PvNew | Internet Celebrity Wiki

Agency Aftershocks: What Does CAA-ICM Deal Mean for Future of Talent Representation?

  2024-03-11 varietyMatt Donnelly38800
Introduction

An earthquake hit Hollywood at 8:17 a.m. PT on Sept. 27, but it didn’t register on the Richter scale.Leaders of CAA and

Agency Aftershocks: What Does CAA-ICM Deal Mean for Future of Talent Representation?

An earthquake hit Hollywood at 8:17 a.m. PT on Sept. 27, but it didn’t register on the Richter scale.

Leaders of CAA and ICM Partners spent the weekend in marathon negotiating sessions leading up to that precise moment early Monday when the agreement was clinched for CAA to acquire its smaller rival. The acquisition promises to shrink Hollywood’s Big Four talent agency landscape down to a Big Three, if regulators approve it.

The news caught agency insiders by surprise and rocked Monday morning staff meetings all over town. The immediate takeaway was that no corner of entertainment is immune to the consolidation gripping media and entertainment.

More specifically, the tie-up of CAA and ICM promises to deliver aftershocks across the talent representation arena. Industry insiders note how profoundly the talent rep market has been carved up in recent years into superpowers (CAA and WME), with UTA right behind at No. 3 — and busy boutiques (Verve and Innovative). The large-ish agency along the lines of Gersh, APA or Paradigm seems to be an endangered species. UTA’s next moves will be closely watched for sure.

“For years now, you’ve had the three major players in CAA, WME and UTA,” says one talent agency leader, speaking on the condition of anonymity. “ICM was close behind but not in the same category. Now there’s no runner-up. This is what consolidation does to any business in this country — it eliminates the runner-up.”

CAA getting “even just a bit bigger,” according to another top dealmaker, will lead to disruption. It may force the smaller companies to seek their own acquisitions or band together in efforts to compete with monoliths like a hulked-up CAA or WME parent company Endeavor, which has defied the doubters and performed respectably as a public entity since its IPO in April.

As many predicted, the smaller agencies are messaging the CAA transaction as an opportunity for them to poach defecting agents and their clients. Any merger of this size will result in significant layoffs, which CAA managing director Bryan Lourd tells PvNew is now under “careful and measured” review. While in the long term, some are skeptical that the smaller talent shops will be able to stay afloat as independents, the boutiques are responding with optimism.

“We’re excited about the opportunity this creates for our friends and creates for us,” says Verve Talent & Literary co-founder Bryan Besser. “We are sticking to the path we’re on, the one that’s been working for us, which is to go left when most go right.”

ICM Partners has been on the block for years, some skeptics of the deal point out, and was particularly hobbled by the Writers Guild of America mandate to cease packaging fees around series and movies starring its clients, a major revenue source. CAA’s acquisition of the company may well be a public exercise in proving it can handle a significant M&A transaction on the road to an IPO. Still, Lourd tells PvNew that taking the enlarged agency public is “not at the front of our brains right now.”

At the heart of any agency is client services, which means finding jobs and landing paydays for actors, writers, directors and other artists responsible for content creation. Over the past decade, though, those Big Three agencies have chased private equity funding and aggressive diversification. CAA will emphasize that it bought ICM to add heft in traditional areas such as TV lit and publishing. But CAA’s rivals will also spin the agency as too big to give the kind of TLC that major stars demand.

CAA president Richard Lovett says the group “looks at our business as a very intimate thing. That’s the truth of how we experience it. What is indisputable, though, is that we have more resources for clients as a result of working together. We have been very clear for quite a long time about what our agenda is — that is serving clients and understanding this moment of gigantic shift and change in the business environment. Clients need really strong, committed advocacy.”

Lourd, who became a vocal advocate this summer on behalf of his client Scarlett Johansson in her legal battle with Disney over her compensation for “Black Widow,” hinted that this dispute is only the beginning of the new-world challenges for talent. As the content producers and distributors enter a new stratosphere of consolidated power, CAA wants to send the message that it can flex its muscle through its access to many of the biggest names in the industry.

“We’re optimistic; we’re not remotely negative,” Lourd says. “It’s incredibly difficult right now, as people on both sides of the financiers, the distributors, the marketing companies analyze what does and doesn’t matter to them. The one thing that’s certain is every person we represent, everyone we work with, is more important than they’ve ever been. And,” he adds of the acquisition, “we’re doing this to rise to that need to be great and be a new agency for the future.”

Cynthia Littleton contributed to this report.

(By/Matt Donnelly)
 
 
Dislike 0 Report 0 Favorite 0 Awards 0 Comments 0
0 itemsRelated comments
 

(c)2019-2024 PvNew All Rights Reserved |