B (4:41)

Thanks Dan. Thanks for inviting me.

A (4:44)

Let's start down with the big one. Wasserman. What's your current read on how you think this situation will play out for Wasserman moving forward?

B (4:54)

For the Wasserman agency or for Casey Wasserman?

A (4:57)

Let's start with the Agency.

B (4:59)

Okay, well, they changed their name to the Team. Their email signature was Team Wass. In the short term, it was about distancing themselves from Casey Wasserman because his name was in the Epstein files, he was radioactive and clients were leaving artists. I'm sure that the artists were just concerned about bad PR rubbing up on them. But the thing is that artists often have a very close relationship with their agent. They're often loyal to the person who is their agent I think the artists probably don't care all that much about who is the corporate owner or who is the investor, but they like the person who handles their bookings. In general, the agency business is just a service business. Historically. You're there to make money and get work for the client. And if there's something in the way about your business, then that's a big problem for you. The agents and the artists need to separate from his name, which is, you know, ironic because his name was partly what was so valuable about that company and his ability to build it in the long term. And we'll see how long it is. I mean, it might not be that long, but they're going to sell the company and the investor is a private equity company called Providence. They don't want a fire sale price. Right. So I think it'll take as long as it needs to take for them to get a price that they think is satisfactory.

A (6:43)

Yeah, there's just so much brand recognition tied to it.

B (6:46)

Right.

A (6:46)

If you're moving from one three letter acronym agency to another, that's one thing, but it's literally your last name. And this last name, you know, his grandfather is the mogul that built Hollywood, modern Hollywood as we know it in Lou Wasserman. Right. So I think that adds a lot to it. You mentioned a few of the artists. Chapel Roan was one of those that had mentioned that she no longer wanted to be represented by the agency. But the other thing you mentioned is something I kept going back to like, what is this business at its core? Right. Because I know plenty of artists and their agents who have left one agency to go to the other. And the artists tend to stick with the underlying agent even if they move from WME to Wasserman or to UTA vice versa. So that piece of it definitely is there. And in terms of the sale price itself, that's the piece where it does seem to be a bit different depending on how we see it play out. Because there's some talks of could this be a bigger sale that includes the entire agency, that includes all of the aspects of where it represents talent, whether it's in sports or music. Also some of the brand consultancy and advisory types of business. There's a number of different facets of the business, but there's also talks about, okay, is there a smaller portion of this that is purely Casey's share of the business, which public reports have shared that it's around 29% of the business that he owns? So would the owner of this be buying a entire conglomerate of an agency or are they just buying a ownership stake and they don't really have as much control, let's say, as others? So that's an interesting angle. And I think the last thing you mentioned around who the buyer could be, I think a lot of people are wondering, could this be a strategic or a financial buyer? I probably lean more financial just because I think with the current state of the DOJ and with some of the scrutiny that other M and A deals have gotten in this space, we probably would see it go more to the financial side than strategic, if I had to guess.

B (8:50)

True. I mean, I would say normally that would be a concern whether there'd be a regulatory issue, but Trump antitrust merger enforcement is a big question mark at the moment. We're seeing that play out with Live Nation where supposedly Ari Emanuel told Trump, hey, you should just get them to settle this case. I think that there's a lot of parties that could be interested. It's been pretty sexy for a while now for private equity to get into the agency business, to get into that part of Hollywood and the entertainment business. There's been a lot of deals over the last, you know, a decade or more. It would probably be a sale of the whole company as opposed to like splitting off the music division or something. Because part of the value that the agencies claim for themselves is in like the synergy of it all. It's not just a music booking agency. It's branding, it's the marketing, it's the connection to Hollywood sports. I mean, that's, that's kind of what your William Morris and caas also say about themselves is that, and this is part of, I think, how they attract clients, how they sell their services to clients, is to say, you're an up and coming music star. Congratulations. We can book you a big tour, but we can also get you into Hollywood movies. We can also get you a brand deal. We can help you develop whatever business you want to be in. I think it's an open question of does that all really work, But I think the selling price would be dramatically lowered if part of it was spun off from the hole. I don't know what Casey Wasserman's share is. There's been a lot of different numbers thrown around. It sounds like it's a minority, but exactly what the minority is and exactly what his control is in terms of voting or something else, I think that's less appealing to anybody. When you get into the billion dollar range for the value of a company, do you want to be the 40% partner or do you want to be the 51% partner? I think people are used to this as the state of the agency business. And think about how much things were changed during COVID People leaving agencies, starting their own. It's a part of Hollywood that's always been fascinating and there's a lot of power and money there. But it's been pretty sort of steady and secretive, you know, or was for a long time. And I think kind of in the 21st century and maybe only in the last decade really we've been seeing all kinds of changes happening in the way those businesses are run.

