What The $7B Acquisition of CAA Means For The Live Industry

Yesterday’s majority stake purchase of Creative Artists Agency (CAA) by Artémis, an investment company helmed by French billionaire François-Henri Pinault, reverberated throughout the live industry. For the first time since 2014, one of the world’s largest agencies had a new majority owner. And while sources insist the deal will change little about CAA and its operations, much as how Artémis’ famed luxury brands, which include Gucci, Saint Laurent, and Balenciaga, operate under Kering, there are still several key takeaways from the deal that bode well for the agency business.

CAA’s valuation in the Artémis deal, which was widely reported in the $7 billion range, speaks to agencies’ growing values. That valuation dwarfs the $1.1 billion that CAA was valued at in 2014 when TPG, the Texas-based private equity firm, first held a majority stake in CAA. Nine years later, TPG has reaped a 536% return on its investment.

The fact, too, that this mega deal transpired more than four months into the Writers Guild of America strike, which SAG-AFTRA joined two months in, with so much handwringing over digital streaming studios, billions in lost revenues and the future of film and TV seemingly rather bleak, it’s clear that investors still see immense value in entertainment.

It’s telling, too, to compare William Morris Endeavor, CAA’s primary competitor, which is now public and owned by Endeavor Group Holdings. When Endeavor held its initial public offering in April 2021, which included IMG Worldwide, UFC and Professional Bull Riders Association. among other assets, it was valued at a whopping $10.3 billion. Two years earlier, however, in 2019, when Endeavor first attempted an IPO, it pulled the plug the day before “due to weak investor demand,” according to Reuters. What a difference a few years can make on realizing the intrinsic value of entertainment, especially in the wake of a global pandemic, which not only helped WME’s value, but also hastened live music’s triumphant record-setting years currently upon us.

The Sept. 7 deal also underscores the natural synergy between fashion and entertainment and, for our purposes, musicians. For decades, artists have had a heavy hand in fashion. The influence of the British invasion, hippies, rockers, funksters, punkers, emo’ers, gothers, metalheads, grungers, country stars, hip-hoppers and pop chart toppers have had on runways is immeasurable and vice versa.

Hip-hop, though, more than any other genre, has taken that inspiration to the stratosphere dating back to at least the early ’90s with brands like FUBU promoted by LL Cool J and Russell Simmons’ Phat Farm and later Jay-Z’s Rocawear, Diddy’s Sean Jean and so many others, who formed the foundation that turned hip-hop swagger into the fashion juggernaut it is today.

There’s good reason why Drake’s spectacular 2023 “It’s All A Blur Tour” features a giant statue of Virgil Abloh. The creative genius and fashion designer, who passed away in 2021 at age 41, was the artistic director of Louis Vuitton’s menswear. Before that he interned at Fendi (alongside Kanye West) before starting Off-White, a company that helped transform streetwear into high fashion. He was also a good friend and collaborator of Drake’s and many other hip-hop artists. It’s notable that since his passing, the musician/producer Pharrell Williams has since become Louis Vuitton’s artistic director.

There are far too many other artists dipping into fashion to recount them all, but witness H.E.R. representing L’Oreal Paris, or West’s Yeezy collaboration with Adidas (which is now worth bupkis), Drake’s OVO working with

Nike and Clarks or Harry Styles and Gucci. And having your agency’s largest investor own some of fashion’s biggest luxury brands is in no way detrimental to your clients’ interests. One stop shop, indeed.

On the other side of the coin, Artémis’ Kering recently ventured into film with Saint Laurent launching Saint Laurent Productions in April. The company debuted a short film by the brilliant Spanish director Pedro Almodóvar, which premiered in May at the Cannes Film Festival. Kering, significantly, is an official partner of Cannes since 2015, because once again luxury brands are inextricably tied to entertainment and celebrity.

Another takeaway: the agency business is again consolidating. This is the opposite of what transpired during and after the pandemic when a slew of music agents, some of whom were downsized, went independent. This included the launch of new agencies like TBA Agency, Arrival Artists, Mint Talent Group and Paladin Artists. That trend, however, may be done.

A few weeks ago, WME picked up the Austin-based True Grit Talent Agency; In June AGI merged with APA to form IAG, and the year before aligned with influential UK-based agency X-ray Touring; the very same year CAA acquired ICM in a $750 million deal just as Endeavor Group Holdings picked up World Wrestling Entertainment – and that comes only a year after Wasserman acquired Paradigm’s music holdings in 2021.

Often the agency business seems like a “Game of Thrones,” as agency heads, agents and artists regularly jump ship to other agencies (Et tu, Brute? is often the subtext to an agency news story). It makes sense considering the nature of being an agent, which requires a keen sense of business, hard-nosed negotiations, a head for finance, a network of relationships and the desire to fight like hell for your clients. Those same traits are on full display when agents or agencies fight like hell for themselves, leave for a competitor, form their own agency, merge with another talent company, go public, acquire an agency or change ownership. It’s what makes this part of the live industry ecosystem wildly dynamic and utterly fascinating.