UTA Sells Minority Stake to Investor, Buys Top Music Agency

UPDATED: UTA is taking more big steps to expand its operations, selling a minority interest in the agency to investor Jeffrey Ubben and acquiring the Agency Group, a top music booking agency.

Ubben is founder and CEO of San Francisco-based private equity firm ValueAct Capital, but the deal with UTA is described as a personal investment from Ubben. ValueAct manages $18 billion in assets and has made significant investments in Microsoft, 21st Century Fox, Adobe and CB Richard Ellis, among other companies.

The influx from Ubben “will provide growth capital and help fund strategic initiatives such as the Agency Group acquisition,” UTA said. Ubben will become a minority shareholder of UTA and a non-voting member of the agency’s seven-member board of directors chaired by Jim Berkus.

The Agency Group acquisition turbo-charges the agency’s music operations, and affords other UTA clients access to its considerable expertise in the touring arena, a lucrative source of profits for talent agencies.

The Agency Group, formed in 1981, has 95 agents spread among offices in London, Los Angeles, Miami, Nashville, New York, Toronto and Malmo, Sweden. Among the 2,000 artists on its roster are Muse, the Black Keys, Paramore, Guns N’ Roses, Rush, Dolly Parton, Lynyrd Skynyrd and rising stars such as Bring Me the Horizon, Foster the People, the Kills and Marianas Trench. It also reps a host of artists in other genres ranging from jazz to classical to EDM, and it has a department devoted to repping celebrity chefs.

UTA had been expected to make a move to bring in some outside capital after a growth spurt during the past few years that included bringing in more than a dozen agents from CAA earlier this year — a move that rocked the biz and sparked a lawsuit from CAA. UTA also acquired the New York-based N.S. Bienstock agency, specializing in TV news and hosts, and moved into new headquarters in Beverly Hills.

“UTA’s brand and the strong leadership position the company for exceptional growth as the global demand for great content continues,” Ubben said in a statement. “Building on a long tradition of success, UTA is making aggressive strategic investments across the media landscape. I am excited to be able to invest in such a high energy organization.”

UTA CEO Jeremy Zimmer said he has known Ubben for several years, and he emphasized that he was coming in as an individual investor, not through his firm. Private equity investments have flowed into the industry’s two largest agencies, WME-IMG and CAA, during the past five years as those agencies sought to expand and diversify through acquisitions. That influx has industry insiders watching to see how bottom-line-oriented investors fare in the traditionally insular agency world. ICM had a rocky six-year run with its private equity partner, Rizvi Traverse, and wound up undergoing a management buyout in 2012.

“Unlike a more traditional private equity investment, we have taken a personal, long-term investment from a thoughtful and capable executive. We are lucky to have him on the UTA team,” Zimmer said. In an interview, Zimmer emphasized that  UTA’s new investor would not be driving for instant changes or spikes in revenue. “There is no clock ticking. There is no requirement for him to exit the business by a certain period of time,” Zimmer said. “He is not going to have a hand in how we operate the business on a day-to-day business. To the contrary, he is going to be a very thoughtful but very hands off partner.”

Music publication Billboard suggested that UTA had a hole to fill following the departure in April of Rob Prinz, who founded the agency’s music division in 1991. Prinz departed for ICM,  along with his wife and fellow agent, Nikki Wheeler. The duo represent Celine Dion and Bob Seger, among others and Billboard called UTA’s music operation “light” following their departure.

But sources familiar with UTA suggested that the agency felt the veteran duo was not bringing in enough new business and was sought to go in a new direction. The attempt at a fresh start was first signaled in June, when UTA lured music agent Jbeau Lewis away from CAA. He will now work with Agency Group founder and president Neil Warnock, who will become worldwide head of music for UTA. Warnock will report to Zimmer and UTA managing directors David Kramer and Jay Sures.

“We are excited to bring the Agency Group into UTA,” the trio said in a statement. “Neil and his team love music and love their clients. They care deeply about being able to provide full-service representation, which is a desire that perfectly reflects our values.”

Said Warnock: “This is a major value-add for our clients, utilizing (UTA’s) scale and complementary resources to bring new and exciting business opportunities for all of our artists.”

Investment bank Moelis & Co. and David Eisman of Skadden, Arps, Slate, Meagher & Flom advised UTA on the transactions.

(Pictured: Jeremy Zimmer, right, and Neil Warnock)

 

 

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