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CORRESP
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filename1.htm

      Unassociated Document

    July
      2,
      2007

    Mr.
      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, 2006 (the “2006 Form
      10-K”)

    Filed
      March 16, 2007

    Form
      10-Q for Fiscal Quarter March 31, 2007

    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 June 12, 2007 (the “June 12 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 June 12 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, 2006

    Note
      4
      - Acquisitions, page 54

              1.

              We
                note your response to prior comment 2. It is not clear to us why
                you have
                cited EITF 96-16 and EITF 97-2 as a basis for consolidation of Mono
                Advertising, LLC. In this regard, EITF 96-16 addresses a situation
                where
                the majority investor is not able to consolidate an entity due to
                certain
                rights granted to a minority shareholder. Since you are the minority
                shareholder of Mono, this issue does not appear to be within the
                scope of
                EITF 96-16. In addition, EITF 97-2 addresses the accounting for
                contractual arrangements between a management entity and an operations
                entity. As it appears that your contractual agreement is between
                the
                owners of Mono, it is unclear to us why you believe this guidance
                applies
                to your fact pattern. If you continue to believe that consolidation
                of
                Mono is appropriate, please provide us with a more detailed analysis
                of
                your basis for this policy as well as a copy of the operating agreement
                that sets forth each owner’s rights and
                obligations.

          Mr.
            Larry
            Spirgel

          Securities
            and Exchange Commission

          July
            2,
            2007

          Page
            2
of
            5

    SUMMARY

    The
      Company has cited EITF 96-16 and EITF 97-2 as guidance in determining that
      the
      majority shareholders do not have control of Mono and thus should not
      consolidate Mono. Furthermore, as described in greater detail below, control
      rests with the minority shareholder, the Company, and based on this control
      the
      Company has consolidated Mono.

    In
      the
      context of EITF 97-2, the Company believes that it is the management entity
      (i.e. the entity with the controlling votes) and the operations entity is Mono.
      Through the “Second Amended and Restated Operating Agreement of Mono Advertising
      LLC”, the Company has a contractual arrangement with the other equity holders
      and Mono, the operating company. The Company has determined that, as a holding
      company with significant decision making and control rights (as described
      below), the Company functions as a management entity under EITF 97-2.

    DETAILED
      ANALYSIS

    The
      Company and Founding Partners as “Members” and Mono LLC have entered into the
      Second Amended and Restated Operating Agreement of Mono Advertising LLC (the
      “Agreement”), dated July 1, 2006. Article IV of the Agreement outlines the
      responsibilities and rights of the Members regarding the management of Mono.
      Section 4.3 defines the Managers to be three representatives of the Company
      and
      three from the Founders. The three representatives of the Company are Rob
      Dickson - Managing Director, Ray Forzley - Director of Corporate Development
      and
      Steven Berns - President and CFO. Section 4.10 provides the Company with the
      tie
      breaking vote in all matters. Section 4.1 outlines the specific rights and
      responsibilities of the Company, the Founders and the Managers. This Section
      4.1
      describes the control rights the Company has such as approval of the operating
      and capital budget decisions, the ability to terminate and to set the
      compensation of management (including the Founders) responsible for implementing
      Mono’s policies and procedures. Section 4.1 (e) requires participation by Mono
      in the Company’s cash management program, which requires all of Mono’s cash
      receipts to be swept daily into the Company’s concentration bank
      account.

        Mr.
          Larry
          Spirgel
          Securities
            and Exchange Commission

          July
            2,
            2007

          Page
            3
of
            5

    EITF
      97-2:

              ·

              EITF
                97-2 provides guidance that “A controlling financial interest exists if,
                for a requisite period of time, the PPM has “control” over the physician
                practice and has a “financial interest” in the physicians’ practice that
                meets all six of the requirements listed below.” Application of these
                requirements is as follows: (Assume the Company is the PPM and Mono
                is the
                physician practice.)

    Term
      - The contractual arrangement between the Company and Mono:

              1.

