At Least 40 Percent Of The Agency’s Clients Have Left After Its Founder Called A Proposed Ad Campaign ‘Too Black.’ And That’s Just The Start.

Two weeks. That’s it. That’s all it’s taken for “the nation’s largest independent advertising agency” to fall to its knees.

The crash sparked rather suddenly — and in quite 2020 fashion — via a company Zoom call. At a Thursday, October 8, virtual meeting attended by some 40 employees of Dallas’ The Richards Group, the advertising agency’s 88-year-old founder Stan Richards described a newly proposed spot for client Motel 6 as being “too Black” for the motel operator’s “white supremacist constituents.”

Six days later, following inner-office turmoil about what Richards said, and reassurances from executives that these offenses could be handled in-house, word of Richards’ comments were leaked to the trade publication Ad Age and to the Dallas Morning News, each of which swiftly shared the indiscretion.

The fallout was fast.

An “outraged” Carrollton-based Motel 6 — representatives of which were not even in attendance at the Zoom call in question — was the first to act, immediately severing its 30-year ties with The Richards Group. The hotel chain, which boasts 1,400 locations nationwide, had famously conceived (along with the radio personality Tom Bodett) the longstanding and memorable “We’ll leave the light on for you” slogan.

Others big-ticket clients quickly fell in line: Brands including Home Depot, Keurig Dr Pepper, H-E-B, The Salvation Army and Shiner all publicly announced that they’ll no longer be using The Richards Group’s services. Cracker Barrel removed The Richards Group from the list of agencies it was considering hiring as its new advertising firm. Pest control company Orkin announced that it would be “evaluating” its relationship with the company; and same with University of Texas at Austin, whose Moody College of Communication named its Stan Richards School of Advertising and Public Relations arm for The Richards Group’s founder.

Though other big-name entities — including Firehouse Subs, Hobby Lobby, Fiat Chrysler, Advance Auto Parts, Charles Schwab, Dish Network, Boston Market and Choctaw Casinos & Resorts — have yet to publicly reveal the statuses of their relationships with The Richards Group, Richards himself said his comment has already cost his namesake company some 40 percent of its business.

The Richards Group employs about 700 employees, reported more than $200 million in 2019 revenue and claims more than $1 billion in annual billings. Formed in 1976, it has become a giant in the advertising world — and an economic driver locally, with dozens of smaller agencies and production houses depending on Richards Group subcontracts to make their bottom lines. Arguably more so than any other entity in the city, it deserves credit establishing Dallas as noncoastal American hub for advertising business.

In the end, it now seems Richards might be his own namesake’s undoing, which is why, amid the ongoing turmoil and just a month after telling D Magazine that he’d never retire, Richards on October 15 told the Dallas Morning News, “I am firing myself.”

If only it were so simple.

Richards’ “too Black” comment might indeed be the nail in the coffin. But the coffin’s been lingering around for some time.

Sorry Doesn’t Cut It

Among the many specialty services that The Richards Group’s website touts itself as offering is “crisis and issues management.”

It describes said services as follows: “Most of the time we play offense, but when we play defense, we play to win. From product recalls to allegations of employee abuse to natural disasters of all descriptions, our crisis management experts work fast and hard to turn negatives into neutrals, compress the news cycle and fight firestorms on social media.”

In the immediate aftermath of Richards’ comments becoming public, the agency indeed sprung into action on this front — beyond even Richards throwing himself under the proverbial bus to the DMN and releasing an apology video targeted specifically to the UT-Austin community.

First and perhaps most notably, it protected its own ass. The company promptly removed the client list it had once proudly hosted on its website, likely to run cover on other agencies from reaching out to the names on the roster and trying to poach any potentially wavering ones for their own client lists.

Secondly, the agency posted a pop-up apology to its website. Signed by Glenn Dady, who Richards named in December as his eventual successor, the note (still up at the time of this writing) greets all visitors to the site and claims Dady has “has never been party to nor tolerated racism in any form” in his 40 years with the company. The note also acknowledges that The Richards Group’s “brand has been tarnished” and that the company has “a lot of work to do to further societal change.” It ends with the following mea culpa: “We understand and regret the pain and concerns of all those who were deeply troubled by the words our founder spoke. He can’t take them back. We can only ask for forgiveness and promise to learn and be better. We ask our many friends for understanding and prayers as we move forward.”

