Creative Artists Agency has acquired a minority stake in Shepardson, Stern & Kaminsky, a New York-based advertising, public relations and corporate consulting firm.
As first reported in Monday’s Wall Street Journal (which earlier this year retained CAA to represent its feature articles for film and TV deals), CAA’s minority stake in SS+K is being touted as the first time a Hollywood talent agency has invested in a media/advertising company. It is also CAA’s first direct equity investment in an outside firm.
While neither party would discuss the terms of the deal, it’s understood that CAA’s investment in SS+K is worth around 40% of the company. The companies also are said to have signed an agreement by which CAA has the option in a couple years to purchase the remaining stake in SS+K, or dissolve the relationship completely.
According to the principals, the partnership is aimed at expanding CAA’s relationship with current and potential corporate clients, while providing SS+K’s clients access to CAA’s “cultural intelligence” and entertainment content to distinguish their brands and customer base.
“We know that we can help build consumer and corporate brands, but we also know that we need smart, experienced partners to do it right,” said CAA president Richard Lovett in a statement. “After working closely with SS+K for nearly two years, we believe they are the right people to help translate our cultural intelligence — the cumulative insights of our agents and artists into cultural tastes and trends — into powerful marketing ideas.”
CAA and SS+K already share two corporate clients, telecommunications firm Ameritech and design and retail house, Polo Ralph Lauren.
SS+K, which CAA first hired a few years ago to conduct an internal study of the percentery’s communication and operations infrastructure, will continue to be based in New York. SS+K has 60 employees and rings up approximately $12 million a year in billings. The company’s current client roster includes General Motors, Time Warner Cable, Chubb, TiVo (which previously announced a strategic alliance with CAA as well) and the USA Group.
“Popular culture has more impact than ever on how everyone today thinks about products and companies,” said Lenny Stern, a partner in 6-year-old SS+K. “Given its central role in the creation of popular entertainment, CAA is our ideal partner to help companies infuse their brands with some of the passion and loyalty people feel about their favorite films, television programs and music.”
The companies maintain that their goal is to combine their resources to develop “cultural marketing campaigns” that differentiate brands, promote products and build market share.
The investment in SS+K is not only the first for CAA, but also the first foray into advertising that the agency has made since former CAA head, Michael Ovitz, oversaw the Coca Cola account in the early ’90s.
The William Morris Agency approached Hollywood praisery PMK in 1991 with an offer to buy the company and make all the publicists into agents. PMK declined the offer; but eight years later the PR firm was acquired by advertising giant McCann-Erickson WorldGroup.
The news of the CAA/SS+K partnership comes as CAA’s inhouse head of corporate communications, Leslie Klotz, leaves the company to become senior vice president of executive development for Polo Ralph Lauren. In her new post Klotz’s responsibilities will include executive recruitment and strategic marketing for the company.
Klotz joined CAA two years ago, following a stint as director of marketing for Brown & Argus, a Gotham entertainment PR firm.
It’s understood that CAA will utilize SS+K in finding a replacement for Klotz.