SecProbe.io

CORRESP
1
filename1.htm

January
23, 2017

Via
Edgar

Mr.
Larry Spirgel

Mr.
Robert Littlepage

Division
of Corporation Finance Securities and Exchange Commission 100 F Street N.E.

Washington,
D.C. 20549

 RE: MDC Partners Inc.

Form
10-K for Fiscal Year Ended December 31, 2015

Filed
February 26, 2016

SEC Response
Dated October 5, 2016

File
No. 001-13718

Dear Mr. Spirgel and Mr. Littlepage:

Set forth below
is the response of MDC Partners Inc. (the “Company” or “MDC”) to the correspondence of the Staff of the
Division of Corporation Finance of the Securities and Exchange Commission (the “Staff”, the “Commission”,
or “SEC”), which was set forth in your letter dated December 16, 2016 regarding the Company's above-referenced filing.

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Form 10-K for Fiscal Year Ended December 31,
2015

14. Segment Information, page 75

 1. We have reviewed your
response to comment three and are unable to clearly determine how you concluded that the individual firms (operating segments)
grouped within the advertising and communications reportable segment are economically similar. ASC 280- 10-50-11 requires that
“two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the
objective and principles of subtopic ASC 280-10-10-1, if the segments have similar economic characteristics and
if the segments are similar in all the following areas: nature of products and services; the nature of production processes; the
type and class of customers; the methods used to distribute products and services; and the regulatory environment. While we do
not expect to have a view that each firm is its own reportable segment because historical gross margins vary between firms, we
need a sufficient basis to not object to your aggregation of operating segments. Your explanations attempting to reconcile gross
margin and EBITDA dissimilarities generally describe the costs of each operating segment as being the differentiating factor that
will ultimately adjust in future periods so that long-term gross margins are more similar. However the revenue impact on gross
margins is not sufficiently addressed as well as other qualitative factors in ASC 280-10-50-11. Please address the following:

 a. Are we to understand that all the firms in the reportable segment serve the same customers
in the same markets worldwide or is there some customer or service offering unique to some or all of the firms? If firms serve
the same markets, should the margins be the same across the firms? For example, are customers making distinctions by firm brand,
reputation, product quality or other characteristics so that one firm can demand a higher premium for its services than another?

 b. If firms are not serving the same markets, please provide us a description of the unique
markets and how they are segmented. For example, do firms serve different types of customers based on size, industry, niche, geography
or some other stratification?

 c. Please demonstrate and explain for us how integrated advertising, media
specialty, and public relations result in economically similar products and services, including margins, product and service delivery
and types of customers.

 d. Since media specialty is a new business, tell us how you determined that it will have the
same long-term economic margin as your traditional advertising businesses.

The
Partner Firms are marketing service providers. As discussed in our October 31, 2016 response, EBITDA margin is a key performance
metric our CODM uses to assess performance of and allocate resources to the Partner Firms.

The
costs at the Partner Firms are similar across all Partner Firms and are significant to the margins. The principal costs are variable
(i.e., people/facilities) and the Company manages the costs at each Partner Firm in response to changes in performance resulting,
for example, from client wins/losses.

The
Partner Firms provide a range of service offerings, which in some cases are the same or similar service offerings. The core or
principal service offerings are among the factors that distinguish the Partner Firms from each other, although no Partner Firm
manages its business around the service offerings. The manner in which the services are provided is generally consistent across
the Partner Firms and this is not a factor that distinguishes the Partner Firms from each other.

