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October 28, 2005

Larry Spirgel

Assistant Director

Mail Stop 0407

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

      Re:

      MDC Partners Inc.

Form 10-K for Fiscal Year Ended December 31, 2004 (the "2004 Form
10-K")

Filed April 18, 2005

Form 10-Q for Fiscal Quarter Ended June 30, 2005 (the "June 30 Form
10-Q")

File No. 1-13178

Dear Mr. Spirgel:

Set forth below are the responses of MDC Partners Inc. (the "Company") to
the comments of the Staff of the Division of Corporation Finance, which were set
forth in your letter dated September 30, 2005 (the "September 30 Letter")
regarding the Company's above-referenced filings. The responses to the Staff's
comments are provided in the order in which the comments were set out in the
September 30 Letter and are numbered correspondingly.

The Staff's comments, indicated by bold, are followed by responses on
behalf of the Company. Page references below are to the applicable Exchange Act
filing, as the case may be.

Form 10-K for Fiscal Year Ended December 31, 2004

Note 16 — Gain on Sale of Assets and Settlement of Long-term Debt, page
94

      1.

      In your response to prior comment 2, you state that in analyzing
      the embedded derivatives you have identified the following: a call option
      that you, as the issuer, wrote and a put option that you purchased. You
      note that both options are contingent upon the same conditions
      occurring/not occurring, and both have the same strike price. You also
      indicate that prior to either the put or call being exercised, you have
      agreed to pay the holder of the Exchangeable Securities the equivalent of
      the distribution paid on the CD1 Units, subject to a floor of 3% per
      annum. You have analyzed these in the aggregate, and determined that you
      have a "synthetic total return swap". You have then determined
      that this "synthetic total return swap" qualifies as a non-option based
      derivative

It is unclear to us how you determined that this is a "synthetic total
return swap" in light of the minimum payment (the floor of 3% per annum). A
typical total return swap would have the Exchangeable Securities bear interest
at an adjustable rate equal to the

      1

Mr. Larry Spirgel

Securities and Exchange Commission

October 28, 2005

Page 2 of 16

equivalent percentage of the actual monthly distribution paid on the CDI
unit. Tell us the consideration you gave to the 3% floor in determining that
this was a "synthetic total return swap."

We concluded that the floor of 3% per annum was a non-substantive feature
and did not alter our determination of the "synthetic total return swap" created
by the call option and put option embedded in the Exchangeable Debentures and
the payment of interest under the Exchangeable Debentures was equivalent to the
monthly distribution of the CDI units (subject to the 3% floor).

The debentures were issued in December 1, 2003 and were expected to be
exchanged by the holders in the very near future when the Exchange Events had
occurred. In fact, at the time of issuing the Exchangeable Debentures, the
Company believed that the CDI financial targets would be met and therefore the
Company believed that it was merely the passage of the time and the issuance of
the audited financial statements for the year ended December 31, 2003 that was
pending in order for the exchange to take place. The actual returns to the
Exchangeable Debenture holders were far in excess of the 3% floor for the period
from the inception on May 29, 2003 to December 31, 2003. For this period, the
Fund had made cash distributions representing an annualized return of 13.5%, far
in excess of the 3% floor provided for by the Exchangeable Securities. In
addition, the historical estimated return for the year ended December 31, 2002,
as disclosed in the Fund's prospectus, was 13.9%. Given the high rate of
historical returns and the anticipation of equivalent high returns in the period
that the Exchangeable Debentures were to remain outstanding, the 3% floor was
considered non-substantive.

We have had discussions with the underwriter (CIBC) of the Exchangeable
Debentures regarding the 3% floor. They indicated that the 3% floor was included
to enable the security to be classified as a debt instrument under the tax
regulations. The underwriters stated that the rate was deemed insignificant and
added no value to the Exchangeable Debenture. As further evidence that the floor
had no value on the date of issue; the underwriter indicated that if the 3%
floor did have value, the Exchangeable Debenture would have been issued at a
premium to the price of the CDI unit on the date of issue. This was not the case
as the Exchangeable Debenture was issued at a price of $8.75 when the CDI units
were trading at $9.50.

We determined that there were three embedded derivatives that required
separate accounting under FASB 133, and a host contract as follows:

      1.

