Martin Sorrell is instantly recognisable. He is wearing a white t-shirt with white Apple AirPods tucked into his ears in a fine room with white walls lined with cartoons drawn from numerous articles about the media mogul over his many decades at the top.

Sorrell is a natural conversationalist, capable of moving across decades of experience that saw him turn a tiny maker of wire supermarket baskets called WPP into the world’s largest marketing and communications group.

A fearless dealmaker, he bought J Walter Thompson, an iconic American advertising agency dating back to 1896, listed his business on Nasdaq, and then turned around and acquired the Ogilvy Group – a deal the New York Times described as the “largest amount ever paid for an advertising agency.” And that was just his career between 1986 and 1989.

Dozens of deals followed as Sorrell led the acquisition of Young & Rubicam for $5.3 billion, TNS Group for $1.9 billion, as well as a string of other moves. Over decades Sorrell relentlessly turned WPP into a global business with over 100,000 employees and a market capitalisation that peaked at more than €20 billion.

His exit when it came from WPP in April 2018 was unpleasant. Accused of misconduct, Sorrell denied the allegations. He was in the middle of defending himself when news of the investigation was leaked to The Wall Street Journal.

While the source of the leak was never publicly identified, it led Sorrell to conclude his position was untenable. An investigation into the allegations against him concluded there was no proof of misuse of company funds, the amount of money in question was “wholly immaterial,” and no other WPP employee was affected. Sorrell, however, resigned afterwards.

Confidentiality clauses mean Sorrell cannot discuss this period, but he does, however, have much to say, not least about the business he once created, and the exciting new one he now leads. By any measure, Sorrell is a business great, who truly shaped an industry. 

*****

In a 2018 New Yorker profile, Ken Auletta interviewed the historian Simon Schama who went to primary school with Martin Sorrell at the Haberdashers’ Aske’s Boys’ School in northeast London. Schama described Sorrell in this article as “exuberantly tough” and “full of a kind of cuddly warmth” that is often camouflaged.

In our interview, there is only a rare flash of this steel, and then only when WPP is mentioned. A relaxed Sorrell instead opens up about his early days, views of Brexit, the impact of Covid-19 on his industry, and discusses where he thinks things are going next.

We start our conversation discussing his early days from the influence of his parents to doing his MBA at Harvard Business School, after completing his studies at Cambridge University.

Sorrell was the second youngest in his class of 700 when he graduated from Harvard in 1968.

“When you are asked every day ‘What should the chairman or the CEO do and why?’ it does make you think that you can run the world – which you can’t!” he says with a laugh. “It was a hothouse where you met some really interesting people and made some lifelong friends.”

He recalled one of his professors, George Cabot Lodge II, whose father Henry was a famous Republican senator and ambassador, making an impression on him. “He said life was about the intersection of three circles… family, career and society,” Sorrells says.

“While we thought it was a pretty boring and simple theory at the time actually it had a lot of depth to it.”

Sorrell said his mother had been against his move overseas to Harvard, during a tumultuous time in American history. “She was a proud Jewish mother, and absolutely impossible…” he laughed.

“I had a tremendous relationship with my father. A very deep personal relationship. He was what you would call today my mentor. I think everybody needs someone they can talk to candidly who doesn’t have an agenda, who has your personal interests at heart.”

Sorrell’s father was a retailer who ran a large chain of radio and electrical stores stretching to 750 outlets. The business was part of a quoted industrial holding company.

“It wasn’t his own business sadly which was very sad. I think my father could have built a colossal empire. He was very talented,” Sorrell said. He said his father Jack left school at 13 and grew up in the east end of London as the son of immigrants from Ukraine.

He said his father educated himself and memorised speeches from Shakespeare. A talented violinist Jack Sorrell had won a music scholarship to the Royal College of Music in London but had turned it down to go to work along with his five siblings.

“He was an immensely clever man who I think never fulfilled his potential in terms of owning his own business…but he treated the business he ran as his own,” Sorrell said.

“My father conditioned me to work hard. He worked 7 days a week but that didn’t mean he ignored his family, his mother, my mother or me. He was a man who actually had an incredible gift that he could find the time and allocate time to anything he felt he had to do.”

Martin Sorrell has been married twice, most recently to Lady Cristiana Falcone Sorrell, who announced she was divorcing him in February. I don’t think it is appropriate to ask him about this, but Sorrell volunteers that his father was an influential figure in the lives of his three sons from his first marriage to Sandra Finestone.

“I was travelling, and he would fill the void,” Sorrell said. “He was a great man from that point of view and from all points of view.

“My father’s gift was knowing what motivated people. Being a retailer, he knew the consumer inside out. If I was to describe a situation to him, he had a remarkable gift for giving me the right words which would deliver an emotional response from the recipients.”

