What’s next for UTA in Hollywood pushTheWrap merger?

However, insiders with knowledge of both CAA and ICM have said the statement – what another insider called typical of ‘Ari Emanuel’s swagger’ – is misleading given the post-pandemic state. rocky finances of Endeavor. As of June 30, the new public company was in debt of $ 5.35 billion, so it is unlikely that it will be able to make all acquisitions.

“They are so in debt that they don’t know they can buy UTA. I don’t think they can, ”an insider told TheWrap, adding that UTA’s future definitely falls into the“ who knows? category following the CAA / ICM agreement.

Others dismissed Emanuel’s rejection of ICM as an overwhelmed Hollywood player with “five amazing TV writers… a very good book business and a very good company of football representatives outside of Europe”.

“They were such bulls—, saying they basically represent five writers and a football agency,” said a senior official who asked not to be named. “They generate way too much money for that, and they have a Great book department. Good for them. I guess I was a little surprised he said that.

Whether or not there is a merger in UTA’s future, the CAA-ICM deal has focused all eyes on UTA’s next step. “People say the big three. Now… it’s the Big Two-and-a-half, ”said Stephen Galloway, dean of Chapman University Film School. “What does one half do to be full size?” “

UTA did not respond to TheWrap’s request for comment, but insiders called it a mistake to assume that UTA is in trouble and therefore may seek to strengthen itself through an acquisition. Like most talent agencies, UTA has suffered layoffs and time off during the pandemic, but “they are not vulnerable,” an insider said. He added that UTA has “great customers and great agents. They are not on the same ground, but in the same game, as the CAA. They have top people in all positions.

Founded in 1991 and led by CEO Jeremy Zimmer since 2012, UTA offers a client list that includes Paul Rudd, Benedict Cumberbatch, Will Ferrell, Jason Sudeikis, Issa Rae, Chris Pratt and Ewan McGregor. In 2019, UTA took a stake in Rich Paul’s Klutch Sports (Paul is now the head of UTA Sports and sits on the company’s board of directors). Paul’s client list includes his longtime friend LeBron James as well as Anthony Davis, John Wall and Trae Young.

In fact, UTA has caused quite a stir in recent years as an acquirer, rather than an acquisition target, albeit on a smaller scale than the CAA / ICM deal. In 2019, after an unsuccessful attempt to acquire Paradigm Talent Agency for more than $ 250 million, UTA acquired leading influencer firm Digital Brand Architects. And last March, UTA announced that it had acquired the London-based Echo Location Talent Agency.

But since consolidation has dominated Hollywood, UTA may have good reason to avoid merger talk. “UTA might be able to sell a lot of its customer base by being the kind of exception and with a more traditional makeup, that” Hey, we’re focusing here on representing clients, while our competition is trying to be media conglomerates in the public market, ”Matt Bilinsky, technology and media lawyer at Weinberg Gonser in Los Angeles, told TheWrap. “Going against the grain might be appealing to them. Or they could be overwhelmed… they could find themselves without a seat, once the fusion music stops.

Bilkinsky noted that the merger momentum has intensified since William Morris and Endeavor merged in 2009. “We have seen that two large, large-scale agencies can combine,” he said. “Then three? Does it work with three, or is a three a crowd? It’s hard to say.

Some insiders have rejected the idea of ​​a marriage between UTA and Endeavor for other reasons – related to the institutional culture.

And other small agencies see an opportunity in Hollywood’s biggest actors getting bigger and bigger – allowing midsize agencies and shops to recruit talent – and agents – who may feel left out. the concentration of large agencies on A-listers and the best. dollar transactions.

“It’s good for them, and it’s great for us,” said Jim Gosnell, CEO of mid-size agency APA which represents stars such as Gary Oldman, Mel Gibson, 50 Cent, Mary J. Blige , Ronny Chieng and Eddie Izzard. “I think this consolidation creates opportunities, it’s a great opportunity that comes only once every 15 or 20 years.”

Some clients will find the more practical approach of a small agency more attractive. “People are going to find that they want a different point of contact,” he said, noting that mega-agencies “may not be the answer for everyone. We are in the right place at the right time.

Others agreed that the dynamic of ever-larger agencies does not work for everyone. “These are the most powerful agents who are going to put their clients first,” David Offenberg, associate professor of finance at Loyola Marymount University with expertise in entertainment, told TheWrap. “These lower-ranking agents are going to have a harder time getting their clients to the studios and producers – that’s already a problem.”

Whether or not UTA is part of a future merger, arts agencies of all sizes face financial constraints due to the pandemic shutdown of production and live events, as well as packaging costs for impending losses. since the agencies of new agreements signed last year with the Writers Guild of America.

“Profits must be down,” David Chidekel, partner at Early Sullivan Wright Gizer & McRae, who advises and represents clients in the media and entertainment industries, told TheWrap. “And that kind of stress can cause mergers.”

Brian Welk and Sharon Waxman contributed to this report.