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WPP pencil in a big year

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WPP certainly appear to be stepping into 2015 with both feet forward!

Firstly, it's been suggested that WPP might be considering a £2 billion purchase of Tesco's Dunnhumby data division. This would mark yet another major technology purchase for the advertising group, which has significantly grown its revenue from data marketing in recent years. WPP's last tech-based purchase was announced just last month in the shape of an £800 million IBM contract, which has resulted in a significant upgrade of its global technology platform. Dunnhumby was founded in 1989 by the husband and wife team of Clive Humby and Edwina Dunn. It is best known for creating the Tesco Clubcard system, but also works for a number of large clients such as Coca-Cola, Diageo, Procter & Gamble and GloxoSmithKline.

WPP might be considering a £2 billion purchase of Tesco's Dunnhumby data division

The reported sale of the company arrives amidst tough times for Tesco, which was until recently the country's most successful supermarket chain. The company's new chief executive, Dave Lewis, who became known as “Drastic Dave” for cutting costs during his tenure at Unilever, is poised to turn the ship around with a plan to cut costs and sell off assets, including Tesco's Blinkbox streaming service, which is rumoured to be sold off later this week. Lewis replaced Philip Clarke as CEO in July last year and revealed a catastrophic £260 million hole in the company's profits. He apparently hopes to fill these holes by trimming potentially thousands of head office jobs and “Streamlining” the company by shedding Dunnhumby and Blinkbox.

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Tesco CEO “Drastic” Dave Lewis (alongside Tesco's first-half trading profits since 2010)

It was also recently announced that WPP will be boosting its sports and content credentials across the pond (in the US) in 2015 with a $250 million investment in Bruin Sports Capital, a sports marketing agency founded by George Pyne, former president of IMG Worldwide's global sports and entertainment division. Pyne set up Bruin after leaving IMG in August last year, with the help of WPP and other, undisclosed backers. WPP hope to help Bruin Sports Capital build its portfolio organically, through acquisitions and investments. WPP's various media divisions already have a significant amount of sports sponsorship experience, but until now, its specialist sports marketing portfolio has been noticeably lacking, with just BWR, Grey Alliance and Prism listed as sports marketing agencies on the WPP website. Bruin should help fill in that gap considerably.

WPP will be boosting its sports and content credentials with a $250 million investment in Bruin Sports Capital

Pyne, who has a background in sports himself as a football captain at Brown University, said that Bruin Sports Capital's partnership with WPP, the world's largest communications group, will help it to stand out from the competition. He also adds that it will differentiate itself with access to “The best deals, the availability of long-term capital, operating expertise, and quick execution.” WPP CEO Martin Sorrell, said that “WPP's investment in sports and sports content through Bruin Sports Capital is an important part of its strategy.” He also believes Pyne himself is a major boon to the company and a “Major talent in the sports business world.” He believes that, based on Pyne's track record, “The clients who work with WPP's operating companies will be given access to many high-value media and sponsorship opportunities.”

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Bruin Sports Capital founder George Pyne

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