LOS ANGELES: Interpublic Group is merging entertainment shops Rogers & Cowan and PMK-BNC, the firms said on Tuesday.
The deal would create an entertainment-focused agency with more than $94 million in annual combined revenue.
Rogers & Cowan chief executive Mark Owens will be CEO of the combined shop, and PMK-BNC chairman and CEO Cindi Berger will serve as chairman of the firm, which will be part of the Octagon Sports and Entertainment Network. Owens and Berger will report to Rick Dudley, chairman and CEO of Octagon Worldwide.
Shirley Hughes, MD of brand and lifestyle at R&C, will serve as president of the new agency's brand division, and Alan Nierob, co-president of Rogers & Cowan, will be chairman of its combined entertainment division.
Fran Curtis, president of Rogers & Cowan and Brad Cafarelli, vice chairman at PMK•BNC will be vice chairmen of the new entertainment division. Bill Rosenthal, COO at PMK•BNC, will be COO and CFO of the new agency.
While PMK-BNC is the larger of the two firms, Rogers & Cowan outpaced it last year in terms of revenue growth. In 2018, PMK-BNC’s revenue was $55.5 million, down 2% from the year prior, while R&C posted $38.9 million in revenue, an increase of 19%, according to PRWeek’s Agency Business Report.
The combined firm will have more than 350 employees worldwide. Owens downplayed the possibility of staff reductions as a result of the merger.
"This is not an efficiencies play; it’s really a scale play," he said. "Both agencies have been growing so fast if you go to either of their websites you’ll see there are a lot of job openings."
Owens added that if there are redundancies, "we will always do our best within big holding company to find places for good people to find a home."
The Los Angeles-based agency will have offices in New York, Nashville, Miami and London.
In addition to working for brands, both firms also represent musicians, comedians, actors and athletes. The combined shop will represent more than 500 celebrities and 30 brands from video game companies such as Activision to fast-food giant McDonald’s to YouTube.
The two agencies will be "fully combined and connected in January of 2020," said Owens. The transition plan will begin on Thursday, when agency managers begin meeting to discuss the combination.
Owens said the new agency hasn’t been named but executives will begin discussing a new moniker in coming months. It won’t be a "giant set of initials," he said. "Rather it will be a name that speaks to the future and prominence of the brand."
Talks about a possible merger began six months ago between Berger and Nierob, Owens added.
"The conversation started with [those two] at a junket when they were talking about how the industry is changing how the needs of clients are evolving because of emergence tech and the scale of the big mergers happening in the industry," he said.
The firm did not discuss the merger with its clients, but Owens said he and Hughes began calling a select group of 10 brands on Friday night and Monday morning to give them "an advanced briefing."
"The reception was they said they think it will be fantastic and are looking at it as a great opportunity," he said.
Both agencies and Octagon sit inside Interpublic Group’s Constituency Management Group. Owens said the new head of CMG, Andy Polansky, supported the merger.
"It’s very fair to say [Polansky] was a great supporter of the business and great supporter of this idea," Owens said.
In July, Polansky said the PR firms within Interpublic Group’s Constituency Management Group saw low-single-digit revenue growth on both an as-reported and organic basis in Q2.
This story was updated on July 30 to correct the description of how talks about the merger began.