CAA/ICM: Done DealEXCLUSIVE: an announcement's coming as early as Friday. But who's mad and who's popping Champagne?
A couple thoughts on this week’s passing parade below, but first, a breaking story from The Ankler’s Peter Kiefer on the CAA/ICM merger. Here it is: The ink isn’t quite dry yet, but CAA’s acquisition of rival agency ICM Partners is finally on the brink of becoming a reality after a 10-month gestation. According to several sources with knowledge of the matter, agents who are making the move to CAA are being told that the merger is expected to be concluded as early as Friday with an announcement coming early next week, possibly Monday. For CAA’s triumvirate of principals and ICM CEO Chris Silbermann, the prospect of getting over the finish line comes not a moment too soon. Originally announced back on September 27, the initial expectation was that the deal would close by the end of 2021, or at the latest in the beginning of 2022. Since then the merger, which whittles down four major agencies to just three, has been marred by a spate of departures from both agencies and scrutiny by the Biden administration. In January, word leaked that the Department of Justice was conducting an inquiry of the deal, delaying it even further and thus allowing just enough time for some unwanted (or perhaps, encouraged) soul-searching on the parts of more than a dozen ICM agents who have since departed the agency. Regardless, it seems that nearly everyone is furious at Silbermann from the ICM side: “He is the most hated man in town” says a source, who says that Silbermann has left his former ICM partners in the dark, and also high and dry with little leverage to push back against compensation packages that border on “insulting.” Their equity stakes in ICM are converting to ownership in CAA, but now, with no IPO in sight (particularly now in a down market), no cash-out seems imminent. Interestingly, after the close, ICM founding partner Ted Chervin will resume mere agenting, reporting to CAA’s Joe Cohen, while Silbermann assumes a board seat. Sources have characterized the last few weeks as a mad dash by CAA’s principles to convince ICM’s most top-tier agents to stay and not defect. They have had mixed results. The town has been buzzing about the low-ball comp packages being offered. In one case, The Ankler has learned that the head of a major department at ICM was being offered a base pay package hundreds of thousands of dollars below what he currently makes (although base pay shortfalls could, in theory, be made up for in stock and bonuses due to CAA’s pay structure). A spokesman for CAA declined to comment. Deadline recently tallied up a list of notable departures that already have landed elsewhere that includes: Jeff Barry, Dan Baime, John Burnham, Josh Rahm, Matt Sorger, April King, Ariel Meislin, Adam Ginivisian, Nathalie Didier, Christina Bazdekis, Denise Draper, JR Ringer, Kevin Hussey, Zach Carlisle, Brett Passis, Seth Lawrence and Will Kircher. Several more are in talks to depart (or stay). Some observers note that the merger’s elongated close and the exodus of some top ICM talent agents has inadvertently aided rivals. Last month, John Cena a former client of ICM, signed with WME for representation in all areas after Baime, Cena’s agent, left ICM to start the management firm Intenta Management. However, others have noted that none of the departures is a surprise — CAA was ultimately eyeing ICM’s publishing business, run by Sloan Harris and Esther Newberg, and there have been no major defections from that department. In yet another sign the deal is nigh, Moody's Investors Service recently assigned a B2 rating to CAA’s new $325 million term B-2 loan used to acquire ICM. Moody’s reports CAA will have a pro forma cash balance of approximately $289 million and access to an undrawn ($26 million of L/Cs outstanding). Moody’s also reports that CAA received an additional $147 million equity investment by TPG in June 2022, an equity contribution following TPG’s $100m lead investment in July 2021. Marvin Josephson, the founder of ICM, died almost a month ago (his daughter famously left ICM for Endeavor after ICM was taken over by Silbermann and Chervin). Now, the agency shall pass as well. - P.K.
Prime Reputation Laundering/Trade Style!This week, Netflix embarks on another round of layoffs. After losing 70 percent of its stock value, it plans more cuts into the rank and file and even this time — if word on the street is to be believed — a head or two from the upper ranks. Meanwhile, the miracle company seems to be in a tailspin of conflicting messages. After public acknowledgments that there will be adjustments, the sails trimmed, etc. execs this week took great pains to make clear that nothing will be changing, layoffs, stock crater and subscription decline notwithstanding. And up next, the ad-supported option, introducing a discount tier into a company that long said it would never consider such things and, with the clock ticking down to the self/Wall Street-imposed deadline, still hasn't addressed the basic questions of how this will work. It's about as rough a patch as the charmed company has seen, now experiencing the flip side of the media attention. And if you're the founder and CEO of said company, I can imagine you'd be feeling a certain desperation this month to talk about... anything else. And it's THR to the rescue!
