Hollywood’s biggest agency is now even bigger after CAA’s acquisition of ICM Partners was (finally) made official earlier this week. While headlines have focused on how the behemoth is set to reshape the business, and how the four-agency town has been chopped down to three, competitors WME and UTA aren’t exactly taking their balls and going home.
This merger, UTA’s own spree of acquisitions, and WME’s crucial place in Ari Emanuel’s publicly traded Endeavor (EDR on the New York Stock Exchange) empire all speak to how the agency business of today (and of tomorrow) are about so much more than competing to represent A-listers. There are podcasts and advertising and books and influencers and marketing and data analytics all at play here — not to mention the changing media landscape led by tech-backed (read: incredibly rich and powerful) streamers.
Sometimes you have to fight consolidation with consolidation. But not everyone is happy about the idea of agencies getting fewer to get bigger. When the CAA-ICM deal was first announced in September, SAG-AFTRA said it “welcomes any change that results in increased negotiating power for talent,” while noting it would “carefully scrutinize” the union to make sure their union performers wouldn’t be getting fleeced as a result.
The Writers Guild of America (WGA), which successfully reshaped the agency business in its campaign to end packaging fees and restrict agencies’ ownership of production companies, hasn’t spoken out specifically against this deal, but a big part of the labor group’s platform has included pushback against consolidating media power. Its next target is the major studios: WGA West President Meredith Stiehm said she’ll bring “the same strength and resolve” in upcoming contract talks with the Alliance of Motion Picture and Television Producers (AMPTP) as they did with the agencies last year.
Like it or not, we’re down to three majors. Below is a breakdown of the new talent agency landscape.
Valuation: $5 billion
Key players: CAA co-chairmen Bryan Lourd, Kevin Huvane, and Richard Lovett; ICM CEO Chris Silbermann
Major clients: Tom Hanks, Steven Spielberg, Chris Evans, Shonda Rhimes
With nearly 3,000 employees, CAA was already huge. It got even bigger Tuesday by gobbling up what was the smallest major agency in town, ICM, in a deal valued at $750 million. With an enviable roster of clients repped by some of Hollywood’s biggest powerbrokers, the newly expanded CAA has even more heft to fight battles like the one Bryan Lourd helped wage against Disney over Scarlett Johansson’s compensation when “Black Widow” pivoted from theatrical-only to day-and-date on Disney+.
As part of the acquisition, executives welcomed ICM’s books division. With a roster of clients that include the late Toni Morrison, Taffy Brodesser-Akner, Patricia Cornwell, and the estate of Dr. Seuss, the new mega-agency gets an influx of IP to shop around town. Oh, the places it will go.
Already strong in basketball representation, CAA is now an even bigger player in sports thanks to ICM’s British Stellar Sports division. And in April it took full ownership of a brand management and development joint venture — clients include Coca-Cola, Ford, Netflix, and Anheuser-Busch InBev — making for easy synergy for endorsements.
CAA is majority owned by private equity firm TPG, which has seen its stock slide almost 20 percent since its January IPO. Among the growth areas TPG eyed under the IPO are content creation, which the firm says has been built off its CAA investment. There are rumors that CAA could be spun off as its own public company; Lourd in September told The Hollywood Reporter the acquisition isn’t part of a plan to take CAA public, but “it doesn’t rule it out.”
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Valuation: Parent company Endeavor has a market cap of $10.07 billion
Employees: 1,500 (Endeavor’s ranks total 7,000)
Key players: Endeavor CEO Ari Emanuel and Executive Chairman Patrick Whitesell
Major clients: Robert Downey Jr., Matt Damon, Denzel Washington, Tom Holland, Emma Stone, Dwayne Johnson
CAA’s closest rival is similar in its exposure to public markets, but unlike CAA, WME is fully owned by the publicly traded Endeavor. The 2021 IPO marked a victory in a long-fought battle for Emanuel and Whitesell, who seek to build an empire on the foundation of their talent representation businesses.
It’s the self-described “network” of wholly and partially owned subsidiaries that are the selling point for doing business with Endeavor, which include sports leagues like UFC and Professional Bull Riders, Miss Universe, events and PR firms, independent studio Endeavor Content, and a handful of PR, branding, and events companies. And the company still has ambitions to grow in other areas: Endeavor’s acquisition of sports betting company OpenBet is pending, adding to its existing business in that sector, IMG ARENA. It’s a field that’s growing; Californians will consider legalizing online sports betting in November.
Endeavor raised $511 million in its IPO. Its stock has fluctuated over the last year; as of Friday morning it was trading at around $21, or some 12 percent below its IPO price. A live-events rebound has helped the company break into profitability, while talent representation revenues rose 44 percent in Q1 thanks to what the company says is increased brand-marketing spend and demand for clients.
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Valuation: $750 million as of 2018, which doesn’t reflect recent growth and acquisitions
Key players: CEO Jeremy Zimmer, co-presidents David Kramer and Jay Sures, Chairman Jim Berkus
Major clients: Benedict Cumberbatch, Sandra Oh, Elizabeth Banks, Wes Anderson, Bryan Cranston
UTA is now Hollywood’s smallest agency player, but it has big ambitions to continue a decade of sharp growth through strategic investments and new divisions. Not sure if you’ve noticed, but that latest (admittedly outdated) valuation we could find for UTA would place it at exactly the same size as the CAA-ICM deal’s valuation. That offers a view into the necessity for UTA to continue to get bigger or get bought out, in case CAA wanted to double down — or if WME feels like going for the block.
Just in the last month, the company bought British lit and talent agency Curtis Brown Group, whose roster includes “Handmaid’s Tale” author Margaret Atwood, and the literary estates of 007 creator Ian Fleming and John Steinbeck. It also bought data and analytics company MediaHound, bringing proprietary software to the UTA IQ division. That’s a priority when negotiating deals with data-driven companies like Netflix and Spotify.
Those deals come after last year the company acquired the influential media consulting company MediaLink, to help grow its marketing business and launched a special-purpose acquisition company (SPAC) led by a former Nintendo exec to pursue acquisitions of companies in the gaming, creator, and digital media spaces. It all comes together to form a picture that UTA doesn’t want to be beat by its bigger rivals in the increasingly important areas of brand partnerships, influencers, and gaming.