CAA’s longtime leaders had a lot on their minds on the sunny afternoon in late October when Kevin Huvane, Bryan Lourd and Richard Lovett sat down with Variety for a no-holds-barred conversation in Lourd’s Holmby Hills backyard.
The trio talked about their unique partnership and why it has endured, the state of the talent representation business, how they’re thinking about succession plans for the agency and why they chose to speak out now.
How have the three of you made your partnership work for so long?
Bryan Lourd: We really do all know each other so well. We all have some sixth sense about what our individual strengths are, and we figure out a way to harness this in an egoless way. And it’s not just us. There are 35 people [at CAA] behind us and next to us that are exactly the same.
Richard Lovett: We have been uniquely in sync, as have our partners, like [CAA’s] Rob Light and Steve Lafferty. We have been together for 25 years as leaders. By some weird coincidence of values, we all want to leave the company better than we found it. We want to exit knowing [the agency is] going to be even better without me. We want it to outlast us and be better than when we were here.
Kevin Huvane: You can’t ask people to trust you unless they see that you practice that kind of trust. That’s where I think the three of us [excel], in that we trust each other. We have disagreements, but we always trust where it’s coming from. I think that filters out to the rest of the company when they see that this is valued. Friendship is valued, and working well together and treating people well is valued. People do see the bond that the three of us have.
Lovett: Bryan said it early on. You might as well be your authentic self because it’s going to come out anyway. We were adamant about people’s authenticity.
Lourd: And creating safety for that.
Lovett: Bryan and Kevin were way ahead of thoughts about that. We didn’t get it perfect, but in terms of what we really urged was individuality. It’s ironic because our competitors will say ‘CAA is corporate. It’s this or that.’ We chose to wear suits and ties to be respectful to the job and the heritage of the job. We were probably a little slow in changing with the times. But it was really an issue of respect for our jobs, for our company, for the people that we were privileged to lead and to our clients, who we thought would want to see we were considerate and that we were representing the heritage of the job.
Lourd: It’s the idea that you’d better learn what not to do. We had a really keen sense of who we did and didn’t want to be and what we wanted the company to be. What we wanted to do was to make sure that [CAA] would exist in a better way beyond us and not make it a cult of personality. The reason we’ve never done this is that we’re super conscious of that it’s not about us, it’s about the company.
The dealmaking environment in Hollywood is changing by the minute. What are you doing to make sure your clients are fairly compensated?
Huvane: Everything is new again — new technology, new platforms, new revenue streams. We are going to be the best advocates for artists and protect them at any cost. It’s what we do and what we take really, really seriously.
Lovett: The primary concern is moving from the upside of backend on the movie side to a buyout from a streamer. Understanding the value of what that buyout should be going for is one of the challenges…It goes back to a primary function that we have. When we control the IP, the book, the story, the idea with our clients and can create a seller’s environment, a competitive environment, then the numbers are as they actually should be. The artists achieve a market-based understanding of the true value of their work because we create a scarce item. Distribution has been commoditized, money is now available — talent is the scarce element.
Lourd: No one knows anything right now — unlike 15 years ago, where they had financial models that were pretty predictable with foreign when you were talking about features, or with syndication when you were talking about television. You could kinda know within a range what something was going to be worth and what the financial equation would be. It’s all up in the air now. Things like the Ryan Murphy deal [at Netflix] or any of the big [producer] deals — I bet we find they’re undervalued. There’s going to be a moment in the next cycle once these companies are all assembled and they’re all assembled for the most part. We can kind of see the landscape and where things are going. There’s going to be more competition for those needle movers who have the ability to create an idea and execute on that idea and reach large audiences or very specific audiences. I think they’re going to be able to demand more money, and they should.
Are you starting to feel the pain of losing more than 1,000 writer clients in April 2019?
Lourd: Yes and no. We haven’t analyzed what percentage that part of the business is down. It’s such an extraordinary time because of COVID that I think it’s all a false read. There’s no question they’ve damaged our business, not just now but in the future. These things writers work on that we put together sometimes take four to five years, or more. You don’t get this time back. You don’t make up the money. It’s just lost opportunity.
The lack of viewership data in the streaming arena presents big challenges for the creative community. Does access to information become a point of negotiation for creatives with leverage?
Lourd: Yes. It already is. There are absolutely looks behind the curtain in terms of where things travel and why they’re valuable or not. I think we’ll see different models emerge of what new studios look like that are independent and not committed to a single platform, and we are excited about that. To Richard’s point, it allows us to create a market. The longer anybody can control what they’ve created, the better off they are.
Huvane: It’s just not all about the deal, too. What people forget is that for artists, it’s not only a business transaction. It’s also, ‘Who gets me?’ And so a lot of our job is ‘How are they going to work with me?’ While we concentrate a lot on the numbers, we also concentrate on what is the best home for this project. That’s what really counts. They need our ability to suss that out for them.
Lovett: This is a human business. All the numbers and all the data and all of the stuff follow from human creativity. Good business follows good humanity.
You have tried to make that sentiment a cornerstone of CAA’s corporate culture. How do you make that work in practice?
Lovett: Our purpose was to create a culture — that’s a word that’s thrown around a lot without meaning. We believe in action. We have a one-sentence description of our business plan and our culture, ‘Take good care of each other and good things will happen.’
But how do you do that in the context of a rough-and-tumble business?
