William Morris + Endeavor, Future of the Mega-Agency
The mega-agency merger is made: William Morris Endeavor (WME) Entertainment is the combined talent agency merging film, television, music and book publishing between WMA and Endeavor. Architected on one side by Ari Emanuel, who left ICM (under Wiatt) nearly 15 years ago, and his senior partners – Patrick Whitesell (former CAA), Adam Venit and Rick Rosen (the fourth, or fifth, principal was Tom Strickler, who resigned presumably because he was anti-merger); and, by Jim Wiatt and Dave Wirtschafter from the WMA, now Chairman and Co-CEO, respectively, with Emanuel and Whitesell. A breakdown of the deal math, what it means, and where they go next in relation to CAA.
The Agency/Deal Math:
With Endeavor’s 80-100 agents (about 280 total employees, per LAT) and WMA’s 150 agents (800 employees), Nikki Finke at Deadline Hollywood Daily’s (DHD) blog, which expertly followed the merger, predicts 100 or so layoffs over the next few weeks.
Add to that the requisite agencies’ assimilation issues – agents/agency poaching and conflicts, agents-turned-managers, change of client marketshare – comes the understanding that while this merger helps both companies survive the current economic storm and a changing entertainment environment (lower DVD revs and TV budgets, less upfront/more backend for theatrical).
With combined revenues of $300-325M – research points to a 2:1 split between WMA:Endeavor – the goal will be to challenge the dominant CAA, while maintaining course with current clients.
And with the new classification as WME “Entertainment” (as opposed to “Agency” or better “Media”), one wonders if they will stretch the model as has been seen with the Endeavor-MRC relationship.
The toss-up will be how the two sides intermingle and work together to produce coherent results for their shared clients. Early on, Emanuel said, “We need a bigger boat,” given the merger exploration process which took an emotional toll on both sides, not to mention their clients.
Endeavor Advantages:
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WMA Advantages:
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Both sides now realize that any newly merged company has to consist of only 150 core movie/tv agents at most. The mantra of these negotiations is “make it smaller”. That means, of WMA’s 150 agents, and Endeavor’s 100 agents, about 100 from the combined total will have to be let go. And since CAA’s Richard Lovett has pursued a policy of 100% marketshare when it comes to clients, the new WMA-Endeavor is making as its goal to rep only the elite Top 2%.
After the jump, more on the new agency makeup, the financial value of the enterprise, and the new-and-improved mega-talent agency skirmishes and wars to follow…