Hollywood talent agency CAA is tightening its belt two years after its acquisition by a private equity firm with several top-earning agents leaving the company in recent weeks.
The once-undisputed Hollywood powerhouse began conversations as early as September about terminating some of its most expensive talent agents, a cost-cutting move intended to boost profit margins for owner TPG Capital, multiple individuals familiar with the agency and former employees told TheWrap.
Employees who have left in recent weeks include legacy agents with superstar clients like:
- Kim Hodgert and Kami Putnam-Heist (James Franco, Margot Robbie, Alden Ehrenreich between them)
- Veteran lit agent Spencer Baumgarten (Gore Verbinski, Jon Favreau)
- Nick Styne, 25-year movie agent to pop music’s biggest names (Justin Bieber, Ariana Grande) and other emerging talent
- Sean Grumman, a heavy hitter in the TV department for nearly 15 years with clients like “This Is Us” breakout Milo Ventimiglia and “The Walking Dead” favorite Norman Reedus
This group of agents represents some of the highest paid at the company and in the industry. Hodgert and Putnam-Heist have pivoted to become managers at Anonymous Content. Ten of Grumman’s clients have followed him to his new home William Morris Endeavor. The status of clients of Baumgarten – who went to ICM – and Styne – who is forming his own company – is still unclear.
An individual with knowledge of CAA’s internal operations said that the agency always transitions out agents at the end of the year, and prides itself on doing so quietly. The individual denied that there was any pressure from TPG to increase profit margins, and said that all business and personnel decisions continue to be made by the agency leadership.
TPG External Affairs Managing Director Adam Mendelsohn also denied that any pressure had been applied, telling TheWrap they are “very pleased” with the progress of their investment in CAA, led by President Richard Lovett and Managing Partners Bryan Lourd and Kevin Huvane.
“Personnel changes at our portfolio companies like CAA occur in the normal course and are driven by the companies’ management,” Mendelsohn said. “Suggestions that TPG would manage specific personnel decisions and expenses would be made only by people totally unfamiliar with TPG’s investment style,” the spokesperson added.
CAA declined to comment for this story.
Nonetheless, in the clubby circles of Hollywood agents and managers the word for months has been that year-end bonuses have been cut across multiple departments and that TPG has expressed concerns about spending on travel and expenses.
Budget cuts come at a time when CAA finds itself increasingly overshadowed by blood rival WME — a company that continues to expand beyond its core Hollywood business through acquisitions like its recent $4 billion purchase of Ultimate Fighting Championship.
Last month, President-Elect Donald Trump even called co-CEO and his former agent Ari Emanuel the “King of Hollywood.”
Another competitor, UTA, has laser-focused on its core business of representation. Not only did the relative upstart recently take “Modern Family” star and endorsement horse Sofia Vergara as well as James Franco from CAA after Putnam-Heist’s exit, it took the majority of CAA’s comedy department in a 2015 “midnight raid” — resulting in a bitter lawsuit between the two companies that is still not resolved.
A veritable fab five of agents — Jason Heyman, Martin Lesak, Greg Cavic, Nick Nuciforo and Gregory McKnight — first considered the move when TPG bought its majority stake in CAA for $225 million in October 2014, TheWrap reported at the time.
It was a defection made mostly over money. The agents — who collectively represented Chris Pratt, Will Ferrell and Melissa McCarthy to name a few — wanted bigger salaries.
CAA seems to be actively looking to diversify in the mold of WME and TPG seems committed to its investment. This week, media reports said TPG and CAA were exploring a TV production entity, one that would produce premium $5 million-per-episode programming in partnership with former ABC chief Paul Lee.
The agency has had a storied and contentious history that was chronicled this year in James Andrew Miller’s book “Powerhouse: The Untold Story of Hollywood’s Creative Artists Agency.” It focused largely on the relationship between founders Michael Ovitz and Ron Meyer, who left the agency in 1995 for top studio jobs.