Hollywood Agents
ICM, one of the biggest Hollywood agencies, just bought out smaller rival Broder Webb Chervin Silbermann Agency, which works mostly in the television business. According to an article in the Financial Times ("ICM acquires rival", 7/28/06)
Hollywood has been bracing for a possible consolidation among the major talent agencies, which include ICM, William Morris, Endeavor, United Talent Agency and industry leader Creative Artists Agency. The speculation has been prompted in part by the recent consolidation among the studios that hire the agencies' clients.
Entertainment industry agencies like ICM have a crucial role in the entertainment business. They act as the representatives of actors (as well as directors and screenwriters) in their dealings with the studios that hire them; they promote clients for upcoming roles, negotiate their wages, and protecting their income from subsidiary rights (for example DVD and TV replay revenues). On the other hand, they make decisions on what prospective actors are likely to make it in the business, and who they should spend their time promoting. As such, they act as gatekeepers: if you are not represented by one of the big agencies, chances are you won't get the roles; you'll have trouble getting a chance to audition for the roles.
The five biggest agencies act both as an oligopoly (between them they have most of the "big brands" movie makers need) and an oligopsony (they are a small set of "buyers" that can help anoint the next stars). That makes them what we call oligonomies. While one agency is the dominant one (CAA), others also have collections of significant clients.
The agencies form a small part of a layered oligopoly that has at its core theater chain owners or network bosses, production studios, and the agencies. On the outside are the audience, on one end, and employees (including actors) on the other end. (We could also add other layers, such as cable channel operators, to the mix.) Most of the top firms are privately held and don't release their figures, but the pecking order is made pretty clear by the fame of the stars each represents, and by how few big stars are not represented by the big five.
The actual merger (price unannounced) is not so big, but ICM, for one, has a $100 million war chest provide by Merrill Lynch, for the purpose of making more such acquisitions. And it's likely that others among the big players will feel the need to follow suit in grabbing up small players. The strongest current rumor is a tie-up of UTA and Endeavor.
ICM's growth, as the Financial Times article indicates, is the contagion of concentration from one layer to another within an industry. As studios get bigger, than agencies have to get bigger as a counterweight, to make it harder for them to be played off one against another. And, as digital technologies in both production and distribution evolve, so too must the agencies.
This is a highly competitive business, where the big name actors are the commodities and there are constant attempts to steal big names and to sign up the next generation. It's not a cozy oligopoly. On the other hand, it is a very tight-knit group, with the big five agencies all located within a small area in Beverly Hills, eat at the same restaurants, and with agents from one company often moving to another (perhaps bringing along their best clients).
The Big Five agencies and some of their clients
| Agency |
Sample of clients represented |
| Creative Artists Agency (CAA) |
Tom Cruise, Tom Hanks, Nicole Kidman, Angelina Jolie, Julia Roberts. Lindsay Lohan, George Clooney, Brad Pitt, Jennifer Aniston |
| International Creative Managment (ICM) |
Richard Gere, Mel Gibson, Denzel Washington, Steve Martin, Jodie Foster, Orlando Bloom |
| William Morris Agency (WMA) |
Ray Romano. John Cusack, Halle Berry, Brendan Fraser, Jackie Chan |
| United Talent Agency (UTA) |
Harrison Ford, Johnny Depp, Jim Carrey, Owen Wilson, Keira Knightley, Harrison Ford, James Gandolfini, Vince Vaughn |
| Endeavor |
Jennifer Garner, Jude Law, Matt Damon, Drew Barrymore. Chris Rock, Adam Sandler |
2:37:56 PM 
|
|
