Same Playbook, Different Decade: WPP and the Fiduciary’s Forgotten Duty

Written by William A. Brewer III and Jason Snyder

The litigation commenced by Richard Foster against WPP rips the cover off a familiar story: an agent’s alleged self-dealing at the principal’s expense. While the advertising world treats the controversy over undisclosed media rebates as a novel crisis, it is merely the 21st-century replay of a lesson the hotel industry learned the hard way thirty years ago.

The parallels are striking.

In the 1990s, hotel owners discovered that management companies—their agents—were aggregating the collective purchasing power of the owners to secure rebates on everything from linens and soap to furniture, fixtures, and equipment purchases from vendors. The “justification” then was that these were “standard industry practices.” Of course, owners knew to demand loyalty and candor from their agents. A few hospitality companies complied. Most did not. And what ensued was a decade of litigation wherein numerous of the largest hotel chain brand management companies spent hundreds of millions in litigation costs only to lose billions in awards to owners. In case after case, the courts affirmed a fundamental principle of agency law: an agent cannot secretly profit from its principal’s business. Rebates in any form belong to the owner.

Our firm helped establish in court that the hotel manager is a fiduciary with absolute duties of loyalty and candor to the owner—a framework that universally informs how that industry operates.

Today, the names have changed, but the alleged breach is identical. WPP and its subsidiary GroupM, as agents, buy media on behalf of their clients, the principals. When they negotiate multi‑billion‑dollar rebates and incentives from media vendors, they do not clearly credit that value back to the brands whose budgets made those deals possible. GroupM is running the same playbook hospitality companies were forced to abandon at the turn of the century. It is using the principal’s market leverage to generate a secret profit for the agent.

This is not a debate over industry custom. It is a question of fiduciary loyalty and candor. The defense that these practices are “standard” is an admission of systemic breach, not an excuse for it.

For any company spending significant sums on advertising, the lesson from the hotel wars is clear. The fiduciary relationship with your agent is not a passive partnership. It is a legal framework that you should document and audit to determine if your agent is actually serving your interests or their own.