      MDC, as the issuer, has written a call option — i.e. MDC has given
      the holder of the Exchangeable Securities the right, but not the
      obligation, to exchange (call) the
      Exchangeable Securities for CDI Units, once an Exchange Event has occurred

      2.

      MDC purchased a put option — i.e., MDC has obtained from the holder
      of the Exchangeable Securities the right, but not the obligation, to
      redeem the Exchangeable Securities in return for CDI Units, once an
      Exchange Event has occurred. Both options are contingent upon the same

      2

Mr. Larry Spirgel

Securities and Exchange Commission

October 28, 2005

Page 3 of 16

    conditions occurring/not occurring. Both have the same strike price and the same maturity date; and neither is required to be exercised before maturity. As discussed in our response to question 2 below, we concluded that these two options are required to be considered as on forward contract under DIG Issue K3.

      3.

      Prior to either the call or put being exercised, MDC has agreed to pay the holders of the
      Exchangeable Securities the equivalent of the distributions paid on the
      CDI Units, subject to floor of 3% per annum. We viewed
      this as being, in substance, a swap contract where the Company was
      committed to pay the distributions paid on the CDI Units, subject to floor
      of 3% per annum and receive floating-rate
  interest.

      4.

      The host was considered to be a floating rate debt
      contract.

We next considered DIG Issue B15, which states: "[Statement 133]
paragraph 12 does not permit an entity to account separately for more than one
derivative feature embedded in a single hybrid instrument. If a hybrid
instrument contains more than one embedded derivative feature that would
individually warrant separate accounting as a derivative instrument under
paragraph 12, those embedded derivative features must be bundled together as a
single, compound embedded derivative instrument that would then be bifurcated
and accounted for separately from the host contract under Statement 133.

      •

      An entity is not permitted to separate a compound embedded
      derivative instrument into components representing different risks (for
      example, based on the risks discussed in paragraphs 21(f) and 29(g)) and
      then account for those components separately.

      •

      If a compound embedded derivative instrument is comprised of
      multiple embedded derivative features that all involve the same risk
      exposure (for example, the risk of changes in market interest rates, the
      creditworthiness of the obligor, or foreign currency exchange rates), but
      those embedded derivative features differ from one another by including or
      excluding optionality or by including a different optionality exposure, an
      entity is also not permitted to separate that compound embedded derivative
      instrument into components that would be accounted for
      separately."

The synthetic derivate that DIG Issue B15 required us to construct was
composed of the following cash flows:

      1.

      An obligation to pay the holders of the Exchangeable Debentures the
      equivalent of the distributions paid on the CDI Units, subject to floor of
      3% per annum up until an "Exchange Event"
occurs;

      2.

      A deemed right to receive floating interest up until an "Exchange
      Event" occurs. This is a "deemed right" because it is not explicitly
      called for in the Exchangeable Debentures, but it offsets the deemed
      floating interest payable on the debt host
  contract.

      3

Mr. Larry Spirgel

Securities and Exchange Commission

October 28, 2005

Page 4 of 16

      3.

      Upon an "Exchange Event" occurring, an obligation to exchange the
      Exchangeable Debenture (i.e. the debt host contract) for the CDI
      Units.

We considered these cash flows to be, in substance, the economic
equivalent of a total return swap on the CDI Units. That is, the synthetic
embedded derivative passes the cash flows and changes in fair value attributable
to the CDI Units to the holders of the Exchangeable Debentures; and returns to
the company the interest and principle on a "plain vanilla" floating rate debt
instrument. Hence our description of this synthetic derivative as a "synthetic
total return swap" on the CDI Units.

      2.

      While we concur that DIG Issue B20 applies when the embedded
      derivative is a non-option derivative, it is unclear to us how you have
      met the criteria to consider this a non-option derivative. In light of the
      above comment, please provide us with additional information to support
      your conclusion.

