For Hollywood Talent Managers, Outside Investors Bring Issues of Control
Rick Yorn, who reps Leonardo DiCaprio and Martin Scorsese, is said to be fighting for control of his business after taking on billionaire Ron Burkle as a backer.
Much has been made about the impact of deep-pocketed investors on Hollywood's talent agencies. Endeavor, CAA and UTA all have taken on majority or substantial stakeholders, and Endeavor is seeking to go public. But management, another key component of the talent community, also is being reshaped by outside money, and with the influx of cash comes issues of control and direction.
Consider Rick Yorn, one of the industry's top managers, with a client roster that includes Leonardo DiCaprio, Jennifer Lawrence and Martin Scorsese. More than a decade ago, Yorn's LBI Entertainment took a previously undisclosed loan from billionaire investor Ron Burkle, who is now using that leverage in a push to combine LBI with other Burkle-backed management entities, sources tell THR. A spokesperson for Burkle denies any clash with Yorn. "Ron and Rick have been great friends for years and remain so," the rep says. Yorn, who has managed DiCaprio since the Once Upon a Time in Hollywood star was a teen, also denies any conflict and declines further comment.
The pressure on Yorn comes at a time of great change for many management firms. Long before agencies began dabbling in film and TV production, managers learned that a starry client list could lead to a fruitful producing career. Top managers now regularly produce shows and movies, creating lucrative revenue streams that have made their firms prime targets for investors. In 2018, Lionsgate acquired a majority stake in 3 Arts Entertainment, which reps Chris Evans and Robert Pattinson and has produced such shows as 30 Rock and Louie. Laurene Powell Jobs' Emerson Collective holds a major stake in Anonymous Content, which reps Emma Stone and produces shows in conjunction with Paramount Television. Propagate Media, run by Howard Owens and Ben Silverman and backed by merchant bank The Raine Group, recently took a majority interest in Artists First, home to Tiffany Haddish. While some firms have chosen to remain independent, others are said to be seeking cash or are exploring strategic team-ups such as the arrangement Management 360 struck this year with production-finance outfit MRC in which the companies will produce content jointly. (MRC is owned by Valence Media, which also owns THR.)
But as the agencies have learned, outside investment also can bring headaches as backers demand results and sometimes control. Lionsgate stock has been reeling, putting added pressure on 3 Arts to deliver projects featuring its clients. "Even though the revenue streams at 3 Arts are relatively small compared with Lionsgate's revenues, [the acquisition] adds an element of more stability and less volatility to their balance sheet," says analyst Hal Vogel. "Given the difficulties Lionsgate has had in the movie business of late, they are looking for scale as a stabilization factor."
At the same time, insiders at Anonymous express trepidation about its future in the wake of the April death of founder Steve Golin and believe Jobs is poised to assert more control. A company rep says the firm is being well managed by its division leaders. "That team continues to build upon the legacy Steve has left behind and has engaged an outside search firm to evaluate opportunities to add additional leadership to the team," the rep adds. At Artists First, Silverman is said to be using his ownership interest to pitch himself as a producer of new client projects in meetings around town.
"The truth is, there are no management companies anymore. They're all production companies," says veteran attorney Schuyler Moore. "The same consolidation is going on throughout the film industry, the same control issues."
As for Yorn, sources say Burkle wants to combine LBI with two other representation companies he backs: the U.K.-based Independent Talent Group, with clients including Daniel Craig and Felicity Jones, and Independent Sports & Entertainment, with a roster that includes baseball stars Miguel Cabrera and Justin Verlander. (That firm was known as Relativity Sports but rebranded following Burkle's $30 million investment in 2015. Through that loan, Burkle ultimately wrested control.) Despite its name, IS&E has no significant footprint in the entertainment space, and naturally Burkle would see DiCaprio as a lure for other talent. (DiCaprio has no agent.) Burkle has developed a relationship with the star, sources say, though it was Yorn whom DiCaprio sat next to at the May 21 Cannes premiere of Once Upon a Time in Hollywood.
A source with knowledge of Burkle's thinking believes that the investor will end up imposing his will on Yorn, who, after all, took money from "a profit-margin guy."
And he's not alone. Golin himself knew the ups and downs of outside investment. In 2013, the late producer told THR why Anonymous had, to that point, withstood the siren call. "There's tons of money out there right now: There's private equity; there's Wall Street; there's rich individuals. Money is not the problem. The problem is having a solid business plan and knowing what you're doing, whether it's a movie, a TV series or a company."
This story first appeared in the July 31 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.