A (11:34)

Yeah. More than ever these big private equity firms, whether it's your Providence, Silver Lakes, they see what's attractive. Sure there's the commission that comes from the underlying talent and the artists they represent. But with the rise of tech and the amount of money that these big tech companies have and their desire to partner with talent in different ways has indirectly flowed a lot more capital and money into these businesses. And multi hyphenates have existed in entertainment for decades. That definitely isn't something new but. But it does seem like the proliferation of them and the amount of talent that gets to participate in different fields in different areas one way or another has increased in a lot of way. And that does increase at least the opportunity for what these partnerships could look like. I think whether or not that plays out. I still do think it is quite top heavy as it was 30 years ago. But it does feel like at least the opportunity of what people expect it could be. The expectations there do feel higher than they were before.

B (12:34)

And don't forget about sports. I mean sports is a very important piece of this. Where William Morris, or maybe it was called Endeavor at this point they bought IMG Casey Wasserman started building his business with sports and was very successful at that. And the connections between sports and entertainment and branding that is a very important piece of this about just how the entertainment business has evolved. And I'm sure that's part of what's driven some of the private equity. Remember that Wasserman. My understanding is that their marketing divisions are higher margin businesses than the commission based talent representation.

A (13:19)

Right. In some ways the talent both helps them as marketing for the firm to be able to help get more of this higher margin business.

B (13:26)

I think so there is an issue there that the commission business is a relatively low margin business and there's a lot of risk there where the agency has a problem with its talent that can be totally deadly. Because unlike say the record company which has a bunch of copyrights and a bunch of, you know, they control product and Live Nation with their tickets. They're selling a lot of tickets for a lot of people. So losing a record company, losing a big artist is bad for them. But it doesn't necessarily have to be devastating. An agency losing some top artist clients, especially if it's because of some problem at the agency, that's a death spiral. So they had to do something about that.

A (14:14)

Even just going back to Casey himself, there were other people that work in entertainment and sports that were listed in the Epstein files. Maybe they didn't have the same salaciousness of the emails that were disclosed and, you know, shared publicly. But still, if you are the owner of the New York Giants, let's say that's a bit different than someone who is the public face of an agency with their name and also leading the upcoming Olympics. So just a different level of exposure. If you love listening to Trap Ital, I want to put you onto another podcast that I think you'll really enjoy. It's called One Song. It's hosted by Diallo, Riddle and Luxury. Each episode unpacks one iconic track. They break down the original musical stems so you can hear how the song was built, while also diving into the creative choices and cultural forces that shape the song. If you're into how music, media and culture intersection, this show is very much in that lane. You'll hear songs you already love in a completely new way. Check out One Song wherever you get your podcasts. Let's take a break for our chart metric stat of the week. Jay Z's been in the news quite a bit over the last couple of months. In February, he released the original version of his debut single, Dead Presidents, from his 1996 album Reasonable Doubt. Jay Z was also named the headliner for the Roots Picnic, and Jay Z will be performing at three stadium shows at Yankee Stadium in July to celebrate the 30th anniversary of reasonable doubt and the 25th anniversary of the Blueprint. All eyes are on Jay Z. People are expecting him to potentially release an album this year. Could he have more things up his sleeve? But the one thing I wanted to see is what do his current streaming numbers look like? Well, on Spotify, there has been a slight bump, but we'll have to check back in later to see if there's more. From the beginning of February to now, it looks like Jay Z's streams have increased by around 1.5 million for Spotify monthly listeners, from 40 million monthly listeners to 41.5 monthly listeners, we'll check back in on this, especially as it gets closer to both the Roots Picnic and, and those stadium shows at Yankee Stadium. Let's get back to the show.

B (16:38)

I mean, there was some commentary about was, was Casey's sin bad enough to cost him his entire company? And you know, there were some people who thought the answer is no. I'm, I'm not, I'm not making an opinion myself. But I think it's worth saying that unlike a lot of other powerful people who we've seen how their careers have nose dived because of that, Kayce was not accused of trafficking women and underage girls. He had this salacious email exchange with Ghislaine Maxwell. Looked like he was maybe having an affair with her when he was married. Bad luck, right? But the connection to Jeffrey Epstein and what he's been accused of was not as bad as what we've heard about some other people. So I do think it's unfortunate, but I just think at this moment, right now, this sort of political environment, having your name in the Epstein files for anything other than being an adversary to him is just terrible. And Casey Wasserman has had some controversies before that he survived. And it may just be that it was like, enough is enough.