The
core or principal service offerings provided by the Partner Firms in the Reportable Segment relate principally to advertising,
public relations (PR), and media services. Examples of these service offerings include the following:

    Advertising
    Public Relations
    Media

    Advertising and Marketing Services
    Consumer Media Relations
    Media Planning, Buying and Investment

    Digital, Mobile and Social Media
    Digital, Mobile, and Social Media
    Digital, Mobile & Social Media

    Content Creation and Marketing
    Content Creation and Marketing

        Content Creation

    Insights & Analytics
    Insights & Analytics
    Insights, Analytics & Market Research

    Communications Strategy
    Corporate Communications
    Communications Strategy & Planning

    Branding & Design
    Crisis / Issue Management
    Advertising Technology

    Experiential & Promotions
    Experiential Marketing

    Production
    Production

    Influencer Marketing
    Influencer Marketing

    Consumer Media Relations

    Media Planning, Buying and Investment

As indicated, these core or principal service
offerings are similar and/or complementary in many respects and the Partner Firms that provide these service offerings both compete
and/or collaborate with each other for new business. For example, the integrated advertising agencies provide some media services
and compete/collaborate with the media agencies for new business. Similarly, the PR firms and media agencies provide content creation
and social media marketing services and compete/collaborate with the integrated advertising agencies for new business.

The clients that acquire these service offerings
differ with respect to geography, industry specialization, and size. However, no Partner Firm provides service offerings specific
to clients in any specific geography, industry, or of specific size and no Partner Firm manages its business along these lines.
Further, the concentration of clients in any specific geography, industry, or of specific size at individual Partner Firms at any
particular point in time will change over time (for example, with client wins/losses) and over the long term this does not result
in significant differences in the performance of individual Partner Firms relative to other Partner Firms.

Individual Partner Firms differ to varying
degrees with respect to branding, size, market positioning, and other factors and these differences may provide some Partner Firms
a competitive advantage (or disadvantage) relative to other Partner Firms. However, the marketing services industry is a competitive
industry. The effect of these differences on revenue and margins have a tendency to normalize over the long term (for example,
due to competition for talent and/or business and the need for additional investment to support the related revenue growth) and
these differences do not result in significant differences in the performance of individual Partner Firms relative to other Partner
Firms.

Management’s judgment is that overall
the Partner Firms in the Reportable Segment are economically similar. The long-term expected margins at the Partner Firms track
relatively closely over time as presented in the October 31, 2016 response Further, the Partner Firms are similar with respect
to the nature of the services they provide, the manner in which they provide the services, and the clients that acquire the services.
These services are the core or primary services that are significant to the Company’s performance and disclosure about the
performance of these Partner Firms as a group provides investors with information needed to assess the Company’s performance
and prospects for future net cash flows.

At this point, the media
business is economically similar to the other Partner Firms.  The historical margins at the media specialist agencies
tracked relatively closely to the other Partner Firms before they were merged into a single media business and based on the
performance of these agencies as a single media business this trending is expected to continue.  Further, the service
offerings and clients that acquire these service offerings are similar across other of the Partner Firms.  As indicated
in the table above, some of the advertising Partner Firms also provide media services as part of their integrated service
offering that they provide to their clients, thus reinforcing the similarity of economic characteristics between the media and
advertising Partner Firms.  Given these similarities, the media business is expected to have the same future prospects
as the other Partner Firms such that separate disclosure will not add significantly to an investor’s understanding of
the Company’s performance and prospects for future net cash flows.  However, the media business is evolving and
the Company is monitoring the media business for changes that could set the media business apart from the other Partner Firms
and indicate the need for a separate Reportable Segment to provide separate disclosure.

 2. You have described eighteen of the operating segments
that you have aggregated by their distinction as “comprehensive array of marketing and communication service for clients
both domestically and globally and are comprised of integrated advertising and media specialist agencies as well as public relations
firm.” However, you have identified a “Primary Discipline” for each of these firms as Advertising, Media, or
PR. Additionally, it appears that some entities in the “other” category could also have some or similar attributes.
Furthermore, it is not clear how your aggregation is consistent with the principle of ASC 280 because it is unclear how the bifurcation
between the reportable segment and other partner firms helps users to better understand the public entity performance, assess
prospects of future net cash flows and make more informed judgments. Please provide us either with some other aggregation basis
that meets these objectives or provide an adequate analysis of how your aggregation in the reportable segment and other category
meets these objectives. Please clarify how your assessment of Primary Discipline is considered in your analysis and provide support
for your analysis.

