Media Buying Briefing: Legal woes can hurt a holdco, but will it matter to clients?

It’s been known for a while that WPP is facing and fighting legal threats to its business dealings, so how is that translating to marketplace clout and client trust in it? Perhaps not as badly as one would think. 

But first, a quick review of what we know. Former WPP Media exec Richard Foster’s lawsuit against the holdco is viewed as a big problem for its exec team. The allegations of undisclosed rebates and kickbacks are as serious as they are salacious. However, they’re arguably not as big of deal as the class-action suit that has been sitting on the docket since March, largely unremarked on until it turned up as an exhibit in Foster’s case earlier this month. That one, alleging former WPP CEO Mark Read, CFO Joanne Wilson and WPP Media chief Brian Lesser misled shareholders for 19 straight months, could end up mattering more. Foster’s case is about specific business practices. The class action is about whether WPP lied to an entire market for nearly two years. 

Finally, there’s the investigation WPP’s 15th largest client Sony launched into the holdco’s rebate practices, determining in some cases that WPP was keeping 80% of the savings it received back from publishers. Shockingly, WPP execs didn’t dispute that fact. 

Most of these are allegations from former executives, and worth taking with a grain of salt, not least because marketers at Coca-Cola and Jaguar Land Rover have spoken glowingly about the holdco recently. (Although Coca-Cola is in the throes of reviewing its global media besides the U.S., which WPP is defending — that outcome could offer somewhat of a verdict on these allegations’ impact.)

But allegations inside a class action lawsuit don’t go away quietly, or quickly. In fact, they can take as long as four years to play out, which can come at a hefty price. Settlements in cases like this aren’t small — recent comparable payouts have run from tens of millions to, in a handful of major cases this year, several hundred million dollars, funded directly by the company and its insurers. 

The costs don’t stop there. These cases force disclosure through discovery, tie up execs for years and keep the underlying allegations in front of the same investors WPP needs to convince its turnaround is real. And they tarnish execs’ reputations whether or not the suits are successful.

“The exposure can be in billions of dollars of market value that can vanish,” said Lisa Solbakken, co-founder and partner at Arkin Solbakken LLP, who’s kept an eye on WPP’s cases. “Beyond dollars, it turns into a business setback that raises very serious credibility issues, all of which can bring in years of discovery and disclosure obligations.”

Whether these cases are determined in WPP’s favor or against it, in some ways the damage is already done, noted Solbakken. “The reality is that as folks dig down deeper into this stuff, ultimately, there are individuals involved, and individuals’ credibility, and individuals’ professional livelihoods. And so, the worst case scenario is that this type of case goes all the way, and that there’s liability found, and that it extends not just to the company but to individuals,” she said. 

And yet, there is the chance that clients just don’t really care that much, so long as they can still show their bosses that savings have been secured and audiences reached. One consultant, who spoke on condition of anonymity, pointed out that the broader implications of what’s being alleged of WPP has been in the public eye since the infamous K2 Report of 2016, and we’re still talking about it with not much difference since. 

“You would expect there to be a big fallout, but there rarely is,” said the consultant. “You would expect that, while considering WPP in this situation, [potential clients] would be like, ‘Based on this news, we’re no longer going to consider them for our business’. And I’m just not seeing that happen.”

And here’s why. “Nothing really changed because I think what it reminded a lot of marketers was that it’s both a pay problem and an agency problem,” said the consultant. “Because any CEO is going to look at their CMO and their marketing team and say, ‘Well, how didn’t you know this? Why were you not actively managing and governing your agencies? Surely that’s your job.’ Now, I’m excusing for a second what has been alleged, and I’m also not naive enough to think that this stuff [doesn’t] happen everywhere, and it’s just whoever ultimately gets gets caught is unfortunate.”

Ultimately, this is a glass-houses issue because, to some degree, every agency is probably doing some of the same things — they’ve just either been more careful, or didn’t fire the person or people with the receipts. 

“In the last year there’s been a lot of mudslinging, and that maybe there would be more of a pile-on, but there hasn’t,” said the consultant. “That’s always quite telling because I think if there was a pile-on, then it would suggest that WPP’s problems are worse than than others. But I think everyone’s got these skeletons.”

In WPP’s case, these aren’t Cindy Rose’s skeletons — she just inherited them. How she acts going forward will also be a tell about how much change she plans to implement, since two out of the three execs named specifically are still there in current WPP Media CEO Brian Lesser and CFO Joanne Wilson.  If the court cases end up going against WPP, it will be interesting to see what she does about their status. And as for Read, he’s no longer part of the holdco, so what price might he pay?

Color by numbers

Sports content was the main driving force behind the upfront market, which is essentially wrapped for this year. But the real power of sports lies with celebrity athletes, even those at a collegiate level thanks to NIL. As college and pro football are about to kick off their 2026-27 seasons, Opendorse, which calls itself the leading NIL platform and counts more than 200,000 student-athletes in its universe, released some stats to show how NIL has exploded. 

Here are some stats that show their growing clout:

• The overall NIL spend on college football products and services is expected to hit an estimated $2.9 billion by the end of this season.
• College athlete activations average 5.6% social engagement rate compared to the 1.9% industry standard for traditional influencers. 
• The top echelon of college football positions can expect annual NIL earnings of $3.1M (quarterbacks), $1.0M (wide receivers), and $932K (running backs), respectively. QBs have the best ratio of roster spots (4.8% share) to commercial NIL deals (17% share).   

Takeoff & landing

• Speaking of NIL, Publicis Sports launched a strategic partnership with NFL star Travis Kelce and 3 Arts Sports, launching TEKTA, an NIL consulting and activation offering that helps brands identify, activate and measure partnerships with collegiate athletes and universities.
• And speaking of lawsuits, S4 Capital is being sued by three executives who sold their agencies to the holdco but allege that their payout is being withheld. 
• Omnicom confirmed the basic details of an Adweek report last week that said the holding company has outsourced hundreds of personnel operating its Omni platform to third-party technology services company Endava, laying several of them off in the process in recent months.
• Performance shop Chief Media purchased Amazon consultancy AMZ Advisers and social media agency Reach Social for an undisclosed sum. 
• Personnel moves: Noble People hired longtime IPG investment veteran Stacey Stewart to be its head of media investment & activation … Publicis Health Media tapped Stephen Farquhar to be its new CEO, replacing Andrea Palmer … Experiential agency George P Johnson named  Brian Neville its global COO and Paolo Zeppa president of GPJ Americas … New Engen named Alix Barrett its vp of client engagement.

Direct quote

“There are a number of categories that didn’t spend the kind of money that I think the sellers were expecting and are some really big categories that sort of prop up the marketplace … I’m not going to say pharmaceutical was down, but pharma was not up double digits like it has been. And pharma has been masking the decline in autos, [movie] studios, CPG and telco. Pharma was doing so well that I think everybody just sort of ignored the decreases that they were seeing in those other categories.”

— The head of investment at a major agency group on the end of this year’s upfront marketplace. 

Speed reading

• Sam Bradley broke the news that indie agency Butler/Till has expanded its agentic buying efforts into the audio space with iHeart Media. 
• In his latest Future of TV Briefing, Tim Peterson explained how YouTube Shorts is gaining in popularity and ad dollars among media agencies. 
• Krystal Scanlon covered OpenAi’s move to expand into the European ad market, six months after launching in the U.S. 
• I covered the ANA’s efforts to bring standardization to the measurement of retail media.