The guy who's best known for orchestrating the creation of the first Hollywood super agency just out did himself. Ari Emanuel — y'know, the inspiration for Entourage's Ari Gold — just merged his powerhouse talent agency William Morris Endeavor with top competitor IMG.
The New York Times' Dealbook reports WME, with some help from private equity firm Silver Lake Partners, paid $2.3 billion for the sports and media talent agency IMG, beating out at least two other suitors in a bidding war. The mutant creation becomes the biggest agency in Hollywood, placing WME-IMG or whatever they will call it at the top of the proverbial food chain over the Creative Arts Agency.
In 1995, Emanuel, along with three others, famously raided his own client files at ICM and went rogue, launching his own agency, Endeavor. Fourteen years later, in 2009, Emanuel's crew took over the old school William Morris Agency, creating the first-ever super agency, William Morris Endeavor. (You may recognize this story,in slightly fictionalized form, as a plot from Entourage.) This new consolidation only adds to the power Emanuel and the agents who work for him.
The fact of the matter is, the movie industry doesn't pave the streets with gold the way it used to. Box office revenues are at an all time high because movie ticket prices cost an arm, a leg, and a first born — especially for 3D movies — but marketing and production budgets also hit record highs. And all that money doesn't go to the actors, either. Thanks to streaming and on-demand services, DVD sales have plummeted, and Blu-Ray sales aren't picking up the necessary slack. Hard copy home video is nearly a dead medium. So Hollywood agencies have started looking elsewhere for new opportunities, like in media and fashion and sports. That's where IMG thrives. Per Variety:
IMG’s most profitable business, according to sources familiar with the company, is its college sports wing that controls marketing rights to 90 universities and conferences, including two-thirds of the Bowl Championship Series schools and 49 of the 50 largest U.S. markets.
Athletes especially are lucrative clients, what with their guaranteed contracts worth hundreds of millions and endorsement deals worth even more. If you land a Lebron James or Sidney Crosby or literally any All-Star caliber baseball player, you can put your kids through the Ivy League ten times over. But CAA already had a leg up on WME in the sports market. Per the Times:
Athletes command contracts worth hundreds of millions of dollars, but the real money lies in negotiating endorsement, licensing and media-rights deals. Creative Artists Agency started from scratch just a few years ago and now has nearly 1,500 employees and represents more than 800 athletes, including Buster Posey of the San Francisco Giants and Carmelo Anthony of the New York Knicks. It also does sports consulting and sells naming rights and global media rights for sporting events.
CAA's doing so well in the sports realm that they have Jay-Z on their side. When the Brooklyn MC wanted to sell his stake in the Brooklyn Nets and start Roc Nation Sports, a boutique agency designed to handle only those lucrative endorsement deals, he teamed up with CAA and "Worldwide" William Wesley (an NBA "power broker" who has consulted LeBron James and other basketball stars) to make it a reality. Hov's team then went out and signed New York Giants receiver Victor Cruz, buzzed-about WNBA player Skylar Diggins, and the hyped rookie starting rookie quarterback for the New York Jets, Geno Smith. To cap a brilliant year off, Jay-Z signed Oklahoma City Thunder guard Kevin Durant, widely regarded as the best player in the NBA not named Lebron James.
Yet, the new WME-IMG conglomerate has its own heavy hitters, with more experience and arguably more pull than Jay Z. Mark Shapiro, the former head of programming at ESPN, helped orchestrated the deal for Emanuel and has been rumored to be in line to run the new company once the sale is complete.