The principal service offerings provided by
the Partner Firms in the Other Segment vary. The service offerings include some that relate to advertising, PR, and media services
but these service offerings are not the Company’s core or primary service offerings. Rather, these specialized service offerings
generally are complementary and are provided to round out the service offerings. Many of these service offerings are project-based
with a high level of billable expenses and thus pass-thru revenue, which has a direct impact on margins. In addition, there are
some areas of specialization and pricing that lead to a more targeted client base (for example, shareholder proxy services, mobile
strategy and development, and rapid and complex activations). Performance and long-term growth prospects, therefore, are different
for these Partner Firms than for the Partner Firms in the Reportable Segment and at this point, there is no individual Partner
Firm or group of Partner Firms with similar economic characteristics that are significant to the Company’s performance for
which separate disclosure would aid an investor’s understanding of the Company’s performance and future prospects for
net cash flows. However, some of the Partner Firm business models are evolving and other Partner Firms are newly acquired and/or
newly formed with operations that are in the process of being integrated into the portfolio. The Company will continue to monitor
these Partner Firms for changes that could set them apart from the other Partner Firms and indicate the need for a separate Reportable
Segment to provide separate disclosures.

Form
10-Q for Fiscal Quarter Ended September 30, 2016

Three
Months Ended September 30, 2016, Compared to Three Months Ended September 30, 2015, page 38

Nine
Months Ended September 30, 2016, Compared to Nine Months Ended September 30, 2015, page 45

 3. We note your responses to comments one and two. In
order to provide greater transparency to your investors on how you define and measure organic revenue growth/ decline, please

 a. Disclose, if true, that organic revenue growth/decline,
after foreign exchange adjustments on a constant currency basis, reflects (a) any change in revenues of partner firms which you
have held throughout each of the comparable periods presented (i.e., same store sales) and (b) for acquisitions during the current
year, the revenue effect from such acquisitions as if the acquisitions had been owned during the equivalent period in the prior
year and (c) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during
that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues
for the applicable periods. Please also consider revising your disclosure on page 31.

 b. Additionally please clarify in greater detail how revenues from businesses divested during
each of the periods presented impact your calculation of organic revenue growth/decline. Please disaggregate the effect of dispositions
from acquisitions, if material. Please also consider revising your disclosure on page 31.

 c. Revise the tabular caption for “Acquisitions (Dispositions), net” to “Non-GAAP
Acquisitions (Dispositions), net” within the organic revenue growth/ decline table.

 d. Start your reconciliation of “Non-GAAP Acquisitions (Dispositions), net” with
the directly comparable GAAP measure, “Revenue from Acquisitions.”

 e. Revise the caption for “Revenue Growth (Decline), net” (within the table reconciling
Revenue from Acquisitions) to clarify its nature, with a corresponding footnote identifying its components and describing how it
was derived.

 f. Please consider revising your earnings release to comply with the above comments as applicable.

The
Company confirms that we will revise our disclosure on how we define organic revenue growth/decline to reflect each of the points
noted above.

4. As presented, organic revenue growth/ decline and the impact of acquisitions constitute non-GAAP
measures. Please revise your MD&A to provide greater prominence on explanations of change in revenue based on measures of organic
revenue and acquisition revenue calculated in accordance with GAAP.

The Company confirms that we will revise our MD&A to provide greater prominence on explanations of the change in revenue based
on measures of organic revenue and acquisition revenue calculated in accordance with GAAP.

Form
8-K filed November 3, 2016 Exhibit 99.1

Financial
Guidance, page 2

 5. We note that you omit a quantitative reconciliation
with respect to your forward looking non-GAAP guidance, but you do not provide the disclosure required when the reconciliation
is omitted. In your next earnings release, please follow the guidance in Question 102.10 of the updated Non-GAAP Compliance and
Disclosure Interpretations issued on May 17, 2016.

The
Company will provide additional disclosures required by the guidance in Question 102.10 of the updated Non-GAAP Compliance and
Disclosure Interpretations issued on May 17, 2016.

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Please
direct any questions concerning the above responses to the undersigned (telephone: (646) 429-1818; fax: (212) 93