When IPG entertainment firms BNC and PMK/HBH merge on January 1 to form PMK-BNC, it will create the largest firm specializing in PR, entertainment, and pop culture marketing, according to Michael Nyman, one of three new chairman and CEOs of the combined agency.
That proclamation is “based on what we know about the sectors we measured,” he added. Other sources agree. Nyman declined to confirm published reports that the agency's gross billings will be more than $65 million, but a source familiar with the company agreed with the figure. Another source notes that actual revenues are much less than that, but says the combined agency is still the biggest in entertainment PR.
The new firm will have offices in New York and Los Angeles and a staff of about 150 people, Nyman told PRWeek. It combines BNC's strengths in corporate clients with PMK/HBH's specialty in celebrity talent.
Former PMK/HBH co-CEO Cindi Berger will also serve as chairman and CEO, former BNC president and COO Chris Robichaud will be CEO, and BNC cofounder Brad Cafarelli will be vice chairman.
Its competitors will include a mix of agencies such as BWR, ID PR, DKC (revenue of $22 million), Howard Rubenstein and his firms, fellow IPG firm Rogers & Cowan, 5W PR ($12 million in revenue), mPRm, and entertainment practices at the global agencies, among others.
Clients of the new firm include both corporate clients such as Beiersdorf and Audi, and celebrity clients such as Cameron Diaz, Miley Cyrus, Barbara Walters, and Mariah Carey.
While both agencies are under IPG, PMK/HBH reported up through McCann World Group and BNC reported directly to IPG. Nyman says the holding company is still determining who the new agency will report to in the new year.
Nyman said the merger was not prompted by current economic conditions.
"The strategy in doing this really did not have a lot to do with efficiencies as much as it had to do with creating or combining complementary assets and realizing talented people, great rosters, different areas of expertise," Nyman says. There are no layoffs planned.
"From the PMK side, it allows us tremendous opportunities and resources we didn't have before," Berger adds. "We have already signed two, almost three, clients as a joint firm and it's not even official."
The merger was not without its hiccups, though. The Wrap reported last week that PMK/HBH founders Robin Baum and Stephen Huvane, Simon Halls, Jennifer Allen, and Andy Gelb are launching a new firm called Slate PR with Ina Treciokas, formerly of ID PR. PMK/HBH president Nate Schreiber also left.
"When this news came out, it looked like it would be a major consolidation," says a source who works in entertainment PR. "But now this seems like a fragmentation."
"Clients seem to be loyal to the people who represented them,” adds another source.
Nyman notes that most of the clients the firm lost following the departures fall into the celebrity side of the agency, while the point of the new firm is to create a balance of entertainment/celebrity clients and consumer lifestyle and corporate clients.
This merger allows the agencies to "create scale and start to consolidate," adds Chris Weil, chairman and CEO of Momentum, the division of McCann World Group that houses PMK/HBH.
"The business in Hollywood is changing and it was time for us to look at those changes for the businesses [we have]," Weil says. "I believe by making this move, it allows us to be the leader in the industry and grow globally."
A non-IPG source says the initial losses are likely to only have a temporary effect on the new mega-firm.
"BNC, from its very beginning, knew the way you make the celebrity division work is by complementing that with a strong corporate division – which BNC has done well," the source said. "Some people have left PMK but that's OK. Because… BNC is still going to be the largest entertainment PR firm. Even if half the business goes away, they'll still be the largest."