              Has
                a term that is either (a) the entire remaining legal life of Mono
                or (b) a
                period of 10 years or more.
                Mono is a LLC which is expected to have an indefinite life, thus
                the
                contractual arrangement between the Company and Mono is deemed to
                have an
                indefinite life. (See Section 1.5.)

              2.

              Is
                not terminable by Mono except in the case of gross negligence, fraud,
                or
                other illegal acts by the Company, or bankruptcy of the
                Company.
                Mono can not terminate the Agreement with the Company. The Agreement
                can
                only be terminated upon dissolution/liquidation of Mono by the Company
                and
                the Founders. (See Article IX.)

    Control
      - The Company has exclusive authority over all decision making related to both
      of the following:

              3.

              Ongoing,
                major, or central operations of Mono, except for providing marketing
                communication services.
                In
                accordance with the Agreement, the Founders shall report directly
                to the
                Mono Board of Members and to the Company. The Founders and other
                Managers
                are to carry out their duties, as may be assigned to them from time
                to
                time by or under the authority of the Mono Board of Members and/or
                the
                Company. During their term, the Founders and Managers shall have
                the
                responsibility (subject to the term of the authority of the Board
                of
                Members and the Company and the parameters of the current operating
                and
                capital budgets including cash flow and the incurrence of debt) for
                the
                general management of the business and together with management of
                the
                Company, the long-term planning of the Mono. As a result, the Company
                has
                authority over decision making related to the ongoing, central operations
                of the business. This is authority is derived from the Company’s tie
                breaking vote. (See Section 4.1.)

              4.

              Total
                compensation of the employees of Mono, as well as the ability to
                establish
                and implement guidelines for the selection, hiring and firing of
                them.
                The Agreement provides for the Company to approve compensation and
                the
                hiring and firing of employees. This approval right is derived from
                the
                Company’s tie breaking vote. (See Section 4.1 (a) (xii) and (b)
                (iii)-(v).)

        Mr.
          Larry
          Spirgel
          Securities
            and Exchange Commission

          July
            2,
            2007

          Page
            4
of
            5

    Financial
      Interest - The Company must have significant financial interest in Mono that
      meets both of these criteria:

              5.

              Is
                unilaterally salable or transferable by the Company. According
                to the Agreement, the Company’s membership interests may be sold or
                transferred by the Company without the consent of the Founders and
                no
                membership interest shall be sold or transferred by the founders
                without
                the consent of the Company. (See Section
                10.1.)

              6.

              Provides
                the Company with the right to receive income, both as ongoing fees
                and as
                proceeds from the sale of its interest in Mono, in an amount that
                fluctuates based on the operations of Mono and the change in the
                fair
                value thereof.
                Profits are split between the equity holders based on current ownership
                interests based the current performance and operating results of
                Mono.
                (See Section 3.3.)

    CONCLUSION

    Based
      on
      the analysis set forth above, the Company has satisfied the contractual criteria
      of EITF 97-2 for consolidating Mono.

    The
      Company has included as an exhibit to this letter the Second Amended and
      Restated Operating Agreement of Mono Advertising LLC.

    *
*
*
*
*
*
*

    Please
      direct any questions concerning the above responses to the undersigned
      (telephone: (646) 429-1803; fax: (212) 937-4365), with a copy to Ethan
      Klingsberg (Cleary Gottlieb Steen & Hamilton LLP; fax: (212)
      225-3999).

              Very
                truly yours,

            /s/

              Michael
                Sabatino

              Chief
                Accounting Officer

        Mr.
          Larry Spirgel
          Securities
            and Exchange Commission

          July
            2,
            2007

          Page 5
            of
            5

    Enclosures

            cc:

              Melissa
                Hauber

    Robert
      S.
      Littlepage, Jr.

    Securities
      and Exchange Commission

    Miles
      S.
      Nadal, Chairman and Chief Executive Officer

    Mitchel
      Gendel, General Counsel & Corporate Secretary

    Steven
      Berns, President and Chief Accounting Officer

    Members
      of the Audit Committee of Board of Directors of MDC Partners Inc.

    Joseph
      Klausner, BDO Seidman LLP

    Ethan
      Klingsberg, Esq., Cleary Gottlieb Steen & Hamilton LLP