After all, what is a free press for if not to help our oligarchs out of tough corners? Especially if they'll pose for a cover photo while they are at it. “That kind of transparency has come to define Hastings,” the piece tells of Reed the philanthropist, his refusal to discuss his company's turmoil notwithstanding. “Hastings likes to keep his philanthropy separate from his day job....he at times would gently resist attempts to connect the two.” Ah well, I guess they tried. All this is not to say Reed is not an impressive giver. He seems pretty deep in the weeds on the education initiatives he supports. But given the news at the moment, with the fate of entertainment hanging in the balance, largely thanks to the disruptive force of his company, is this really the side of him that the leading trade publication should be focusing on this very week? One can play a little game, imagining if The Washington Post invented a Humanitarian of the Year award, and gave it to, say, Joe Biden, on say, election week... something of a rough equivalent. But really there are no comps to the Hollywood way; you'll just hurt your brain trying to imagine them. The Peter Rice Takes DerbyTwo weeks and 5,000 takes later, we probably know less about Peter Rice's firing then we did when we first heard the news. Specifically, the reason for the most celebrated firing of the year remains shrouded in fog; the Occam's Razor explanation — Chapek was threatened by a rival — not quite breaking down the sense that... there must have been something else. Must have been! It's the abruptness, we're told. And lack of a parting gift — a little $40 million production deal for a pillar of the community. “Chapek’s decision to fire a long-standing and well-respected executive in the most unceremonious possible manner set off waves of bafflement and, for many, outrage,” wrote Kim Masters. “The move came as a total shock to the industry and to the well-respected media executive” - Claudia Eller “Executives like that don’t grow on trees, several prominent industry players said....Both Rice and Walden are very well regarded execs.” - Mike and Nellie. The trades have spoken, with little to no examination of what he was actually doing these days, good or bad, beyond being the keeper of a sterling reputation. Which doesn't mean his dismissal wasn't shocking. Seeing a person fired is always a little shocking. In a town where a person's career ladder is more sacred than their family, to see violence done to that ladder is jarring. There but for and all that. But the biggest lesson here is: don't fire someone while being Bob Chapek. The former Bob fired, or at least suggested the exit door might be the right move, for stellar pillars of the community left and right —Tommy Staggs, Kevin Mayer, Dick Cook, Anne Sweeney to name a few. CEOs make changes. Sadly, that's what happens when you play the Game of Thrones. I'm not sure how many minutes Iger gave each of them in their execution meeting, but I didn't see the company throwing parades around the Matterhorn to celebrate the distinguished careers of their bygone C-suite honchos.
Similarly, I am not seeing a lot of demands for production deals for all the thousands of employees laid off from Disney and from every other studio over the past few years; or anyone even inquiring what sort of severance they received. Just this week, rumor has it, Netflix is going to bring down the axe on hundreds more employees. I'm sure that marketing assistant raising three kids on a single income would love a housekeeping deal; anyone want to check if she was offered one? She certainly needs a few years’ pay to tide her over more than Peter Rice does, whose great-great-great-grandchildren will be living very well even if he never collects another paycheck in his life. Or will any reporters inquire into how long the marketing assistant's boss spent with breaking the news to her before ordering her off company property immediately? The Rice takes invariably referred to PR as “beloved” and “highly respected” — words not applied in those pieces to Bob II. Which is the point. A head of a studio is allowed to make, is celebrated for making, brutal choices. But if he comes from outside “the community” and touches a head on the hair of one of the beloved members, well, sir, this means war. Which is not to say that it isn't brutal — firing certainly is. And for someone in one of these top jobs, to have to go through that on the public stage is particularly brutal; even given the manifold compensations for that, even given the “It's the life we've chosen” side, we can still feel for people who are in that spotlight on a terrible day in their lives. It's not a tragedy on the level of developing nation tsunami victims, or like, Uvalde, for instance - but its not the modern world at its most joyous either. More to the point, one can certainly question whether Disney is not worse off minus Peter Rice... Totally fair questions. But the implication at the back of all the stories — how dare this arriviste do such dishonor to Sir Galahad here, is more about the constant campaign to put Bob II in his place. Next time you read a journalist getting tough and talking like a gangster about Chapek, ask what other still-active studio head have they talked that way about in say, the last 100 years? The feeling is that Bob II is a safe target, and there is safety in numbers attacking him, as no one would have ever dared question Bob I, or Ted Sarandos before the fall. Despite the contortions to spell out why the board's statement of support of Chapek was a sign that he's lost the support of the board, there isn't actually much sign that he's lost the support of the board, and the assumption that the board is caught up in the daily trade drama is silly. Which isn't to say that the Rice cut was a good move. Or that there aren't problems in the Chapek regime. Just remember the Ankler's reader guide #7: When you read the word “beloved” applied to a Hollywood executive, hold on to your wallet. Adam and the AntsTwo, perhaps contradictory thoughts from the LAT's highly readable profile of Adam Aron.
Goodbye Yellow Brick Specialty Road…Not saying I’m a paragon of film nerd-dom, but I do work in this field and spend every day, all day, reading about and talking to people about the state of the film and TV business. Given that, THR’s critics list of the 10 best movies of the first half of 2022 contains exactly two movies I have ever heard of, and one that I have seen. As I say, I’m not running for Commandante of Film Twitter, but I do this for a living. Has the moment finally come when “independent film” — the entire greater festivalscape — has soared off into a world of its own and taken America’s critics with them? Only to touch earth to warn the rabble against Jurassic World every now and then and send out Tweets from the Film Crits Association papal luncheons?
New on The Ankler
© 2022 Richard Rushfield
|
CAA/ICM: Done Deal
June 22, 2022
0
