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The blockbuster merger agreement between CAA and ICM was signed at 8:17 a.m. PT, a little more than an hour before the news ricocheted across the entertainment business. A source says that the deal was in the works for “weeks and months” with only a small circle of executives involved.
“I think we are shocked that we were able to keep it quiet because many people on both sides have been working on this for a while,” CAA co-chairman Bryan Lourd told The Hollywood Reporter Monday afternoon. “We take it as a great signal and sign of the leadership of both companies, and how they conduct themselves.”
Of course, there will be changes. Anytime there is a merger of this scale, that dreaded corporate term “synergy” arises. When two firms in the same business consolidate, layoffs usually follow. Likewise, while CAA and ICM are essentially across the street from each other in Century City, CAA president Richard Lovett says that the combined companies “are all going to be in one location together as soon as time allows for that to be.”
“We are just at the beginning of this process,” ICM CEO Chris Silbermann says, when asked about potential layoffs.
“Both of those subjects will happen in the weeks and months to come,” Lourd added, noting that the deal has only been signed a few hours earlier.
The impetus for the merger, per Lourd, was straightforward: “We, with Chris, believe in the representation business. It is at the center of everything that we have both done over the 30 years of our careers. What Chris and Ted and the group built over at ICM is one of the best representation companies that has ever existed.”
“We all look at the world and we put our clients first when we represent them, that is one of the through-lines, one of the connections we have always had through the years,” Silbermann adds. “We always fight for our clients and respect our clients. And that is not going to change. What this does is bring more resources to bear for our clients, more collaboration, better ideas, and a better platform.”
Lourd also sought to distance CAA from rival WME, with its parent company Endeavor leaning into other businesses like UFC and Professional Bull Riding, as well as areas like technology and sports betting (also on Monday, Endeavor announced a $1.2 billion purchase of sports betting company OpenBet).
CAA, by contrast, continues to emphasize its focus on representation.
“We think that the people that are actually paying attention to what is going on in the world will understand that this is a doubling down on the representation business, and commitment to the need for it in this world that we are in both in, in terms of the market, and technology,” Lourd adds.
And while TV and film may be the traditional stomping grounds of the agencies, sports has become a critical part of the representation business. Multiple sources say that ICM’s sports prowess, most notably its Stellar Sports unit in London, was critical to the deal (as was its New York office and its business). And companies like CAA are becoming bridges to potential partners, not just in entertainment but in finance and elsewhere, as stars become brands and entrepreneurs themselves.
“We are very optimistic about this moment with regard to what is possible for artists and for athletes, in regards to their work, and how to build a relationship with the distribution partners and the marketing partners and the financing partners and what they do, in a way that none of us has really ever seen,” Lourd says.
Lourd insists that the ICM acquisition is not part of a longer-term plan to take CAA public (“This is not a move to get to that. It doesn’t rule it out, but it is not part of the endgame”), while Lovett adds that “we were in conversations with [CAA majority owner] TPG throughout” the process.
“They love Chris. So this was super-easy in that way,” Lourd says. “We have done right by them, it has gone well, they have been super-helpful in thinking through this, but when we said it was Chris and ICM, it was the easiest ‘yes’ we have ever gotten.”
TPG is reportedly in the process of taking itself public through an IPO, and investors in a public TPG would receive exposure to CAA, in addition to the private equity firm’s other investments.
“They respect our strategic leadership, and the decisions we make in leading the company, and they have been supportive throughout,” Lovett says. “They have been steadfast partners for many years, and plan to continue to be so.”
Still, questions remain. Regulators at the Federal Trade Commission and Department of Justice have been scrutinizing all manner of deals in recent months, and a high-profile merger in the already somewhat consolidated agency business could draw federal attention.
“We obviously have gotten great advice from our advisors at [law firm] Wachtell Lipton and [investment bank] Allen & Co., and everyone is very confident about that part of this,” Lourd says. “We don’t know if they will want to talk to us or not, in the scheme of things this is not a major deal like some of the other deals we are all watching and reading, but we are very confident.”
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