LA's Talent Agencies Are On The Brink
The entertainment industry, like so much of the world, is closed. Movie theaters are padlocked, live performances canceled, and virtually every television series and movie has ceased filming.
The pandemic production stoppage has left tens of thousands without jobs. The union representing film and TV crews estimates about 120,000 of its members are unemployed. While the shutdown has a direct impact on all of the actors, writers, directors and technicians who no longer are working, it also has a profound effect on the people who help them find jobs: talent agents.
And one of Hollywood’s most prominent agencies could soon be in serious trouble.
Like show business managers and some lawyers, talent agents typically take a commission (often about 10%) of their clients’ income. When there are no new paychecks or deals, there’s obviously no new commissions — the lifeblood of an agency. And the coronavirus shutdown was preceded by a dispute with the Writers Guild of America, where screenwriters in 2019 fired their agents en masse.
In late March, the Paradigm Talent Agency, which employs about 700, said it was temporarily cutting about 14% of its staff. A week ago, the United Talent Agency, with about 1,200 employees, announced across-the-board salary cuts.
But few agencies could be as vulnerable to the production freeze as industry titan WME.
WME said on Wednesday that it will cut much of its staff compensation between 5 and 30 percent. Those making less than $65,000 would not be affected.
With clients as prominent as Dwayne “The Rock” Johnson, Elisabeth Moss, Matt Damon and Octavia Spencer, WME (the result of a 2009 merger between the William Morris and Endeavor talent agencies) has spent the past decade rapidly expanding its roster of entertainers. But unlike other big agencies, WME has acquired the actual producers of live events--a diverse slate of businesses like professional bull riders, the Miss Universe pageant and the Ultimate Fighting Championship.
Those deals have left parent company Endeavor Group Holdings with a staggering $4.6 billion of long-term debt, according to security filings tied to a failed September attempt to take WME public, the first such attempt in Hollywood history. That offering was supposed to raise $600 million for WME, which, according to generally accepted accounting principles, lost about $134 million in the last quarter that it reported publicly.
In those same filings, the agency said any work stoppage “could have an adverse effect on our business, financial condition and results of operations.”
WME, which did not immediately respond to a request for comment, said last week it was laying off about 250 people, a small fraction of its 7,000-employee workforce. If the fall out from the pandemic continues on its current pace, those WME job losses may look tiny in the very near future.
MORE ON CORONAVIRUS