For Hollywood’s biggest talent agencies, working from home has been the least of tough adjustments in the stunning fallout from the coronavirus pandemic. Revenue streams at the companies have suddenly dried up as show business has shut down.
From major players CAA, WME, UTA, ICM Partners and Paradigm, to boutique dealmakers like Management 360, economic hardship, staff cuts, and a complete shock to corporate culture have come almost immediately as a nation becomes homebound in the effort to slow the spread of the COVID-19 virus.
The bad news began on Friday when roughly 100 staffers were laid off at Paradigm, with more expected in the coming days at the agency (and across town), according to insiders. The company reps acts like Coldplay, Ed Sheeran and Jared Leto’s 30 Seconds to Mars. A spokesperson for Paradigm did not immediately respond to Variety‘s request for comment.
At ICM, “floating assistants,” support staff not assigned to a specific agent or department, were laid off on Wednesday, numerous sources said. The pool of assistants were paid a month’s salary and medical benefits were extended through May, added an ICM insider. When the agency is back up and running in the Century City headquarters, the cut staff will be invited to reapply for the lost positions, the source said. A spokesman for ICM had no comment on the matter.
In Beverly Hills, the empty offices of William Morris Endeavor are making remote moves to save cash. Expense reimbursements have been temporarily frozen, three individuals familiar with the matter said, and future expenses are prohibited until further notice. The latter is no great sacrifice, added one person familiar with WME, as martini lunches and jaunts on private jets aren’t possible with California’s current stay-at-home order.
The fiscal conservatism comes at a particularly tense financial time for WME. Senior partners at the agency were informed Friday that an expected stock reimbursement, scheduled for April 5, would be delayed indefinitely. The cash drop was said by insiders to be worth up to 20% of the equity held by senior employees in WME’s parent company Endeavor, which scrapped a planned IPO last fall. Turmoil over the buyout predated the coronavirus outbreak by months, and even stirred conversations about top agents potentially defecting for competitors. WME declined to comment on the matter.
Endeavor, which also counts portfolio holdings in UFC and IMG, is set to be rocked by the hit to its live-event-focused businesses in the time of the coronavirus. This includes sporting events, global fashion weeks, food and wine festivals and more that have been canceled or postponed. The revenue loss could create issues for Endeavor in servicing its short- and long-term debt commitments.
Usually dripping with schadenfreude, a top executive at a WME rival somberly noted, “What isn’t good for WME isn’t good for all of us.”
While staff cuts have not yet hit CAA, WME or UTA, one top film executive said the Paradigm news gives the agencies “cloud cover” to take a hard look at financials, as the industry attempts to soldier on in an unprecedented crisis.
At Management 360, four weekly staff meetings are held via video conference and clients are submitted for hopeful future film and TV projects via self-tape. At CAA, an app called WebEx routes calls, instead of the agency mainstay of front desk reception, and connects agents for virtual meetings.
Practical measures are also being taken across the board. One Beverly Hills-located shop has cut the air conditioning to the building and frozen the company’s cable subscription. Another agent, speaking on the condition of anonymity, found one silver-lining in the grim outlook.
“The mailroom is still open,” said the agent of the storied departments, where moguls like David Geffen, Ron Meyer and Barry Diller got their starts (at William Morris). “That will never close. That’s where the checks come, and where the checks go out.”
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