Commonground/MGS has ceased operating because of “circumstances beyond the agency’s control, namely the adversarial relationship between the holding company and its lender,” according to an official statement emailed to employees Saturday, Dec. 5.
Tbe New York-headquartered company, with offices in Chicago, Miami, Houston and LA, had more than 300 employees and billings of $100 million-plus.
The entire agency was stunned by the actions of Fifth Third Bank, which “took hostile actions against CGMGS and froze our bank accounts earlier this week,” said holding company-owner PCH Communications.
The bank had refused to release funds to keep the business going last week, which led to the forced closure, according to the announcement.
The agency apologized for having to terminate employees so abruptly by email. “Unforeseeable circumstances of the lender’s actions” and the agency’s inability to secure capital to keep the doors open “did not afford us the opportune to provide such advance notice”
Staffers were told to collect their personal belongings on Monday.
In October, 2014, Chicago-based Commonground joined with Miami-based MGSCOMM and New York’s Vidal Partnership to form what was called the industry’s first wholly-owned minority-owned advertising holding company controlling the three agencies, along several other marketing units.
Commonground, located at 600 W. Fulton, reportedly had about 160 employees and $45 million billings. Co-founded by Ahmad Islam and Sherman Wright in 2004, it was the US’ fifth-largest African-American owned agency at the time of the merger.
CG clients included Coca-Cola, NBC Universal, Bacardi, Miller Lite, Target and the Illinois Lottery, and Target, for multicultural and also general market advertising. It had expanded into New York in 2013 after winning Verizon’s Africa-American business.
It’s said that although Commonground and the two Hispanic agencies would like to regroup as two separate agency entities, they won’t be able to use their original names.