We considered DIG Issue K3, interpretation 1:

"A combination of an embedded (nontransferable) purchased call (put)
option and an embedded (nontransferable) written put (call) option in a single
hybrid instrument that have the same terms (strike price, notional amount, and
exercise date) and same underlying and that are entered into contemporaneously
with the same counterparty should be considered as a single forward contract for
purposes of applying the provisions of Statement 133 and related guidance.
Those embedded options are in substance an embedded
forward contract because they (a) convey rights (to the
holder) and obligations (to the writer) that are equivalent from an economic and
risk perspective to an embedded forward contract and (b) cannot be separated
from the hybrid instrument in which they are embedded. Even though neither party
is required to exercise its purchased option, the result of the overall
structure is a hybrid instrument that will likely be redeemed at a point earlier
than its stated maturity. That result is expected by both the hybrid
instrument's issuer and investor regardless of whether the embedded feature that
triggers the redemption is in the form of two separate options or a single
forward contract. (However, if either party is required to exercise its
purchased "option" prior to the stated maturity date of the hybrid instrument,
the hybrid instrument should not be viewed for accounting purposes as containing
one or more embedded derivatives. In substance, the debtor [issuer] and creditor
[investor] have agreed to terms that accelerate the stated maturity of the
instrument and the exercise date of the "option" is essentially the hybrid's
actual maturity date. As a result, it is inappropriate to characterize the
hybrid instrument as containing two embedded option contracts that are
exercisable only on the actual maturity date or as containing an embedded
forward contract that is a combination of an embedded purchased call [put] and a
written put [call] with the same terms.)"

We believe that the combination of an embedded, nontransferable purchased
put option and an embedded nontransferable written call option in a single
hybrid instrument that have the same terms (strike price, notional amount, and
exercise date) and same underlying and that are entered into contemporaneously
with the same counterparty should be considered as a

      4

Mr. Larry Spirgel

Securities and Exchange Commission

October 28, 2005

Page 5 of 16

single forward contract for purposes of applying the provisions of
Statement 133 and related guidance and that consistent with DIG Issue K1, those
embedded options are in substance an embedded forward contract because they (a)
convey rights (to the holder) and obligations (to the writer) that are
equivalent from an economic and risk perspective to an embedded forward contract
and (b) cannot be separated from the hybrid instrument in which they are
embedded.

We considered DIG Issue B20 in allocating the fair value of the host debt
contract and to the non-option embedded derivative. DIG Issue B20 assumes that
the non-option embedded derivative is a plain-vanilla forward contract with
symmetrical risk exposure and that the hybrid instrument was newly entered into
by the parties to the contract.

DIG Issue B 20 requires that the terms of the derivative be determined in
a manner that results in its fair value being zero at the inception of the
hybrid instrument. The FASB staff's rationale for its conclusion in B20 is that
the cash flows of the hybrid instrument will be the same no matter what the
contractual terms of the embedded non-option derivative are. Thus, contractual
terms that produce a derivative's fair value other than zero at the inception of
the hybrid are arbitrary. Allowing entities to separate the embedded derivative
based on these terms would allow for the artificial allocation of the cost of
the hybrid between the derivative and host contract. This would affect the
timing of the subsequent recognition of these costs since the derivate is
marked-to-market with changes being reflected in earnings currently and the host
contract, a debt host in the above example, is carried at cost. Thus, different
arbitrary terms for the derivative will create different patterns of earnings
over the life of the hybrid contract even though its cash flows will always be
the same. B20 requires a consistent approach to the allocation of the hybrid's
costs and thus a consistent earnings pattern.

      3.

      You believe that fluctuations in the trading value of the
      Exchangeable Securities subsequent to their issuance are purely a result
      of the fair value of the embedded derivative instruments. This assertion
      appears to be based upon the fact that the debt host is a LIBOR based
      instrument, and that there have been no changes to your creditworthiness.
      Tell us the consideration you have given to the 3% floor in making this
      determination, as it would appear that the existence of a floor may result
      in a fixed rate debt host. If the Exchange Security was considered a fixed
      rate debt host, it would appear that a portion of the change in its value
      would be the result of changes in the embedded derivative, while a portion
      of the change would be due to changes in interest
  rates.

We considered DIG Issue B19, Identifying the
Characteristics of a Debt Host Contract, in our
conclusion that the host contract was a floating rate, short-tem debt
instrument.

DIG Issue B19 states that "the characteristics of a debt host contract
generally should be based on the stated or implied substantive terms of the
hybrid instrument. Those terms may include a fixed-rate, floating-rate,
zero-coupon, discount or premium, or some combination

      5

Mr. Larry Spirgel

Securities and Exchange Commission

October 28, 2005

Page 6 of 16

thereof. In the absence of stated or implied
terms, an entity may make its own determination of whether to account for the
debt host as a fixed-rate, floating-rate, or zero-coupon bond. That determination requires the application of judgment, whi