A (18:00)

I think with that though, it's probably a good opportunity for us to talk about a few other agencies because you have Brian Lord at CAA a bit older, in his mid-60s. You have Zimmer with UTA as well, announced that he'll be stepping down. So it does feel like there is this changing of the guard that is starting to happen with some of the larger agencies. And it'll be interesting to see what leadership and all of that does look like with the team moving forward. But the same way that we've seen with companies like Spotify or Netflix, where after the lead founding figure moves on, they are starting to go more into these co CEO roles because the company's just grown and it's so multifaceted and the leadership looks quite different in some ways and it seems like we're starting to see that play out with some of these agencies. Now, granted, Brian Lord from CAA has not stepped down. That's not what I'm saying. But even if you look on the music side of things, CAA recently brought over Lucy Dickens from WME who had stepped down. She was a co head there at WME for the contemporary music side and she's now managing director, which is the same title that Rob Light has at CAA for music. He's Been at that company for 40 years. He's very much part of the origin story with Michael Ovitz and a lot of others. So I do wonder, between there and UTA and some of the leadership transitions, will we see a similar type of move where there's less of that central key figure, key solid person that is looked at as leading everything. But they will be a bit more divided just given how multifaceted all of these agencies are.

B (19:33)

Good question. I don't know. But WME had two leaders. It had Ari Emanuel and also Patrick Weitzel. That's been the leadership for 15 years or so. The Lucy Dickens move is. Is very interesting. She was brought into WME not that long ago. I believe it was like 2019. It was shortly before the pandemic. She's from kind of British music business royalty and her father was a big record company person. Her brother is the manager of Adele and she's Adele's agent. She's accomplished a lot beyond that. She was brought in to WME in the relatively recent history and was in a high position there. But it sounds like CAA just offered her a bigger role. And it does have that look of possibly grooming her for a top role at the company. I don't think any of those big agencies, it doesn't tend to be the music agent that really runs it. Brian Lord, he's a Hollywood actor. Talent. Ari Emanuel, Jeremy Zimmer, they're not the people that came up through the ranks booking tours for musicians. It would be interesting if she ascends to that level as somebody who came up through the music world in terms of those big agencies. Music is kind of a stepchild there. They're big businesses, they're very lucrative. There's a lot of big name artists, but they tend to be secondary to the actors and the directors, the people who walk the red carpet at the Oscars. That's where the power is. The appeal is. I don't think that's going to change, but I'm just speculating. I don't know.

A (21:21)

Yeah, and a lot of that. Even if we're looking at where a lot of the revenue comes from and where it's grown. Yes. If you're looking at music, music has grown in revenue quite a bit. You look at the touring side, Live Nation has record revenue, especially from the down days of the pandemic, but even dating back to the pre pandemic levels of 2019. But even with that growth, I don't think that growth is anywhere close to what we've seen from the new TV contracts that a lot of these pro sports teams have had as well. Hollywood's a little bit different where, you know, on one hand the box office is not what it was pre pandemic, but on the other hand, YouTube and Netflix are very much part of Hollywood as well. And those companies are both stronger than they've ever been. So I think there's a few different ways to cut it. So yeah, I think similarly the talent landscape, it does feel like, at least right now, sports, Hollywood, then music.

B (22:15)

But I don't think it's just a matter of the dollar signs. I think it's like a kind of ingrained cultural bias that is there. The stars of Hollywood are just perceived as being bigger names, bigger gods than most musical artists. There's a famous story about how in the 70s when Warner Communications was being built, part of it was from the record companies of Warner Brothers and Atlantic and Elektra. But then some of it was also the Warner Brothers studio. The record companies were, were building the profit for that company. They made more money selling albums than they did movie tickets. And yet it was the movie studio that was the premier brand there. That was the, you know, the asset. And I think sometimes music is viewed as kind of kid stuff when it comes to pop music. I think that, like, nobody would admit it, but I think that that is probably the truth. I also think there's one other like dynamic. A lot of the biggest and smartest artists and music have taken more of their business in house. There's been gossip for a long time that some of the agencies don't take their full 10% to book the big tour. They're taking less. Part of that is just to is just the competitive business. Somebody must have sort of opened the door and set that precedent of some at some point. But I think that if you're an artist that's making hundreds and hundreds of millions of dollars on tour, it just becomes a little harder to justify 10% of 700 million DOL to the person who booked the dates. Did they get you that deal? Or are you just that famous as the artist and you're going to sell those tickets no matter who is doing the booking? So I think people like Taylor, I think Paul McCartney has been in that boat too. There's a bunch those are just, you know, those are just a couple and I can't remember all of them off the top of my head. But if you are thinking about what is the value of a big agency, it's having a bunch of big talent that is going to sell a lot of movie tickets, do a lot of big TV deals, go on a big, big, you know, bunch of tours. But you might be, if you, if you know how it really works, you might know that you're not getting the full 10% from everybody on that roster.

A (24:37)

Right? Yep. Taylor and Paul McCarty, good examples. I also think about Beyonce as well. When it was time for her deal and she was choosing between Live Nation and Aegis, some of the stuff that they were throwing at her was, yeah, just sweetheart deals that you're not going to get from every artist at that level. And at least from what I've read, I believe, because Taylor's with aeg. But Beyonce's deal, I believe is the biggest that Live Nation has ever done. I mean that has been publicly shared, but at least from like what I could gather from, you know, tidbits of when that deal was shared, what was shared publicly. And even on the Jay Z side of things, he has a joint venture with Live Nation and that is part of his agreement there that he has to run this company. So yeah, when you're an artist at that level, sure, you could make a case that, okay, Taylor Swift individually may be bigger than any individual movie star, but as a collective. Yeah, it's, it's still probably split there.

B (25:28)

You were mentioning earlier, uta, that's another interesting company. I think it's grown an awful lot for many years, like CAA and William Morris were the Titans and then UTA, there was like a notorious poaching of agents. UTA, you know, hired a bunch of CAA's agents and then they got sued over it and it was like the midnight raid in Hollywood. They grew pretty fast too. And I think they were, they sort of settled into a third place, but they were a contender. And then I think Casey Wasserman, he deserves a lot of credit for building that company and doing it. I would say Quite smart over 20 plus years, you know, starting with sports and then the marketing stuff and then music and Brillstein, which is another like Hollywood actor type talent agency. So he was able to over a pretty long stretch of time. But I would say it really picked up steam in the last, I don't know, five years or so. He became a real contender too. And I think there was a respect for him in Hollywood that he was able to do that. What will he do next? He's going through a terrible moment of bad publicity now, but I think he'll probably land on his feet. He does have a revered name in Hollywood, the Wasserman name is about as famous a name in Hollywood as Clark Gable or Sinatra or something. That's a very important asset that he has. And I think if he, if he handles this well, I'm not sure what he has to do, but if he handles this correctly and if it's viewed as he did what he had to do and landed on his feet, then I think he'll go on to something else. And it'll be interesting to see what he does because I don't think his story is over.

A (27:18)

I don't think so either. Fast forward two and a half years after the LA 2028 Olympics are done, and assuming that that is a success, I do think that there's a chance the narrative around him could be very different than what it may be like right now, the beginning of 26.

B (27:34)

I agree, but I'm glad that you broached the subject of agencies. And it's been a totally fascinating world for years because there's a lot of power there, there's a lot of money, and a lot of it is hidden. Unlike, say, the studios or the big record companies, which are often public or part of public companies, the inner workings of those agencies is sort of hidden and they're reported on by the trade. But it's all unsourced, anonymous gossip. It's usually sources say somebody's cooking up a big deal or somebody might be leaving or somebody's being poached. But there's just not as much sunlight on the way these businesses operate and who the people are that run them as there are at the studios and a lot of the other more ownership kind of businesses.

A (28:30)

It was fun to unpack it a bit. I'm sure that there'll be more to follow with this story moving forward. But, Ben, before we let you go, if you had to make one prediction, who owns the team?

B (28:42)

A year from now, I think it'll be a. A private equity company that has a totally bland name. That's like the Apple Tree Partner Equity Institute or something or other. Right. It'll be the kind of name that like average people have never heard of. But if you Google, you see, wow, $3 trillion. And they own the shirt I'm wearing and they own my, you know, my house. But I actually think a more interesting question is what does that random private equity company do with it? Do they hold it? Do they take it public? Do they merge it with somebody else? That's, I think that's the. I think to me that's the more intriguing question of what becomes of it.

A (29:29)

My guess is Goldman. But we'll see. We'll definitely see what Goldman or whoever does with it. We'll definitely have to track and see. But Ben, I appreciate you coming on. This was fun.

B (29:40)

Thanks for having me.

A (29:44)

And that is a wrap for our episode on the agency business. Thanks again to Ben Cesario from the New York Times for joining us. Thank you to our audio and video producers G and Eric and Roana on our team for everything that you do to help make trapital possible. And thank you for listening. If there's one person you know that would really enjoy trapital and get a lot out of this episode on agencies or any of the topics that we cover, send them a link to the show. Word of mouth is still the best way to grow. And if you're not already subscribed, please subscribe to podcast on your podcast player of choice. Whether It's Spotify, Apple, YouTube, wherever you listen to shows Trapital is there and if you have a few moments, leave a comment, leave a review. Like the show that helps the algorithm do its thing and helps trapital reach the right people. Thanks again. Talk to you next time.