It’s not clear how many bought the note’s sincerity. Beyond its own contradictions — it’s a little odd to both deny and acknowledge one’s wrongdoings over the span of a mere 140 words — the sheer volume of clients who’ve left The Richards Group in recent weeks tells you all you really need to know about the statement’s effectiveness.

On the other hand, many of the companies leaving The Richards Group out to dry have substantial issues all their own.

Motel 6, which lambasted Richards’ comments as “in direct opposition of our values and beliefs as an organization” was forced to pay almost $20 million in discrimination-related fines in recent years after its Phoenix-area and Washington state hotels were found to have alerted U.S. Immigration and Customs Enforcement officials when guests with Hispanic-sounding names booked rooms.

The Salvation Army, which left The Richards Group after first acknowledging appreciation for Richards’ apology, has been accused of LGBTQ+ discrimination for years. (Chick-fil-A, which left The Richards Group after a 22-year relationship in 2016, has also faced enduring public shaming for its owners’ own concerning LGBTQ+ stances.)

Meanwhile, social media users on the left have repeatedly dragged the now-departed client Home Depot and repeat offender Hobby Lobby (which hasn’t made the status of its Richards Group relationship known) for their ownerships’ continued financial support of the Trump administration.

And, rather notably, one of the reasons Cracker Barrel was likely even in the market for a new agency of record was because its own ongoing issues with racial discrimination resurfaced amid the nationwide racial injustice protests over the summer.

Maybe The Richards Group’s crisis management department was part of why these brands flocked to the company’s $45 million Uptown Dallas tower in the first place.

But why, then, is the brand’s most recent tweet not an apology? Or, really, just anything other than a now wholly irrelevant, if not outright tone deaf, congratulatory note to now-former client Motel 6? And why does Richards himself keep digging upon finding himself in a hole?

In an interview with Texas Monthly, Richards defended his Zoom meeting comments as follows: “I didn’t think [the ad] was going to serve the client well, because it was a multicultural assignment, and the work I looked at was not multicultural. So what I said was, ‘It’s too Black.’ In trying to protect the client’s business, I just didn’t want to have a campaign out there that was going to run off any of their guests. And that campaign would have. It should have been more multicultural, and it wasn’t. It was very Black.”

In that same piece, he also wholly copped to expressing concern over Motel 6 possibly losing “white supremacists who chose not to do business with them.”

Industry experts are uniformly slamming Richards’ comments and the toxic environment that clearly afforded them.

Employees at The Richards Group aren’t even feigning surprise.

A Long Time Coming

Outwardly, The Richards Group has always been lauded as one of Dallas’ best places to work.

In Dallas advertising circles, though, whispers about The Richards Group’s strict and stodgy work environment haven’t always been so kind. While the company’s infamous 8:30 a.m. clock-in times and shirt-and-tie rules have reportedly become more lenient in recent years, other employment issues have come to light.

You don’t have to claw too deep to find it, either; anyone with a web browser can find plenty of dirt. On Glassdoor, past employees complain of a “boys club” ladder that’s impossible to climb and a lack of maternity leave through at least 2019. Meanwhile, the Richards Group’s own website section dedicated to company leaders reveals fewer than 15 people of color in more than 100 roles deemed large enough to earn profiles. Similarly, companywide photos confirm a stunning lack of diversity.

As Richards starred in videos touting the importance of treating his team right (see above) and gleefully promoting perks like the Uptown office’s nap rooms, insiders paint a difference picture of life at the agency.

In the wake of Richards’ “too Black” comments, alleged employees took to anonymous Reddit burner accounts to offer their own insights.

One complained about a lack of communication from higher-ups as the story spread just being the tip of the iceberg: “Things are just as bad with employees. Many of them, including myself, have been active participants in fighting for social change and we are beyond angry at the fact that now everyone is paying the price for Stan Richard’s racist comments. Even if the agency is to survive (and this isn’t even certain), I know many people that cannot remain in a place where the moral foundation seems to prioritize white supremacists over diversification.”

Another more directly referenced dangerous seas: “It feels like we’re on the Titanic. Most of us saw the iceberg years ago. We wanted to save the ship. We begged the captain to avoid the iceberg and were ignored. Well, on Tuesday we hit the iceberg. And it turns out the captain was the iceberg the whole time. To add insult to injury, while most of us drown slowly and get lost in the chaos, the racist iceberg gets saved by a lifeboat.”

Employees we spoke with on the condition of anonymity confirm these concerns, and others.

