Though the same major talent agencies have ruled for decades, it’s not as if new entrants haven’t come along and tried to reshape the representation hierarchy in Hollywood. Think back to CAA cofounder Mike Ovitz’s attempt to make lightning strike twice when he launched AMG in 1998 — it was gone by 2002. Then it was ICM’s Jeff Berg’s turn with Resolution in 2013, only for it to go under one year later.
The history of agency veterans trying to become self-styled disruptors is repeating itself yet again in 2020, with former CAA TV lit agent/eOne video strategy chief Pete Micelli formally unveiling his new Range Media venture, prompting a web of agents from WME, CAA and UTA to join him in the last month. And Micelli is just the most prominent example of a string of agents leaving their employers in recent weeks to become talent managers.
The day after the Range Media news broke, WME partner Phillip Sun announced he is forming a representation firm named M88 with Macro founder/CEO Charles D. King.
Established lit agents David Stone, Ben Jacobson and Theresa Kang-Lowe have all stepped away since June from partner gigs at major talent agencies to embark on a similar path. Stone and Jacobson are launching a management company called The Framework Collective, while Kang-Lowe is starting her own management company with an overall deal at Apple.
This trend may feel very different than the defections of yesteryear because the ground is shifting underneath their businesses now with unprecedented intensity. But that doesn’t necessarily mean these new ventures are going to succeed.
If you’re at least any bit familiar with the talent agency business, you’ll know it’s been a rough couple years for the major players.
Disagreements over “packaging fees” in April 2019 culminated in a WGA lawsuit against CAA, ICM, UTA and WME, plus 7,000 WGA members firing their agents. WGA members have since been ordered not to work with agencies that haven’t agreed to the WGA’s terms on ending packaging fees.
Additionally, the rise of streamers such as Netflix has coincided with the decline of syndicated revenues and back-end upside for TV shows that are hits, meaning there’s less incentive to stick around at major agencies for long periods of time.
As if that wasn’t enough revenue disruption and legal fees to deal with, 2020 and COVID-19 hit next. Hollywood screeching to a halt in March ultimately led to layoffs at the Big Four agencies from May to late July. Another round hit ICM just last week. COVID-19 has also trimmed the number of productions agencies can profit from, led to reduced hours and spurred company-wide pay cuts at major agencies.
Less obvious is the underlying discontent toward the change in the uberagency model, which has broadened from client representation to tangential business lines like content production (see: UTA’s Civic Center Media and CAA’s Wiip) and live sports events (see: Endeavor’s UFC). That’s just not the business model for which some agents signed up.
Managers also have fewer rules than agents to play by — managers can produce and have their name on projects, which, for example, opens the door for new and potentially lucrative opportunities.
The funny thing, though, is agents have always had a tendency to look down on managers as a lower rung on the Hollywood ladder. That said, this moment hardly represents the first time agents have switched to this lesser position, though the success stories that have emerged from such transitions are few and far between.
Range Media is garnering attention because its pitch deck has been circulating, touting the promise of reinventing the business model by which talent can participate in revenues. It’s a sexy proposition but a notoriously difficult one to pull off, one that will be made even more so because Range’s backer is Trump-supporting hedge funder Steve Cohen. Good luck with that in liberal-heavy Hollywood.
True, it’s still early days for these new management ventures, and we should be careful not to overestimate the power of pull some of these former agents have at their new homes. The New York Post in late August reported that sources played down the strength of the Rolodexes of the agents joining Micelli, for example.
Micelli will count high-profile stars including Bradley Cooper, Tom Hardy, Keira Knightley, Taylor Kitsch and Michael Fassbender, while M88 has also already signed big names Donald Glover and Idris Elba.
But let’s wait and see what that means in terms of the creation of new businesses that will keep these A-listers sticking around. As Hollywood has always shown, loyalty only lasts so long.