The long, unhappy relationship between the principals at PFD, the U.K.’s largest talent and literary agency, and their parent company CSS Stellar has finally reached the divorce courts.
Most of the leading agents, led by Anthony Jones, Tim Corrie, Lindy King, Dallas Smith, Maureen Vincent and Pat Kavanagh, have handed in their resignations, after CSS Stellar rejected their $8 million bid to buy out the agency.
They will launch a new London-based company together after Christmas. Their clients, from Keira Knightley, James McAvoy and Kate Winslet to Richard Curtis, Mike Leigh and Tom Stoppard, are expected to go with them.
So how did it come to this? PFD, originally Peters Fraser & Dunlop, is London’s oldest tenpercentery, tracing its roots back 83 years. But if the 20 agents responsible for 75% of its revenues head out the door, it will become a shadow of its former self.
Unless, that is, CSS Stellar, the publicly-quoted sports promotion group that bought PFD in 2001, can suddenly reverse years of mismanagement and conjure up a miracle.
David Buchler, an accountant specializing in corporate turnarounds, took over as executive chairman of CSS Stellar in August after a boardroom shake-up. He made his first big move last week, appointing Caroline Michel, previously the U.K. managing director of William Morris, as PFD’s new chief executive.
It’s a splashy hire — glossy, designer-clad Michel is one of the highest-profile figures on the Brit literary scene. She enjoyed a stellar career as a publisher, and as the wife of former Faber boss Lord Evans, she’s half of one of London’s most glamorous power couples.
But when it comes to the agency biz, she’s a rookie — certainly compared to the centuries of experience shared among the venerable PFD crew. She joined WMA’s small London office just two years ago, and remains largely unknown in the film and TV scene. The effusive statement issued by WMA on her departure didn’t exactly drip with regret to see her leave for a rival.
Buchler says her appointment is “the first step in everyone understanding I am very serious about this business.”
But if he hoped Michel would dissuade the dissidents from quitting, he was in for a shock when only three PFD agents showed up for a ceremonial first meeting with her Sep. 12. Far from inheriting a European powerhouse, Michel will be left with a boutique largely based on the literary estates repped by veteran book agent Michael Sissons, who is staying put.
She will, at least, still have the revenues from recent talent deals to tide her through for a year or two. The exodus of agents should actually result in a short-term financial upswing, as the overhead is slashed but earnings on old contracts continue to flow in.
For the departing PFD toppers, it’s a huge step to start afresh without this cashflow. But their determination proves just how furious they had become with their parent. A source close to the agents said, “The continuing rows inside CSS were not conducive to the best interests of their clients, and nor was being publicly owned.”
The sale to CSS Stellar never delivered the benefits they hoped for, but placed them under uncomfortable constraints. Over the six years since the deal, the company’s market cap collapsed from $180 million to $24 million today, as investors lost all faith in the CSS management.
Earlier this year, the agents offered to buy back PFD, but their $8 million bid, only half the value of the company on CSS Stellar’s books, was stonewalled.
This summer, an activist shareholder, Duncan Soukrup, failed to wrest control of CSS Stellar, and sold his 30% stake for $8 million to a consortium fronted by Buchler. The new board rejected the bid from the PFD agents, along with a bigger offer from Chorion. “PFD has got a tremendous future,” Buchler said. “It’s not a business that’s being sold, either to its management or anyone else.”
PFD certainly has a tremendous history, but building a comparable future in such turbulent circumstances will be a challenge. Meanwhile, some of Blighty’s most important agents are shaking off the corporate fetters to launch a new shingle with renewed motivation — just when their biggest rival, Duncan Heath‘s Independent, has relaunched itself under a new brand. The London agency scene just got interesting again.