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In September, a talent agent at CAA was gearing up to try to poach a star client who is represented by ICM Partners. But after CAA’s blockbuster buy of its rival on Sept. 27, the agent put the pitch on hold. “We were told to stop all that kind of stuff for now,” this rep says, speaking on condition of anonymity. “Hopefully she’ll end up with us anyway.”
While there may be a detente between the Century City-based rival firms, business is anything but normal. ICM, which was founded in 1975 and at its height was one of the big three, representing major movie stars such as Mel Gibson, Julia Roberts, Arnold Schwarzenegger and Eddie Murphy, will be no more if the deal closes.
Even as the agency leaders tout a “partnership” that “bolsters our collective resources, expertise and relationships,” workers at both companies are fearful, sources tell The Hollywood Reporter. Many remember what happened after the merger of William Morris Agency and Endeavor in 2009, wherein the Ari Emanuel and Patrick Whitesell-led Endeavor, with 80 agents, combined with WMA, at 300 agents, creating WME. That deal resulted in many layoffs, especially on the WMA side.
Concerns this time have centered on redundancies first hitting support staff, assistants and attorneys. CAA, led by chiefs Bryan Lourd, Kevin Huvane and Richard Lovett, is looking to bolster its business with ICM’s strong TV clients (like hitmaker Shonda Rhimes), its book division and its sports clients (more than 800 at the ICM-owned Stellar Group). That may leave ICM agents repping actors, writers and directors more vulnerable to cuts.
In such a fear-filled environment, rival agencies have been fielding calls from nervous agents making overtures. Recently, ICM co-president Kevin Crotty was making calls to agents to soothe fears. (ICM has about 250 agents in total and, as part of the deal, ICM chairman Chris Silbermann will join CAA’s board.)
When the deal closes, there may be a whole level of future agents who have to reevaluate career plans. “What do the star assistants at CAA and ICM do now?” asks another rep who’s not at either firm. “What about the recently promoted agents who will not have to contend with new competition. All these people will have to push back their trajectories.” Another question: How will CAA, which has a more buttoned-up culture, take in ICM agents who may be personalities unto themselves and not as used to operating in a team-focused environment?
The merger plans have drawn notice from SAG-AFTRA, whose national executive director Duncan Crabtree-Ireland says the union will “carefully scrutinize” the deal, which is expected to close this year. And the CAA-ICM marriage arrives after all the major agencies made peace with the Writers Guild of America in a long-running feud and pledged to sunset packaging fees (in which reps are paid directly by a studio for attaching talent to a writer’s pitch) and cap ownership in affiliated production companies (like the CAA-backed wiip, the production company behind HBO’s Mare of Easttown that was sold to South Korea’s JTBC Studios in June).
Over the past decade, Hollywood’s four major talent firms — soon to be three: WME, CAA and UTA — have dramatically expanded as they’ve increasingly taken on outside investors. Private equity firm Silver Lake Partners made its initial investment in WME in 2012 and, after several more financing rounds, currently owns a majority stake in its publicly traded parent company, Endeavor. TPG Capital nabbed a 35 percent stake in CAA in 2010, before acquiring a controlling stake four years later. ICM Partners took on its first private equity investor, Crestview Partners, in December 2019.
The end of packaging fees and the rise of streaming and its oblique pay structure is fueling consolidation in the representation space. How an agency contends with those issues is what will make or break it in the coming years.
While Ari Emanuel flatly replied “No, we don’t need it” when asked by Kara Swisher on Sept. 28 if Endeavor will buy UTA, plenty of speculation has centered on the Jeremy Zimmer-run agency. For example: Does UTA, which touts itself as a full-service firm, bulk up and buy more boutique agencies to arm itself against CAA and Endeavor?
But while the top tier consolidates — and agency chiefs try to send messages of who is or isn’t more suited for representing clients or who is eying another brand acquisition — the smaller firms are seeing opportunity for growth, a chance to gain muscle, or to accentuate the differences. Companies ranging from APA to Gersh and Verve are now looking at their next steps to either bulk up or refocus.
But it’s unclear who will make major moves. APA, financially backed by Ron Burkle’s Yucaipa Cos., which has about 100 agents, plans to keep growing and is home to a diverse range of talent from actor Gary Oldman to multihyphenates Curtis “50 Cent” Jackson and Mary J. Blige. “Real growth will happen from the acquisition of both agents and talent,” says APA president Jim Osborne, who got his start in the ICM mailroom. “There is a clear opening for something else to emerge.”
Smaller agencies also see an opening in what some view as a scale-for-scale’s-sake battle between CAA and Endeavor. Verve, which has prided itself on its literary clients and has just under 50 agents, sees nimbleness as a virtue. “We believe in a world where one size doesn’t fit all,” says co-founder Bryan Besser.
Gersh, with just over 125 agents and the only privately owned firm, has strengths in talent, lit, as well as below the line, and now sees itself on the level of UTA as the only real alternatives for the consolidated companies. “We’re buoyed by this turn of events,” says co-president David Gersh. “It makes us a smart alternative.” He adds, “We don’t want to be distracted by all those other areas.”
And, meanwhile, will the Sam Gores-run Paradigm — which suffered through the pandemic as its motion picture literary division took a hit with agent exits to rival A3 Artists Agency and the selling of its music division to Casey Wasserman’s management firm — make a splashy buy with any new financing from his brother, billionaire Tom Gores?
Some stars are also in wait-and-see mode. “You’d like there to be a whole bunch of agencies in competition and for that to be spread out all over the place,” says Ben Affleck (repped by WME) when asked about the CAA-ICM plans. “But you also want there to be agencies really well equipped to represent and protect the people who do this work. Because if they’re not, they can be underserved.”
Grant Heslov, the actor turned Oscar-winning producer, says that even as the dust had yet to settle, the CAA-ICM merger “opens up the opportunity for some of the smaller boutique agencies to really shine, because there is no one fit place for everybody. I started as an actor and I had an agent who had a one-room shop on Ventura Boulevard — my first agent. And as you work your way up, you sort of find your way. So I don’t think it’s a bad thing.”
The management side of the representation landscape has also undergone shifts as more established firms such as Brillstein Entertainment and Management 360, have been joined by new and well-armed upstarts, such as M88 and Range Media. The latter was founded by former key CAA, WME and UTA agents last year. And questions abound about whether more managers will put a strain on an already overstuffed representation environment. “Managers are on guard,” says one founding partner at a management firm, “You can bet we’re all double-calling our clients right now.”
Chris Gardner contributed reporting.
A version of this story first appeared in the Oct. 6 issue of The Hollywood Reporter magazine. Click here to subscribe.
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