Arnold Eyes N.Y. Shop

Snyder Communications has been negotiating to buy Cliff Freeman and Partners, a move designed to give Snyder’s Arnold Communications a credible presence in New York.
The talks, which began earlier this year, apparently hit a snag last week on the question of price, sources said.
Although issues such as reporting structure and name had been worked out, Freeman and its owner, London-based Saatchi & Saatchi plc, were not satisfied with the financial terms, said sources. Snyder’s stock has dropped in recent months, closing on Friday near $28 a share; its 52-week low is $26.
Both of Snyder’s most recent acquisitions–BDDH Partners in London and Ingalls Moranville in San Francisco–have adopted the Arnold name as part of their own and now report directly to the Boston agency as part of Snyder’s creative services group. Both of those deals were consummated with a swap of stock and some cash.
Arnold chairman Ed Eskandarian and a Snyder representative declined comment when asked about negotiations with Freeman. Sources close to Eskandarian, speaking on terms of anonymity, have said repeatedly in recent weeks that closing on a deal in New York is “imminent.”
Agency principal Cliff Freeman last week denied any “imminent deal” and said “there were no current discussions.” When asked whether there were ever any negotiations with Snyder, Freeman declined comment.
If a deal to buy Freeman did go through, one scenario has the agency remaining a stand-alone unit in its current space in lower Manhattan. Such a deal would align Freeman with a more entrepreneurial company and give the agency the opportunity to work on the McDonald’s New York dealer business, currently at Arnold, sources said.
For Arnold, the buyout of Freeman would put the shop squarely into New York, a city where Eskandarian admits he has never felt at home. Along with a presence on the West Coast and Midwest, entrance in the New York market is imperative to Snyder’s goal of doubling Arnold’s revenues within five years of its purchase.
Arnold closed the books on 1998 with billings of $860 million on revenues of $109 million. The acquisitions in the last 12 weeks of Partners BDDH and Ingalls Moranville pushed its billings near the $1 billion mark.
As for Freeman, it is believed that its relationship with Saatchi has been on the wane as chief executive Kevin Roberts has repositioned the agency as a global “ideas company.”
With the emergence of Tod Seisser as chief creative officer in New York, sources believe Saatchi’s reel has improved to the point where they do not need Freeman as a creative lightning rod.
Also, according to sources, Freeman’s financial performance has not met expectations and Saatchi would save money from the media resources it currently provides Freeman.
A Saatchi spokesperson said, “Cliff Freeman is an excellent business. We have approaches. We talk to people all the time.” But, he added, “Cliff Freeman is not for sale and we support them going forward 110 percent.”
Freeman, which rose to prominence largely on the back of its breakthrough creative work for Little Caesars pizza, prides itself on making unknown companies famous.
With $300 million in billings and $30 million in revenues, Freeman’s top clients include Staples, Fox Sports and Coca-Cola.
Although Freeman’s reel is viewed by some to be as strong as ever, over the past year it has lost some key clients, including Little Caesars, Ameritech and Allied Domecq Spirits USA’s Sauza tequila.