CAA's Bryan Lourd confirms talks of stake buy
Kohlberg Kravis & Roberts eyeing $250 mil stake in agencySo what about outside capital in your agency, CAA managing partner Bryan Lourd was asked Tuesday after news broke that Kohlberg Kravis & Roberts is in talks to buy a $250 million stake in the firm.
Lourd more or less confirmed the talks with the investment firm while speaking at the Beverly Hills Hotel during a Summit on Luxury Goods sponsored by the Financial Times.
"There have been conversations," he told the 150 marketing and ad agency execs, though he never mentioned KKR by name. "It's premature to say. We've self-financed so far, and we did OK in the credit crunch."
(Even so, all talent agencies have felt the downdraft from the recession and seen their commissions from talent deals squeezed. And in 2005, ICM ceded a substantial majority share in its fortunes to private equity player Rizvi Traverse.)
Whatever the challenges of the representation biz, one thing Lourd did suggest more forcefully was that he and his partners would, as he put it, "never turn over control."
"It is," Lourd went on, "the passion, the family we all chose, along with" -- he half-jokingly added -- "our other dysfunctional ones at home."
Lourd also volunteered that many people in private equity and the investment community "who are much smarter than we are" could, if the right fit came along, play a role in expanding the sphere of the agency -- but always in a minority position.
FT editor Lionel Barber did not press Lord on the issue, and the 45-minute conversation then shifted back to the topics at hand -- namely how major brands are increasingly getting in bed with Hollywood to get their messages across and how stars and celebrities are responding to these new challenges and opportunities.
For one thing, Lourd pointed out, certain actors understand their responsibility toward those who invest in their art.
In the old days, Lourd noted, "actors would go quietly off to Europe or Asia to do sponsorships or endorsements," but now they more fully understand the value of "real long-term partnerships with companies."
Endorsements can further an actor's agenda. For companies, the need is for actors to be front and center, to have stock, to experience the product in order for the relationship to be authentic in the eyes of consumers. "The client has to really show up," Lourd said.
As for other growth areas of the agenting business, Lourd put the accent on CAA's four-year-old expansion into the sports arena, which now includes representation of such athletes as Peyton Manning, Derek Jeter and LeBron James. To get that division going, CAA hustled to hire a passel of powerful sports agents from the sports rep firm IMG and started to put together sponsorship deals among athletes, corporate clients and sports teams.
"Like movie stars, top athletes want to know (from us) how to manage the business around their gift," he said. And that, he continued, involves extensions into other fields such as broadcast anchoring, philanthropy and real estate.
The CAA partner also said there will be much more "back and forth" between the film world and the sports world, pointing to director Alejandro Gonzalez Inarritu's recent deal with Nike, or between stars and products that reflect their passions and styles, as with George Clooney and Omega.
"Anyone who ghetto-izes any form of media is a fool. We've all got to throw away our playbook and start over," Lourd said.