CAA to buy rival agency ICM
The deal would ‘shake everything up,’ leave Hollywood with three dominant talent firms.
Century City-based Creative Artists Agency said Monday that it is acquiring ICM Partners for an undisclosed price, in a deal that could transform Hollywood’s talent agency industry.
The transaction, which is subject to regulatory approval, would reduce the number of top agencies to three dominant players: CAA, WME and United Talent Agency. ICM is the fourth-largest talent firm.
The sale would give CAA and ICM the size and scale to better compete against Beverly Hills entertainment juggernaut Endeavor, which was created in 2009 by the groundbreaking merger with William Morris Agency and has been on a growth spree.
“It’s definitely going to shake everything up in Hollywood,” Tom Nunan, a lecturer at UCLA School of Theater, Film and Television, said of the acquisition. “It’s asking the question: Is bigger necessarily better?”
The deal would give CAA access to a lucrative publishing business and ICM’s top clients, including “Grey’s Anatomy” creator Shonda Rhimes, actor Samuel L. Jackson, director Spike Lee and Ellen DeGeneres.
CAA already represents prominent talent including showrunner Ryan Murphy, actors Reese Witherspoon and Tom Hanks, as well as music artists such as Ariana Grande.
After the deal closes later this year, all of those clients are expected to fall under the CAA brand.
“We think that the combined effort, energies here and resources strengthens opportunities for clients in all areas,” CAA co-Chairman Richard Lovett said in an interview. For example, London-based sports representation agency ICM Stellar Sports will help CAA expand its roster internationally, Lovett said.
CAA’s purchase of the smaller ICM Partners comes amid a broader consolidation of the entertainment industry as media companies bulk up their film and TV content offerings for streaming services. The shift to streaming has led to
an explosion in demand for content.
“What’s happening now is another seismic shift in the industry,” said Stephen Galloway, dean of Chapman University’s Dodge College of Film and Media Arts. “Whenever one giant part of the industry changes, another part of the industry inevitably changes too.”
The business of talent representation is changing dramatically as well, as the industry’s priorities evolve. Whereas movie stars and top directors were once the kings of Hollywood talent, the power has shifted toward writer-producers and showrunners who can fetch nine-figure deals with media companies and streaming services.
ICM, for example, represents mega-producers including Rhimes, “Breaking Bad” creator Vince Gilligan and “The Handmaid’s Tale” creator Bruce Miller.
“They are buying human capital, and they are buying assets that have relationships, and that is the currency in Hollywood,” said Eric Schiffer, chairman of the Patriarch Organization, an Orange County consulting firm.
Talent agencies are also under significant pressure, as COVID-19 delayed or canceled Hollywood productions, live events and concerts, causing the companies to lay off workers.
The agencies also lost a bruising battle with the Writers Guild of America, members of which fired their agents over so-called packaging fees and affiliated production companies, which the writers said were conflicts of interest. The major agencies agreed to phase out packaging, which had been a serious moneymaker, by June 30, 2022.
To comply with the agreement, CAA recently reduced its stake in Hollywood production company Wiip to about 20%.
CAA’s purchase is a potentially powerful statement to Hollywood and the agency business. Endeavor, which owns Ultimate Fighting Championship, earlier this year held an initial public offering of stock, raising more than $500 million and further upping the status of super-agents Ari Emanuel and Patrick Whitesell.
CAA, backed by private equity firm TPG, may be fattening itself up in preparation for its own IPO, analysts said.
While Endeavor grew by expanding into businesses such as MMA and professional bull riding, CAA has remained mostly focused on the old-fashioned representation business, which could make for a cleaner pitch to investors.
The acquisition is also a signal to studios, which have sometimes clashed with actors and other talent over how creators and A-listers should be paid as the business model changes.
CAA client Scarlett Johansson sued Disney in July, contending that the studio shortchanged her out of box office bonuses by putting her film “Black Widow” on Disney+ for $30 at the same time as its theatrical release.
CAA co-Chairman Bryan Lourd vocally hit back at Disney after the company issued a blistering statement in response to Johansson’s suit. Now, Lourd will have more leverage as deal-making continues to be in flux.
“If you want to fight Scarlett Johansson, you’ve got a whole lot more people against you,” Galloway said.
Whether the combined agencies will provide more personalized services and opportunities to their clients remains to be seen.
Marty Kaplan, director of the Norman Lear Center at the USC Annenberg School for Communication and Journalism, argues that the merger would contribute to more “sameness” and corporatization of Hollywood.
“What agent is going to want to spend the lion’s share of their time hustling to get a small movie made by an independent, quirky and interesting artist?” he asked.
Industry insiders say they expect the acquisition to cause staff reductions, although Lovett said it was too early to discuss.
“Once all of the legal work is complete, and we get approval ... to start really pulling the companies together, we can better address all of that,” Lovett said.
Performers union SAGAFTRA said it will be monitoring the deal.
“We will carefully scrutinize this combination of two storied talent agencies to ensure that performers will benefit from, and are not disadvantaged by, the deal,” SAG-AFTRA National Executive Director Duncan Crabtree-Ireland said in a statement.
CAA had held exploratory discussions in 2019 to buy Paradigm Talent Agency, according to a person familiar with the matter. At the time, Paradigm denied it was interested in selling. The Beverly Hills-based agency later sold its North American live-music business to Casey Wasserman’s sports marketing and talent management company.
The agency business continues to consolidate with CAA’s planned purchase of ICM. After the deal closes, ICM Partners Chief Executive Chris Silbermann will join CAA’s shareholder board.
“We’re just focused on having the best platform for our clients,” Silbermann said in an interview. “This is a truly client-first, next-generation company.”
Founded in 1975, International Creative Management has become one of the industry’s leading talent agencies. Silbermann joined ICM in 2006 when it acquired Broder Webb Chervin Silbermann Agency, where he was the youngest partner and earned a reputation as a sharp and ambitious agent.
In 2012, the Century City firm rebranded itself as ICM Partners after Silbermann led the charge to make it a partnership, with agents buying out private equity investor Rizvi Traverse Management.
In 2019, the company took on funding from Crestview Partners — selling an ownership stake for about $150 million — and began an expansion drive. Last year ICM bought Stellar Group — making it a major player in sports representation — acquired live-music booking agency Primary Talent International and took a minority stake in Swedish firm Albatros Agency.
ICM Partners had recently come under scrutiny after former employees described mistreatment by their managers to the Los Angeles Times. The paper’s investigation highlighted numerous allegations of harassment and other misconduct against women by male agents and executives.
ICM confirmed in July that former prominent ICM agent Steve Alexander, who was among several men featured in the article, left the agency for undisclosed reasons. Alexander denied an allegation that he had exposed himself to a film finance executive.
ICM has said it “does not tolerate harassment, bullying or other inappropriate conduct. HR investigates all reports received and addresses each with appropriate disciplinary measures up to and including dismissal.”