Lovett: It’s about the actions that support it. Returning inter-office phone calls first. Doing a task asked of us by a colleague as first priority. We do that every hour and every day and have for 25 years. And in doing that, this incredible thing happens, which is as leaders we wanted to create a place where people could trust one another. The intention was creating an environment of trust. It’s insane to work 15-hour days and weekends and not make it as nice as we can. Our culture puts the oxygen mask on the company first, so we can serve our clients.
Huvane: We think of ourselves as facilitators. We have a lot of people who have dreams. We all take that very seriously. How do we help them get that done?
Lovett: There is not a more passionate advocate anyone could have in the world than Kevin Huvane. You just couldn’t. It’s just not possible. Or a more compassionate and thoughtful advocate than Bryan Lourd — it’s just not possible. We could say that about hundreds of our colleagues. We feel proud of what we do and we care about what we do. We’ve dedicated our life’s work to this.
Huvane: We’re not selling widgets, we’re working with artists. I consider athletes artists, too — any sort of entertainer. And you have to look at all that, and it’s complicated. What we do is not just a standard ‘This is what we’re doing.’ It’s got nuances, it’s got compassion, it’s got aggression. It’s got all of those things.
Lovett: We’re really proud of a company that has been designed with our ambition that anyone could spend a career there. Many people have spent decades at our company and continued their personal growth. We’re proud of that and we are very clear that our job, our leadership mantra is ‘To lead is to serve.’ We try to give them as much room to grow and get out of their way. It’s our commitment.
Lourd: It’s not for everyone. It’s really hard. We are really demanding. We work our asses off. We are first in, last to leave, nothing’s too big or too small. To run that race seven days a week, 24 hours a day is not easy. Some people want a different lifestyle with less responsibility and less pressure. It’s really hard.
None of you sound like you are going anywhere soon, but what can you say about succession plans?
Lovett: We are so excited about all the of next generation of leaders that are coming up.
Lourd: We set up the board of the agency in January. It seems like 10 years ago. That’s part of what we’re excited about. We could get hit by a bus and the company would be fine. We’ve never been able to say that.
Lovett: In that board and beyond is a planned-for succession.
What are you looking for in the next generation of CAA leaders?
Lovett: Leadership is a commitment to the human beings in the company. It’s leading by example.
Lourd: It’s not a declaration you make. It’s leading by example and doing impactful work. A leader represents important clients in our company — that is deeply important. But for us we’re so committed. It’s about that day-to-day, hour-by-hour committed interaction with colleagues in our company by example and by support, and that’s what we’re so excited about in terms of the next generation of leaders. Wouldn’t you say…
Lovett: Oh boy…
Lourd: No, it’s good.
Lovett: We have never had this conversation…
Lourd: I would say this — there is succession in place and it could happen this afternoon. I think that one of the great things about the opportunity of working at this company is that if you’re an assistant and you’re committed and you’re good, you can run the company. That’s not true anywhere but at our place, if you have that interest and that unique Renaissance-person skill set and curiosity, it’s possible.
Lovett: We hope that it’s evident to our colleagues that the three of us don’t have a stranglehold on things. We are, as we’ve said in the past…
Lourd: What did we say in the past?
Lovett: Now we’re gonna get punchy. It’s planned obsolescence. The moment we are no longer useful, we don’t want to be in someone’s way over something they can do because that will stunt the growth of the company. We individually need to continue to grow so we’re additive, so we’re not stunting someone else’s growth.
Huvane: What Bryan said is correct. Should something happen to us, beyond the group of 12 people who are on that board, you see the bench and the depth of executives and agents we have at our company. It’s mind-blowing to us.
Lourd: We love the job more than ever before. I love the job. You’d better find the love for it. You can’t survive if you don’t.
Lovett: You can’t fake it.
Lourd: None of us want to do anything that’s ever going to hurt this company. Why would we spend our whole careers doing this? We want to be there as long as they need us. When they don’t need us they’ll tell us and that’ll be fine.
What was the origin of your relationship with (parent company) TPG and how did it change things?
Lovett: The simple fact is we had a relationship with TPG prior to thinking about [selling to] private equity. We didn’t run a process, we were too secretive. What [TPG] promised was financial resources, expertise, information and support without intrusion, and they would allow us as a minority investor and shareholder where they didn’t have any control to run our business. We would never have continued on to the next transaction where they became majority shareholders if we had any doubt about them continuing to keep their promises. Which they have. So they’ve been a really terrific resource.
Do you three own the rest?
Lourd: No. it doesn’t work like that. We control it in terms of the day-to-day, but there are other investors [Temasek, China Media Capital] that own pieces. Everyone we brought in came in because they were smart, they had reach and if we needed money to do anything that was expansionist, we wanted to have available capital. We haven’t ended up using it much. Everything we looked at we deemed not right for us. Either it was too expensive or it didn’t fit or it wasn’t part of the strategy. It wasn’t client-centric.
Private equity investors usually have a defined exit strategy. You’re going on a decade now with TPG.
Lourd: I know, and here we are 10 years later.
Will the marriage continue?
Will there be another transaction?
Lourd: We hope so.
Will it involve Wall Street or an IPO?
Lourd: We can’t comment on that. I don’t know if that is right for this company. We don’t close the door, but we don’t know.
Have you considered buying any other agencies?
Lovett: We are always looking. As Bryan said, there wasn’t something that was bought [in the industry] that we didn’t evaluate or explore, but part of the perspective of these 25 years is that we have stayed true to that set of original ideas. We had a purpose — a service company that expands to serve our clients and their interests. All the business that follows from that has been really expansive for us and exciting and fun. It’s our culture that supports it at all.