Publicis Groupe SA's (OTC:PUBGY) damage from General Motors Corp.'s Chapter 11 filing won't be as bad as originally estimated. The Paris-based advertising agency now says it's owed $12.8 million by GM following its bankruptcy. That's a large decrease from numbers that floated around in June when GM said it owed Publicis and its media agency subsidiary
Starcom MediaVest Group $148 million while the French company said at the time the number was closer to $78 million.
Publicis, the world's fourth-largest advertising agency, said in a statement about the status of its accounts with GM:
The agencies of Publicis Groupe have worked with Old GM and will continue to work with New GM. As we noted in our release of June 4th, we are now in a better position to quantify our financial exposure as a result of the GM bankruptcy. Since the filing of the bankruptcy, Old GM has signed agreements with some of our agencies and assumed and assigned contracts with other of our agencies to New GM. As a result, we have received payment of the bulk of our fee receivables as of the date of the bankruptcy, and GM has committed to pay us our remaining pre-petition fee receivables over the next few months.
The media industry is breathing a sigh of relief that TV networks, magazines and newspapers have been paid by GM since its bankruptcy. Markets will be carefully reading the details of Publicis' financial health when it announces earnings on Thursday. - Gerald Magpily
See Adweek article
Dealscape: Media industry feels pain of GM
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