“It was a quite incredible gift he had. He knew what motivated people. I think my biggest regrets are – one – that I didn’t go into business with him. We did try. We tried for about six months, but it didn’t work. My second regret is that he didn’t have his own business. I think that was a tragedy as I think he would have been an absolute star.”

“I reached the age of 40 and I thought this is my last chance to go it alone.”

After leaving Harvard, Martin Sorrell worked in various places. He went to work for Mark McCormack, a legendary sports agent he met while studying his business as a case study at Harvard. Sorrell contacted McCormack when he arrived back in London and was offered what he thought was the top job in Britain.

When he arrived at work, Sorrell realised there were two other people already there who believed they were in charge. “I had to fit in with those other two, but I enjoyed it actually,” Sorrell said. Sorrell tried working with his father, but that didn’t work out. He then got a job with James Gulliver, a retail tycoon, as his “gopher.”

“The job description was a personal financial assistant, but I just carried his bag,” Sorrell said. During this time Sorrell was involved in investing, for Gulliver, in an advertising business. He learned too about shell companies, which were prevalent at the time.

“We invested in all sorts of things, a sweet company and a double glazing company, a confectioner and a baker. We had fun,” he said.

Sorrell’s skills were being honed.

Around 1975 Maurice Saatchi, one-half of the brothers who owned advertising agency Saatchi & Saatchi was looking for a chief financial officer. Maurice Saatchi was frustrated at the CVs on his desk.

“He had to see them at 11 o’clock in the morning as by the afternoon they were in a bad condition if you know what I mean,” Sorrell recalled.

A head-hunter suggested Sorrell, and he got the job. “I went in as CFO and now I had found the industry I was interested in – as my dad said. It was a great industry as in advertising you are only as good as your reputation or your last piece of work. So, there were no barriers to entry.”

Sorrell was there for nine years helping turn Saatchi & Saatchi into an iconic business. “Then I reached the age of 40 and I thought this is my last chance to go it alone.” He quit his safe job and borrowed the money needed to buy a tiny company called WPP. “Then it was on into the advertising business and the rest is history.”

Backing yourself

Martin Sorrell believes it is important to own a stake in any business you work with. “When I was at Saatchi’s I ran the finance and the acquisition side of the business as though it was my own,” he said. A stake in Saatchi & Saatchi, as well as his upbringing, made him think this way.

“My Dad used to say he didn’t believe in portfolio investment. He thought it was a mug’s game, a bit of a casino. He felt you should invest in your own company, as it was the company you knew best.” When Sorrell bought WPP, he put up £250,000 to secure 16 per cent of its shares.

“I was putting my money where my mouth was. I think that is very important,” he said. Sorrell is dismissive of executives who build up their stakes using cheaply granted options. “Options are heads I win tails you lose,” he said.

“I mean actually going to the bank and mortgaging your house…putting something at risk. It was what the Americans call putting skin in the game. I think that is absolutely critical.”

“If you don’t do that it is not good for business. I see that, to be blunt with you, with the board of WPP now waffling around. The market value of WPP since I left has halved. There are a lot of noises around the company. It is a focus of a lot of attention, but it is going nowhere.

“I think the fundamental reason is the board and management are more concerned about their position and their jobs than they are – and this is a harsh thing to say – than they are with the performance of the company. That is, I think a big problem for businesses, the separation of ownership and control. You have to unite that.”

In the early 1990s, WPP was in the middle of a recession. The business drew up a five-year plan, and Sorrell invested £1 million in the business, which was a lot of money for him at the time. WPP set itself five-year share price targets, and it hit them within three-and-a-half years.  “People thought I was crazy as it was ‘92 and the socialist government under (Tony) Blair was coming in for the first time and they thought the stock market would not respond,” he said. 

Sorrell was advised not to risk his own cash in the deal, but to borrow it instead secured on his existing shares. He ignored this advice, as he felt it was important to align his interests with his company. “There is a phrase in Yiddish “tuches afn tisch” which means putting your bottom on the table. My father always used to say that to me. That is what it is about. You take risks, you take risks.”

Not brain surgery

Ken Auletta describes his 2018 profile of Martin Sorrell as a “professional obituary.” As can happen, he was premature in his assessment. One month after he resigned from WPP Martin Sorrell founded S4 Capital. He swiftly engineered a reverse takeover of Derriston Capital using his new vehicle.

He then snapped up Dutch media agency MediaMonks for £265 million beating his old business WPP to the deal. By November 30, 2018, S4 Capital had a listing on the main market of the London Stock Exchange.

Before we discuss S4, I go back a bit. When Sorrell led WPP he did deals worth more than $1 billion a time. He endured 9/11 and the financial crash in 2008. I asked him about how he managed all of this, and whether he ever felt strained.

“You formulate a strategy, find a structure to implement it and then get on with it.”

