It takes more than talent to make it in this business.
Creative Artists Agency, one of Hollywood’s top talent agencies, may have to hand over majority control to outside investors to help finance a bid for IMG Worldwide, the sports and modeling powerhouse, The Post has learned.
CAA, along with private-equity backer Texas Pacific Group, is considered the front-runner for Forstmann Little-owned IMG, set to fetch around $2 billion.
While an IMG win would create an unparalleled entertainment behemoth — putting A-list actors like George Clooney under the same roof as supermodels Gisele Bundchen and Kate Upton — it could also put the private-equity guys in charge of the talent agents.
TPG has signaled to CAA’s management team, led by Richard Lovett, that it will need to bring in other buyout bigwigs to fund the potentially game-changing deal, a move that would dilute CAA’s control over the merged entity, sources said.
“The dilution of control is a very big issue for them [CAA],” said one source.
CAA declined to comment.
Another big question confronting Lovett and his agency partners, including Bryan Lourd and Kevin Huvane, is whether Lovett would run the merged business.
While CAA has already built a sports representation business from scratch, Lovett’s expertise is in talent relations and keeping actors, directors, writers and producers happy.
The owners may decide that a more seasoned corporate executive is required to run the show, which would include IMG’s collegiate sports business and a year-round sports training academy, according to sources.
“As the price goes up, what they may need is someone who is focused on running more than the talent business,” said a person familiar with discussions.
Sources peg IMG’s annual earnings before interest, taxes, depreciation and amortization at just under $200 million. IMG College, which represents sports rights for around 100 universities, accounts for roughly 45 percent of total business, sources said.
TPG already owns a 35 percent stake in CAA, making it the single largest owner of the firm that represents some of the biggest names in show business, including Steven Spielberg, Robert Downey Jr. and Sandra Bullock. The transaction made fresh capital available to CAA to expand beyond the confines of Hollywood, particularly in sports and overseas operations.
TPG has drafted Tony Vinciquerra, former chairman and CEO of Fox Networks Group, as a senior adviser to assist in its bid. CAA and TPG also are working with banker Aryeh Bourkoff’s LionTree on the deal structure.
CAA is among at least 10 bidders looking at the books for IMG, which has roughly three times the assets of IMG, sources said. It’s also competing against Ari Emanuel’s William Morris Endeavor, which is backed by buyout firm Silver Lake Partners.
Others in the mix include the Chernin Group, run by veteran entertainment exec Peter Chernin, who has partnered with CVC Capital. Buyout firms KKR, Bain Capital, Carlyle Group and Rizvi Traverse Management also are in the hunt.