They say Richards meant it when he once famously promised he’d work at his namesake company “till I croak” — so much so that the late octogenarian had reportedly developed a bad knack for falling asleep during company meetings in recent years. (Ironically, employees also say no one actually uses their office’s aforementioned nap rooms for fear of coming across as lazy.)

They lament the harried jostling that went on among top execs prior to Richards naming Dady his successor in December. They don’t quite buy Richards’ promise that he will have “no role” in the private company that bears his name moving forward. They question why Richards was even in a position to make his Motel 6 gaffe if he was to turn all of his responsibilities over to Dady starting January 1, as promised.

The sources also say the company has long been top-heavy, that there’s little growth for career development and that the company has had trouble attracting upwardly mobile young talent as a result. They describe a sort of “Stockholm syndrome” that exists among younger employees, and say that the human resources department is mostly nonexistent.

Unsurprisingly, they say pleas for more diverse hires have gone disregarded in the recent past. They laugh at the notion that the company, in the wake of controversy, is only now developing a Diversity, Equality & Inclusion plan.

Before Richards’ comments leaked to the press and were still just a point of intraoffice concern, they say Dady defended his mentor’s actions and promised that the company could internally solve any problems the comment created.

They also say that, in his own internal communications, Richards expressed regret over his comments but never once apologized for the questionable status his words might’ve put their employment in. They say Richards’ Dallas Morning News comments on their job futures — that “the company’s going to have to get smaller… there’s no question about that, because a considerable part of our income has gone away” — were the first formal mention they heard about that.

Just the same, they say everyone who works in the building is preparing their resumes and portfolios. As accounts they were assigned to continue cutting ties with their employer, they’re steeling themselves for receiving their walking papers sooner than later.

They refer to October 14, the day Richards’ comments hit the press, as The Richards Group’s “day of reckoning.”

An Uncertain Future

With 40 percent of The Richards Group’s business already dissipated, Richards firing himself feels like a transparent attempt at plugging the drain. It’s certainly not a massive consolation. In many ways, Richards ensured that in 2015 when he first went public with his succession plan for his company.

Intent on never letting anyone else fully take over his reigns, Richards announced that upon death, he would leave his stake in The Richards Group to a nonprofit — not to his adult sons (one a psychologist, the other employed by a rival San Francisco ad firm), and definitely not to Dady or any others in Richards’ inner circle.

In this scenario, the company that came up with Chick-fil-A’s “Eat Mor Chikin” campaign and Corona’s iconic beach couple ads would be in essence controlled by no one but the bottom line. The nonprofit, the Dallas Morning News says, will be “contractually bound not to interfere in the agency’s operations.” It will receive payment in the form of annual stipends or dividends for its equity, but “will not govern The Richards Group” and [its] trustees will have no say in [The Richards Group’s] strategy or leadership.”

There is speculation that, in Richards’ absence and as a means of retaining its top talent through this controversy, The Richards Group is negotiating profit shares for its employees. But how any of this plays out is anyone’s guess. The nonprofit Richards is bestowing his equity upon has yet to be publicly identified, and because The Richards Group is privately owned, the company is under no obligation to share that information at this time.

It’s the unknown that’s the scary part — not just for The Richards Group’s longevity or for the security of its employees, but for the entire Dallas advertising ecosystem that revolves around the brand. With so much of The Richard Group’s business now known to be gone, there’s no telling what the future holds for the literal thousands of working ad world Dallasites whose gigs were already tenuous due to pandemic-related budget shrinkages.

Almost certainly, The Richards Group will at least internally consider rebranding, perhaps taking on one of the identities of its many recent offshoots, like Lerma.

Surely, some employees will consider jumping ship and launching their own competing boutiques — something those already immersed in those hyper-competitive markets warn against. Owen Hannay, chief executive of Dallas-based Slingshot agency, told the DMN he’s also worried that the Richards Group will dump “hundreds of employees into an advertising community that can’t absorb them.”

Design firms, production houses and editing companies dependent on The Richards Group throwing work their way are wondering what comes next. No one really knows. Everyone is skeptical, if not outright concerned.

Two weeks ago, everything looked hunky dory on the surface at The Richards Group. Continued success overruled any other worries.

Then an 88-year-old dinosaur ran his mouth in an ad meeting — one that he probably shouldn’t have attended in the first place. Now, there aren’t enough fingers to plug all the holes, and the whole Dallas advertising economy is an uncertain mess.

All this, over a goddamn Motel 6 ad?

Clearly, it’s bigger than that.

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