“I don’t think that there is anything such as stress, it just means you are not having fun,” Sorrell laughed. “People say you’re stressed…when it is just because you are uncomfortable or you have a lot to do. I enjoy it.”

“People asked me when I left WPP why didn’t I just go play golf or go fishing in Ireland?” he said. “I think when you retire you vegetate.”

Sorrell said he was advised to go into private equity or private business but felt drawn to public companies. “You are dealing with so many constituencies, I find it interesting,” he said. “I find it interesting to deal with clients, people in the company, the press, analysts, and the current situation with Covid-19.”

“Obviously (Covid-19) is existential for many but we are fortunate we are purely digital,” he said. S4 Capital’s share price fell in March 2020, but it has been marching upwards ever since, with its market cap reaching more than £1.6 billion.

“I enjoy wrestling with issues. I don’t find work intimidating. It can be gruelling sometimes stressful. But if you’re stressed my advice is get away from what you’re doing.”

“I can get anxious about doing things,” he said. “Sometimes I wake up in the morning and I think of two or three things I have to do in the shower. My anxiety is about getting those things done.”

When he was knighted Sir Martin Sorrell he went to the College of Arms near St Paul’s Cathedral in its historic 1670s building to devise a motto and shield. “My motto translated as persistence and speed,” Sorrell said. “I don’t think what I do is brain surgery.”

And what do you do? “I think what I do is…you formulate a strategy, find a structure to implement it and then get on with it.”

*****

“The status quo has been disturbed by Covid-19 so you might as well get on with it.”

S4 Capital’s tagline is ‘Faster, better, cheaper’ and it reflects Sorrell’s motto from when he was made a knight in 2000. “Coming out of Covid-19 this is even more relevant,” Sorrell said of his company’s mission. “I think the qualities you need in business are persistence. Speed and agility are also the key corporate performance attributes at the moment. You don’t have to be Einstein in business.”

How is Covid-19 changing his industry? “It is not going to fundamentally change; it is going to accelerate. At a consumer level, consumers are shopping online. One-third of US households are shopping for the first time for things like essential groceries. They won’t go back. We are educating our kids online. At university, you are probably not going physically but you are going online – probably will do for a considerable period of time.”

The technology to support these changes, he said, was improving rapidly.

“At the media level, newspapers and magazines are dropping like flies. When Rupert Murdoch closes 100-plus titles in Australia. When the Jewish Chronicle and the Jewish News close here in the UK…The Times newspaper group is conducting a strategic review which implies I think the daily (London) Times and The Sunday Times will come together as one.”

Sorrell said content streamers were surging in popularity. “Disney Plus with 50 million subscribers is probably one of the most successful product launches of all time. They are really taking on the free to air channels and ironically Disney has one called ABC.”

“Outdoor advertising might be on the downstroke but digital outdoor is still growing even in Covid-19 times. Finally, in the enterprise, there is an acceleration of digital transformation.”

Managers, he said, who were “hesitant” about disrupting the status quo were now prepared to embrace digital transformation. “The status quo has been disturbed by Covid-19 so you might as well get on with it,” Sorrell said. “It might be unpleasant but do it. At the consumer level, at the media level, and at the enterprise level there is an acceleration towards digital.”

Sorrell said the way leaders led listed companies was going to change. “Before Covid-19… GDP growth was 2, 3 or 4 per cent. You had very little pricing power, very little inflation so you focused on costs. You grew your top line by nought to five per cent and took out costs so you grew your earnings by 5 to 10 per cent, and bought back stock.”

This allowed, he said, chief executives of listed companies hang in on average for five years before bowing out. “Post Covid-19 all bets are off,” Sorrell said. “Things are really tough.”

“It is too cumbersome. It is too big.”

“When you see BP shuttering 10,000 jobs…Centrica 5,000 jobs…there is huge unemployment coming after the furloughs end.”

Has S4 Capital changed? “It hasn’t changed,” Sorrell said. “The mission was a new age, a new era advertising service model.”

“The model we created at WPP and at Saatchi’s is no longer fit for purpose. It has passed its sell-by date. McKinsey in their studies talk about a life cycle of companies in the S&P 500 of the FTSE 100 of 17 years and I think that is true.”

“WPP has managed to survive without me for a number of years but it is not a surprise that it doesn’t work anymore. It is too cumbersome. It is too big. The days of globalisation might be on the wane with the decoupling in particular of China and possibly the US, unfortunately.

“WPP was built around a market share point of view rather like the detergent business with Unilever. You had different brands and if they cannibalised each other that was fine as long as you grew market share. They competed and they cooperated.”

“Today you need a unitary firm,” Sorrell said. In S4 Capital’s case, this means building its content pillar around MediaMonks and its programmatic pillar around MightyHive (a business it acquired for $150 million in 2018) and running them together in one structure.

Sorrell said just prior to talking to me he had finished his daily meeting with his top eight people around the world. “We are knitted together extremely well as a result,” he said. “We talk about our people, the impact of Corona, Black Lives Matter…and our cash flow. It is very important to have a strong balance sheet and liquidity right now.”

These daily meetings, Sorrell said, kept his team together and allowed them to be ready for opportunities to expand. “We have this missionary zeal to disrupt the status quo. We are rebels if you like,” Sorrell said.

Sorrell said S4 Capital was purely digital as that was where he believes growth is. He said it used data to drive digital advertising content as well as deliver personalisation of advertising at scale. He said S4 Capital strove to understand for its clients roughly 20 companies intimately who were shaping the world economy. These included Amazon, Ali Baba, Google, Facebook, Tik Tok and Apple, he said.

“Another principle is around a unitary structure. The model of WPP is no longer fit for purpose.” Sorrell said when he left WPP it had a market cap of £16 billion, down from its peak of £22 billion. Today its market cap is £7 billion. Revenues have flatlined at £13 billion in 2018 and 2019, and are expected to fall this year due to Covid-19.

“The only way that model can survive…is to be broken up,” Sorrell said. Could this happen to WPP? Sorrell indicates he believes it might, without saying so explicitly.

Activist private equity investor Cevien, Sorrell noted, had recently built a stake in education group Pearson. “This might be the beginning…the canary in the coal mine,” Sorrell said.

“Maybe value is beginning to be more important. Cevien is very clever and astute. They think about situations. When I was at WPP they took a look at WPP and ultimately they passed on that idea.”

“They are now the fifth-largest shareholder in Pearson. Usually, their objective is to be the second largest. We will see whether this heralds the arrival of private equity money. There is private equity of about a trillion dollars in the world. That’s a lot of equity with dry powder. We will see if this triggers a wave of people looking at similar situations.”

“The Germans will end up, as usual, being the strong man or woman of Europe.”

Martin Sorrell was a prominent Remainer who argued against Brexit in Britain. Is he concerned about its impact on Britain and Ireland? Sorrell said while he understood that Britain needed to borrow during Covid-19, he was concerned about how this money would be paid back, in the context of Brexit progressing.

“We are going to have to pay for it through higher taxes both corporate and personal which I am not objecting to. Inequality has gotten too great since the ‘80s and Thatcher and Regan. Not just within nations but also between nations.”

“But I think we should be really worried about unemployment,” Sorrell said.

“I sort of felt in the early days of Covid-19 maybe it was better we were out of the common market and the EU and we were on our own,” he said. “The strategy has to be Singapore on steroids.”

Britain, he said, was much more populated than Singapore, which was also an autocratic regime fuelled by cheap immigrant labour.

“It is not the same as the UK,” he said. “Given what we have to pay for now (to survive Covid-19) where is the money going to come from to build the hardware, the rail networks, the airports, the 5G networks we need? Where is the money going to come from for education and retraining the unemployed?”

“Where is the money going to come from? I am starting to get very anxious about that.”

“The other advice I would give is to learn Chinese and code. Those are languages you will certainly need.”

Sorrell said he believed the British government was “consumed with Brexit jubilation,” and did not respond to the threat of Covid-19 early enough. He said he believed the government had hoped that herd immunity would see it through before reversing this decision when it realised how many people might die. “They didn’t lockdown fast enough as a result,” Sorrell said. “And then they went too hard. The Germans went earlier so the contraction was sharper but they came out of it faster.”

“The Germans will end up, as usual, being the strong man or woman of Europe. I am really worried now. How are we going to negotiate a free trade treaty with the US which is a vital market for us and with China which is also a vital market for us? The Foreign Office is good but it is going to really stretch them. I think it is going to be a real problem.”

What advice then would Sorrell give to someone starting out in their careers in such an uncertain world?

“My father always said to find an industry that you like. Find a company within that industry that you like and build a reputation there. And then at a certain age go out and do something on your own which is what I did. I probably did it a little bit too late.”

“If I was going to rerun it all I would have probably left Saatchi’s at 35 rather than 40 to have a go at what was then Wire Plastics Products (WPP). Years later my father said something that was interesting to me. He said that when he was younger there were shell companies around and that he could have done what I did with WPP but he just didn’t know how to.

“He wasn’t sophisticated enough or educated enough I guess to understand how you could do that. I was lucky that I did.”

“The other advice I would give is to learn Chinese and code. Those are languages you will certainly need.”

The Currency would like to thank Barry O’Sullivan for introducing us to Sir Martin Sorrell. Sorrell had hoped to give a talk to MBA students in Dublin in an event being organised by O’Sullivan. The interview was to be conducted by Tom Lyons. The event was ultimately cancelled due to Covid-19 restrictions. Sorrell said he was happy for his interview to be published anyway in The Currency.