Martin Sorrell Spars With Ken Auletta on the Future of Media

Francois G. Durand/Getty Images
Martin Sorrell

Sorrell held up Vivendi's "advertainment" model as the future of the media and ad industries.

In what was best described as a “boxing match” by one of the contestants, Sir Martin Sorrell and Ken Auletta took to the main stage at Cannes Lions to ostensibly talk about the future of the media business.

The two sparred as Sorrell, who was unceremoniously dismissed from ad giant WPP in April after charges of underling abuse and misuse of funds to pay a prostitute, asked Auletta questions about his book on disruption, Frenemies, while Auletta lobbed back inquiries about the accusations and Sorrell’s new company.

When Auletta could get a question in, Sorrell summarily dismissed the allegations that were reported by the Financial Times and The Wall Street Journal, though he mostly referred in the past tense to statements from his lawyers. He likened the dismissal to being "shot," and said he has testimonies from several former employees that the abuse allegations are inaccurate. "Am I an easy person to deal with? I am demanding," he admtted. "Maybe they talked to the wrong 20 or 25 people."

Sorrell said he had signed a non-disclosure agreement, but also said that he may take legal action. He also added that he has asked WPP for an investigation into the leaks.

In between the rounds of questioning, Sorrell vaguely discussed his new media company, S4 Capital, saying he wants to address industry needs. What those are is a long list: to be more flexible, faster and cheaper; to be more global while being more local; and working more closely with millennials and influencers. "But I’m not promising anything — yet," he said.

Perhaps Sorrell is looking to Vincent Bollore’s model for Vivendi, the French media behemoth which owns StudioCanal, Universal Music, physical theaters and its Vivendi Village event spaces, as well as the vertically integrated Havas ad agency and various telecoms holdings.

Sorrell said Bollore’s "advertainment" model is the most promising. "That model, though people pooh-pooh it because of potential conflict of interest, will become a more and more significant idea. The lines are getting blurred," he said.

Auletta discussed the future of the media business as Facebook and Google face the fallout from Cambridge Analytica and fake news losing the trust of consumers. If the bottom falls out the ad industry, so go the big media companies.

"Without ad dollars, the media ecosystem will collapse, and I don’t believe the subscription model is a substitute," he said. "The middle and working class haven’t had their income rise in roughly 10 years, so the thought that the average citizen who already spends roughly $260 a month for subscriptions — and that’s not including gas and electricity — can afford to pay for Facebook or even a newspaper is fallacious."

Auletta suggested that the coming "Mediapalooza 2" of mega-mergers is upon us, and he warned that the new media conglomerates will have to be careful to blend company cultures to avoid repeating the 2000 merger of AOL and Time Warner, which he branded a "disaster."

Auletta also echoed Michael Wolff earlier in the week, with the New Yorker writer saying that media coverage of the White House is sucking all the air out of the room. "The President of the United States lies all the time and the press has to point that out when he lies," he said, garnering huge applause.

But due to that coverage, there are no stories that aren’t touched by Trump. "It’s wall-to-wall Trump. We risk reinforcing the view of people who support Turmp that think we are out to get him," said Auletta. "That weakens journalism."