WPP needs to ‘change violently’ – former CEO Martin Sorrell claims it has ‘outlived its purpose’

Martin Sorrell has claimed WPP has “outlived its purpose” and needs to “change violently” after suggesting the value of GroupM is the same as the entire company.

Sir Martin Sorrell

During an interview on CNBC News, Sorrell also said shareholders often shy away from taking action to reshape legacy businesses amid fears it would damage the balance sheet.

“If you are trying to restructure a legacy operation which has outlived its purpose and is not fit for purpose you have to make legacy cuts and take hits to the balance sheet that often shareholders are unwilling to take,” he said.

Sorrell, who still owns 1.4% of WPP and is its largest individual shareholder, said holding groups also promise the markets that money can still be made in the “old fashioned way” through revenue growth and margin. But if the business underperforms, pressure piles up “which makes people less willing to change”.

Asked directly whether WPP has outlived its purpose Sorrell said: “It has and it needs to change violently”.

That should involve breaking up the company, he said, suggesting that its media buying group GroupM is probably worth $15b, the same as the entire company.

The boss of S4 Capital also said that to achieve transformational change, you need someone “from the outside” to lead a “radical revolution”.

“Radical evolution does not work, it has to be radical revolution, that is the key issue.”



Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing