Publicis Offers Customers of Ailing Greek Business Partial Compensation
Publicis Groupe SA (PUB) said it is offering partial compensation to Greek television and radio clients which lost money after the unit of its local Leo Burnett advertising agency failed to pay bills.
Greek TV and radio stations didn’t receive payments for advertising space when Leo Burnett’s Greek unit, which had booked spots for companies such as Procter & Gamble Co., went into a pre-bankruptcy process in July. The division ran into trouble after a local TV company it did business with, Alter TV, went bankrupt and several Greek clients stopped making payments.
Publicis, France’s largest advertising agency, is offering local broadcasters about 60 percent of what they were owed for ad bookings from companies outside of Greece, Senior Vice President Mathias Emmerich said yesterday in an interview. The Alter TV bankruptcy left “the advertising agencies in Greece with bad debt of 180 million euros ($236 million),” he said.
Antenna Group, a Greek television and radio company, is owed between 3 million euros and 10 million euros and is rejecting the settlement offer, a spokesman said yesterday. The privately-held broadcaster, whose assets include the ANT1 television channel and Rythmos FM radio station, is considering “a range of options to recover outstanding sums.”
“This is the first default of an international client in the media industry since the beginning of the financial crisis,” Antenna’s Chief Operating Officer, Alexander Holland, said in a statement. “It puts high pressure on the country’s entire media sector when an important advertising agency fails to meet its obligations.”
Violence erupted in Greece this week after politicians voted for austerity measures, such as lowering the minimum wage and job cuts for state workers, to address the country’s debt and secure international aid. Greece is grappling with unemployment that rose to 20.9 percent in November and declining industrial production.
“A number of media companies, which have carried advertising booked by Leo Burnett on behalf of companies including Procter & Gamble, Ferrero and Samsung stand to lose multi-million euro payments over the closure of the agency,” Antenna said.
Publicis rose 0.8 percent to 41.05 euros at 4:24 p.m. in Paris. Before today, the stock had gained 15 percent this year.
To contact the reporter on this story: Amy Thomson in London at email@example.com