UTA’s Private Equity Move: A Battle for Scale With CAA and WME

Amid upheaval in Hollywood, as entertainment giants invest in their direct-to-streaming efforts, and as they try to find a balance between subscriptions, advertising, theatrical releases and other business models, the major talent agencies are scaling up, betting that the demand for content — and for top-shelf talent — will keep growing.

And it’s all backed, at least in part, by private equity cash betting that “peak content” concerns are overblown. On July 18, UTA revealed an investment from the Swedish firm EQT. UTA CEO Jeremy Zimmer said he and his leadership team chose EQT as an investor because they felt the firm “would really help us drive growth while protecting our culture.”

UTA’s investment, meanwhile, arrived shortly after CAA, led by Bryan Lourd and Richard Lovett, completed its June 28 acquisition of ICM, which is topped by Chris Silbermann, forging a representation giant backed by its majority owner, TPG. And the Ari Emanuel-led Endeavor, owner of WME, went public last year in an IPO after leaning on the investment and support of Egon Durban’s Silver Lake.

All of the agencies have leveraged the private equity cash to ride the content wave as streaming services proliferated while traditional distribution models like cable TV continued to demand fresh material.

With private equity looking to invest in every part of Hollywood — on July 19, Gerry Cardinale’s RedBird Capital became the latest to unveil a deal, the acquisition of casting software firm Talent Systems — it makes sense that talent agencies, which serve as the connectors of content companies, talent and distributors, will be a focal point of their investment strategies. Endeavor is using that cash to expand into sports, with a pending acquisition of the sports betting analytics firm OpenBet, while CAA has made its power play by devouring ICM.

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UTA has not been deal-shy. In the past year it acquired Michael Kassan’s advisory firm MediaLink, boutique agency The Curtis Brown Group and data analytics company MediaHound. But now, flush with EQT’s cash, it is pursuing “investments in its core businesses as well as expansion into adjacent opportunities,” the company says, specifically calling out international options.

Those previous acquisitions can form something of a blueprint for what UTA might do next. Curtis Brown, based in the U.K., grows the company’s international presence while still sitting in its core representation model. MediaLink, a consultancy best known for its expertise in the advertising sector, could underpin further expansion into the marketing or strategic advisory space. And MediaHound marked an investment in data and analytics to bolster its UTA IQ unit.

So while Endeavor is using WME to help power its other divisions, including its investment in sports, and while CAA is doubling down on representation, UTA is expanding its representation business while finding other green shoots to pursue. As one private equity source tells The Hollywood Reporter, in a world with an ever-expanding number of platforms, A-list talent — be they actors, writers or directors — will remain in high demand.

And the agencies are well positioned to get that talent the best deals, securing a little bit for themselves in the process. The question is just how big the Big Three can get and which other areas they can gain a foothold in.

This story appeared in the July 20 issue of The Hollywood Reporter magazine. Click here to subscribe.