CAA’s top team eyes over $200mn payout in Pinault deal

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Creative Artists Agency’s top staff are in line to pocket more than $200mn as part of the acquisition of the Hollywood talent agency by the Pinault family, according to terms of the deal obtained by the Financial Times.

CAA top executives including co-chair Bryan Lourd could sell a 5 per cent stake in the deal, reducing their holding in the business to about a third, according to documents shared to potential lenders. The remaining stake would be worth about $1.8bn, according to FT calculations. A final decision on a payout has yet to be made, a person close to the matter cautioned.

The potential windfall highlights the surge in the agency’s value since US buyout fund manager TPG acquired a minority stake in 2010, the first in a series of private equity investments in the talent management industry.

The details emerge as Hollywood remains shut down due to strikes by the unions representing screenwriters and actors, many of whom have highlighted the pay packages of studio chief executives such as Disney’s Bob Iger and Warner Bros’ David Zaslav. 

TPG’s initial investment valued CAA at about $700mn, according to people with direct knowledge of the deal. Key CAA leaders then retained a 65 per cent stake. Four years later, TPG invested another $225mn to become the controlling shareholder, in a deal that valued CAA at $1.1bn.

In 2021, the buyout group moved its holding in CAA into a new fund backed by three large investors as an alternative to a listing or a full sale. Now the Artemis deal, which is expected to close by the end of the year, values the agency at more than $7bn, including debt.

“CAA transformed from a services business culture to an equity culture,” said a person familiar with the matter. “It went from being less about the annual salary [of the agents] to the collective value of the company and long-term value of the clients.”

The holding company owned by French billionaire François Pinault and his children will end up holding a 56 per cent stake, the documents show. Other investors including Singaporean sovereign wealth fund Temasek will own about 11 per cent.

Artemis, whose other holdings include a controlling stake in luxury group Kering and auction house Christie’s, is planning to invest $2.8bn of its own money and have CAA borrow $425mn in loans, according to the documents.

TPG, CAA and Artemis declined to comment on financial details.

The agency’s value has soared in recent years as investors have grown more enthusiastic about the talent business model based on superagents such as Lourd, who represents Hollywood royalty including Scarlett Johansson, Viola Davis and George Clooney. CAA also represents actor Salma Hayek, the wife of François-Henri Pinault, who is Artemis’ managing partner and Kering’s chief executive.

Other private equity deals in the agency world included Silver Lake’s investment in Ari Emanuel’s William Morris in 2012 and EQT’s investment in United Talent Agency last year.

CAA reported $1.5bn in revenues last year, with its largest unit — managing Hollywood stars and offering services to the feature film and television industries — growing 13 per cent to $666mn. Sales generated by its sports business, which involves representing athletes such as Manchester City’s Jack Grealish and Real Madrid’s Eduardo Camavinga, grew 28 per cent to $492mn.

However, operating income slid 15 per cent to $181mn, while net income dropped by more than 75 per cent to $50mn, the documents show.