Martin Sorrell Weighs In on Need for More Media Consolidation
By Benjamin Mullin
Martin Sorrell, the former chief executive of advertising giant WPP Plc, described himself as a "realist" regarding the challenges facing traditional media and advertising companies and emphasized the need for scale during an interview at an ad-industry event.
On stage with LUMA Partners CEO Terence Kawaja at the company's Digital Media Summit in New York on Tuesday, Mr. Sorrell continued to point to the growing advertising and programming strength of Amazon.com Inc. and its potential to challenge television companies as well as the advertising duopoly of Google and Facebook Inc.
Responding to a question about the future of the TV advertising business, he cited the spending power of Amazon and Netflix as the primary factor motivating potential deals across the media sector, including the exploration of a merger of CBS Corp. and Viacom Inc. and 21st Century Fox Inc.'s agreement to sell most of its entertainment assets to Walt Disney Co.
"They have a shot," Mr. Sorrell said of companies with traditional TV businesses, adding that Disney CEO Robert Iger, "in my view, he has a real shot."
Mr. Sorrell also favorably compared the total advertising revenue of a combined CBS and Viacom to Facebook.
"You put the two together, you're almost as big as Facebook in terms of clout and heft," he said. "So I think the answer is, if I'm Shari Redstone, I want to put it together, and I want to put it together fast, " referring to the media companies' vice chairman, who has been pressing for a recombination of the companies controlled by her family. On Monday, CBS filed a lawsuit to try to prevent her from forcing a merger. Ms. Redstone has denied that she's trying to force a deal without support from both companies.
Mr. Sorrell also alluded to the potential upsides of his exit from WPP, citing challenges faced by companies that have "legacy parts" and noting that a fresh start has given him the ability to "look at things through new eyes and to focus on where you think the biggest opportunities are."
He declined to comment on the series of events that led to his resignation from the top of the world's largest advertising company and outlined broad areas of focus for his next pursuit. Mr. Sorrell stepped down last month following the conclusion of an investigation into an allegation of personal misconduct.
"If you asked me about the events of the last four weeks, 'Did you think it was going to go the way that it did?' I would say, 'no,'" Mr. Sorrell said.
When asked at the end of the interview if he wanted to tell his "side of the story" regarding his departure from WPP, Mr. Sorrell said no.
During the conversation, Mr. Sorrell outlined areas of interest for a potential next venture, describing "geography" and "technology" as places where the "growth and opportunities are." Those were also key areas of focus for Mr. Sorrell during his more than three decades at the helm of WPP.
"What I'm looking at, and what I will focus on and try to do again -- as we did in 1985 -- is look at where are the opportunities from a technological point of view and look at where are the opportunities from a geographic point of view and put the two together. That may sound very simplistic, but I think actually, at the end of the day, it isn't," Mr. Sorrell said.