The decision made by François-Henri Pinault about the Creative Artists Agency may muddy the waters regarding celebrity cooperation.
Michael Ovitz famously remarked that “Hollywood is a small, family-oriented place.
In order to defend himself against accusations of conflicts between interests in the early 1990s, the co-founder of the talent association known as Creative Artists Agency (CAA), once named the most powerful man in Hollywood, played on the idea that each and every one knows everyone in the movie industry.
Today, a newcomer arrived into town and immediately attacked the company that Ovitz worked so hard to establish.
A unexpected agreement has been reached by François-Henri Pinault, the French billionaire behind high-end brands like Gucci, Balenciaga, and Saint Laurent, to purchase the majority of CAA, one of the most influential talent agencies in the world.
Through its holding firm Artémis, also owns the controlling interest in the deal, the Pinault family has share of the Kering luxury conglomerate.
Although the financial details of the agreement with Texas-based private equity firm TRG are still not public, it is thought to have been worth billions of dollars and to be the biggest business deal Artémis has ever undertaken. One of the most well-known talent agencies in Hollywood, CAA represents people like Steven Spielberg, Brad Pitt, Margot Robbie, the actress Scarlett Johansson, and – most significantly – Pinault’s wife Salma Hayek.
It also symbolizes a wide range of sports figures, such as Carlo Ancelotti, manager of Real Madrid, and midfielder James Maddison of Tottenham, as well as figures in less well-known industries including podcasting, video gaming, and fashion influence.
The company will now be a part of Artémis’ investment investments, which also includes Château Malbec and Christie’s, two companies that are not part of Kering.
The acquisition of CAA by Pinault represents his most audacious move to date outside of his primary market of luxury. However, experts claim that the agreement illustrates how the boundaries between designer labels and the celebrities who endorse them are getting fuzzier.
David Maag, the former head of Burberry in Europe, claims that this is a “truly fantastic chance for Hollywood ability and luxury to move over.”
Luxury goods businesses and designers have been competing for “brand ambassadors” for years. It “could take this to another level,” according to Maag, if Pinault signs a contract with CAA.
Actors and athletes could contribute to the creation of brand material or collaborate extra directly with fashion companies on their products.
According to Maag, the nexus of the luxury and fashion industries joining the convergence of film, television, music, and athletics in the internet-based media and marketing realm is a logical st
Bryan Lourd, Kevin Huvane, and Richard Lovett, the co-chairmen of CAA, said in a joint statement that Pinault and his family “share our vision for a future of limitless new opportunities,” praising his “global reach and resources across countless areas of our clients’ interests.”
Lourd, who represents George Clooney, will take over as CEO once the deal is finalized. All three members of the group have long-term commitments to the company and will continue to serve as co-chairmen.
In a statement, Pinault stated: “CAA has all the necessary qualities to join the Artémis family, providing greater variety, both in regard to territorial footprint and company operations, to our other assets.”
Although Pinault, whose estimated net worth is $32 billion, hasn’t done much commercial work in Hollywood,
The 61-year-old married Hayek in 2009, and the two are parents to a daughter.
According to Luca Solca, an analyst at Bernstein, “this is more of a personal investment for the Pinault clan than nothing related to Kering or the luxury business.” Salma Hayek is a top-tier movie star who keeps up with Hollywood news.
Pinault’s companies have been expanding into the media. The celebrated director Pedro Almodovar’s first film, which was produced by Saint Laurent, a Kering-owned brand, made its world premiere at the Cannes Film Festival earlier this year.
Anthony Vaccarello, artistic director of the French fashion brand, asserted that the new branch allowed him to “expand the idea I have for St. Laurent through a medium.”
Pinault’s acquisition of CAA may improve things for Kering. It has been losing market share to LVMH for years, which includes Louis Vuitton, Tiffany, Dior, and many other luxury brands.
After experiencing a surge in revenues across all of its brands, LVMH earlier this year was the first European firm to be valued at more than $500bn (£3400bn).
Kering has had trouble keeping up. Gucci, the company’s most popular brand, saw sales increase by just 1% in 2017. A recent activist effort to demand change and spur growth has the corporation at its center.
According to Morgan Stanley analysts, Kering is most likely to “significantly underperform the luxury goods sector” this year.
The CAA deal with Artémis may present a fresh approach.
The instability in Hollywood serves as a backdrop to the takeover. Early this summer, members of the Writer’s Guild of the United States and the actors’ organization SAG-AFTRA both went on strike, causing numerous TV shows and movie productions to be delayed.
Studio and casting agencies are suffering as a result of the labor conflict, which is motivated by worries that AI may replace both authors and actors.
Earlier last summer, Endeavour, a competing agency run by Ari Emanuel, who served as the model for the Entourage character Ari Gold, claimed the strikes would cost them $25 million per month.
Since the spring, the company’s shares have decreased by about 15%. Last month, the CAA was compelled to fire 60 employees.
The timing makes it possible that Artémis merely pounced on a deal. After all, François Pinault, the father of Pinault, amassed the family’s wealth by acquiring failing businesses.
A renowned French journalist referred to him as a “pirate” because of his predilection for troubled assets.
The CAA arrangement leaves Pinault vulnerable to claims of conflict of interest, regardless of the cost and regardless of the motivations.
Controlling the businesses that represent stars and the brands with which they sign endorsement deals does not look good.
However, as Ovitz argued in the beginning of the 1990s in response to criticism for providing advice to clients looking for work in Hollywood as well as a film studio, these kinds of circumstances are not uncommon in Hollywood.
Conflicts of interest were established by this industry, Ovitz, who later led Disney after exiting CAA, claimed to Time magazine in 1993. Everybody transacts commerce with every other person.
Pinault will undoubtedly be betting that his most recent agreement merely means there is more business overall.