the former STW assets to imported leadership: “It's always going to work better if you've got competent Australians running a business in Australia, than competent somewhere else,” says Tate. 

I had a chairman and a board, who that chairman had appointed, who were not from the industry, didn't understand the industry and didn't really like the industry. And that irked me.

Mike Connaghan, former CEO, WPP AUNZ

Likewise Mike Connaghan, a Singleton and Tate protégé who exited WPP AUNZ as CEO two years ago in a tussle with the board of the then Australian listed WPP AUNZ. 

“It's actually really sad,” says Connaghan, now at News Corp. “We were proudly Australian owned and WPP oscillated between a 10 and 20 per cent shareholding, depending on what we were doing with acquisitions. And that was an up and down relationship, but a very successful one for WPP. I hope that they make some sensible decisions about leadership. And I think the fact that in the end they had to act and take the final 38 per cent [shareholding] out in order to have their way, if you like, because they were obviously getting resistance on what was not a good situation, that they will make the right decision and appoint the right kind of leader down here.”

"They didn't get it"

Word of tension between Connaghan and the WPP AUNZ board and its chair, Rob Mactier, had been circulating for several years.

“It wasn't so much tension,” Connaghan counters. “I think it was more the point that unfortunately, us being a listed company and the only listed company in our space of any repute, meant that we had different kind of reporting and different kind of flow. I had a chairman and a board, who that chairman had appointed, who were not from the industry, didn't understand the industry and didn't really like the industry. And that irked me that they didn't really fully respect what we did and what we delivered and didn't really quite get it. They wanted us to be something else. I think they wanted us to be PwC or, you know, Deloitte or something. And it's like, no, that's not us.”

Where it went wrong

Those differing worldviews aside, the trio all point to a series of conversations in London more than 15 years ago with Sir Martin Sorrell and his then Australian boss Hamish McLennan, as the seeds for the recent turmoil.

STW was flying at the time, WPP, outside its joint venture with STW in Singleton Ogilvy & Mather, less so. But to continue the fortunes of both groups, a series of meetings and conversations in London between Sorrell, Tate, Singleton, McLennan and then STW chair Mark Carnegie, agreed the two businesses would combine in Australia to create a marketing services giant, only to be quickly reversed. As the trio tell it, Sorrell and McLennan claimed no recall of the conversation and verbal agreement.  

“There was an inevitability for us to take over the WPP businesses in Australia,” says Connaghan. “This incident sort of put it back about 10 years.”

Singleton is far more blunt about those events and the reasons for the end of Australian control of WPP in Australia and New Zealand. 

“It fell apart in London,” he says. “We were over there and there was Martin Sorrell and Hamish McLennan, who, as you know, ran The Campaign Palace which disappeared and George Patterson which was just about to disappear. So he was snapped up by Sorrell following his fantastic success.

“We sat down with Hamish the next day and then with Martin and they didn't remember that conversation. Not a word of it, which suggests a lack of recall. It was an unbelievable act of treachery … absolute treachery.”

Tate, who often served as the peace broker between Sorrell and Singleton - Singleton says Sorrell "didn't like the cut of my jib" - says it came down to personalities and power. "I think the difficulties arose because of the individuals," he says. "And what the structure was going to look like. Not just me being there so much, but what about after me, what role Hamish would play in the organization? What role people like Michael would play?" 

Singleton argues all three of them would still be around today if that deal had proceeded, although Tate seems less enamoured with the suggestion.

McLennan and Sorrell’s account of those meetings is still untold but listen here to Part One of the two-part series with Singleton, Tate and Connaghan. Part Two is out tomorrow.   

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