Talent agencies and booming youth business

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In May, a mini-earthquake rocked the small but fragile world of children's talent agencies. Mitchell Gossett, one of the best-known kids reps and the man behind the career of Miley Cyrus, left his longtime home at Cunningham Escott Slevin Doherty (CESD) for powerhouse UTA.

At 15, Cyrus, the lead of Disney Channel's "Hannah Montana," is not only a household name, she is the force behind a billion-dollar empire of television programming, chart-topping albums and a huge concert tour. A slightly revealing Vanity Fair spread of Cyrus had alone caused analysts to fear that the Walt Disney Co.'s stock might tumble.

So while Gossett's move was good news for UTA, it was a disaster for CESD, which also lost other Gossett clients, including Taylor Momsen (the CW's "Gossip Girl") and Victoria Justice (Nickelodeon's upcoming "Spectacular!"). The agency will continue to reap revenues from Cyrus for years to come based on contracts already in place, but her future income will now go to Gossett and UTA. And if Cyrus manages to make the difficult transition from teen phenomenon to adult star, as many expect, that could mean hundreds of millions of dollars in lost fees for CESD.

UTA's entry into the youth market marks a shift in the direction many of the Big Five agencies are taking as they seek to expand their bases, replace revenues from declining star salaries and tap into the burgeoning appetite for younger performers.

"The industry to some extent is shrinking," Gossett says. "There are fewer jobs. So like General Motors did, you just swallow up your competitors as much as you can."

CESD declined to comment.

Prior to Gossett's arrival, UTA had no children's department; now, it has an emerging talent division -- just like CAA, which represents some of the busiest young stars in the business, including Saoirse Ronan (2007's "Atonement"), Selena Gomez (Disney Channel's "Wizards of Waverly Place"), Demi Lovato (Disney Channel's "Camp Rock") and the Jonas Brothers.

For some of the boutique agencies that specialize in child actors, these major agencies' growing footprint in their terrain is a cause for concern.

"This is one of the only businesses I know where success breeds disloyalty," says Jody Alexander, co-director of the young people's department at Kazarian/Spencer & Associates, which represents both adults and children.

Boutique agencies are accustomed to young clients changing representation once they reach adulthood. Leonardo DiCaprio did it, as did Hilary Swank. Tobey Maguire recently left his longtime agent, Leslie Siebert of the Gersh Agency, who had been indelibly associated with his career and who had negotiated the multimillion-dollar deal for him to star in "Spider-Man."

But it's another matter when agents themselves depart with a raft of young talents, as they can wipe out entire departments in one fell swoop.

"Because of Mitchell, (CESD was) doing really well in their theatrical department," says one longtime children's agent. "And now that he's gone, it's going to take a long time for them to build."

The agent sums up the boutique community's reaction: "He'd better hang on to (his clients) or he's going to be out of there. Just because he went there doesn't make him a better agent."

Smaller agencies of all stripes have found themselves vulnerable lately. ICM bought the Broder Webb Chervin Silbermann Uffner Agency, in part to bolster its television department. Paradigm absorbed the Writers & Artists Agency, as well as its clients and agents.

But children's agencies are now finding they are not immune to seeing their own agents poached.

"We've now had it happen three times!" says Cindy Osbrink of the Osbrink Agency, who represents such young stars as Tyler James Williams (the CW's "Everybody Hates Chris"), Dakota Fanning and her younger sister, Elle.

"Seven years ago, when the teen (market was expanding rapidly), we decided to put the teens separate and have an agent do that, and one of the bigger agencies came and took her, and she took the whole department with her," Osbrink says. "Then this just recently happened again. We give them the talent that already has the resume, so of course they're going to be successful, and then they take them and go to a bigger agency."

Indeed, a number of agents who handle up-and-coming young talent have recently departed smaller firms for the majors.

In May, Warren Zavala left the Gersh Agency for CAA, taking with him 24-year-old Paul Dano (2006's "Little Miss Sunshine"). At the end of 2006, Sarah Shyn in turn left Osbrink for Gersh, along with 22-year-old Elijah Kelley (2007's "Hairspray") and 19-year-old Scout Taylor-Compton (2007's "Halloween"). Last summer, agent Louise Ward left Innovative Artists for William Morris, taking with her Channing Tatum (2006's "Step Up"), now 28. (Innovative still has a relationship with Tatum, with agent Maury DiMauro handling the thesp's commercial work, while WMA's Ward handles the talent side.)

And in May 2007, well-known youth agent Bonnie Liedtke left TalentWorks for William Morris. While her move involved more than a simple jump to a bigger firm -- unrelated circumstances resulted in litigation that is ongoing -- she took with her a number of young stars, including Zac Efron and Corbin Bleu (Disney Channel's "High School Musical").

It's only natural that majors are becoming more aggressive about the youth market, because these days, that's where the money is.

"In the past, kids shows had always run hot and cold," says Toni Casala, president of Children in Film, an organization that provides information and networking resources to families with children working in entertainment. "Now that the kids shows have found a home on cable (such as Disney Channel and Nickelodeon), the faucet doesn't necessarily have to turn off. Producers are running with the trends, and the agents want a piece of the action."

The action is increasingly being found in the youth market not only because of the explosion in youth programming, but also because of the difficulty in creating long-term careers for adult actors.

"People need to be into revenue markets, and revenue comes from young up-and-coming actors because that's where the stars come from," adds Darryl Marshak, whose young clients include Dana Davis (Sony's "Prom Night") and Ryne Sanborn ("High School Musical").

Marshak left agenting to become a manager, he says, because of the vulnerability children's agencies face from their larger brethren. If the trend

continues, he says, "it means bankruptcy. It means going out of business, which is why I became a manager. The writing is on the wall."

To avoid that, some agencies are sharing their younger clients with the powerhouses, a move that got under way when one of the doyennes of the children's agency world, the late Iris Burton, teamed with Endeavor in 2001, to co-represent a number of her clients, including Joaquin Phoenix.

"(Burton knew) that she would end up losing the clients to the big companies," Marshak explains, "so she made a split arrangement with (them)."

Now, that approach is growing in popularity.

"I see a lot more sharing of revenue between agencies," says entertainment lawyer Peter Dekom of Weissmann Wolff Bergman Coleman Grodin & Evall, attributing the proliferation of split-representation deals to a desire to "maintain decent relationships in a very, very difficult business."

No agent is happy about losing half his 10% fee to a competitor, but the shared representation has certain advantages. The larger agencies may be more familiar with complex business dealings, the smaller ones with the hand-holding and family dynamics.

"The client ends up feeling safe because they have a lot of different voices on their team," says ICM agent Meredith Wechter, who shares representation of both Abigail and Spencer Breslin with Coast to Coast Talent Group. "They have the agent that found them originally, got them to this point, and they bring that, and then you have the bigger agency that they're working with as well. I think that it only benefits them that they have more voices and more people involved."

For the boutiques, such agreements mean that they can at least stay in the picture with a young client for a specified period of time. And split representation also serves as a nod of respect for the prodigious effort smaller agencies invest in getting green kids started.   

"The bigger agencies starting kids? I don't think that's going to happen," says Vivian Hollander, president of Hollander Talent Group. "We're in the thick of what the kids are doing, and the casting agents know we know what we're doing."

Whether the kids themselves do is, of course, the great unanswered question. If it is hard enough dealing with adult talent, it is even more difficult to manage younger performers who are less savvy to the business and more open to others' influence. In a rapidly changing environment, even veterans admit they are facing a new set of challenges.

Somehow, Osbrink says with a laugh, "I'm going to figure this out."
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