The Department of Justice is probing a major Hollywood deal that’s poised to disrupt the talent agency ecosystem and entertainment industry, according to a report.
CAA, the agency that reps Brad Pitt, George Clooney and Scarlett Johansson, revealed in September that it would acquire ICM, home of Shonda Rhimes, Alec Baldwin and Uma Thurman, noting that the deal would close by the end of 2021.
But a new inquiry by the DOJ over how the merger between two major agencies would impact the Hollywood landscape, has delayed the deal, which is now expected to close in the second quarter of this year, anonymous sources told THR late Wednesday.
CAA, ICM and the DOJ did not immediately respond to requests for comment.
If a deal between CAA and ICM closes, the talent agency landscape would have three major players in Endeavor-owned WME, CAA and UTA, along with smaller competitors like APA, Gersh and Paradigm.
The DOJ’s antitrust division, led by Assistant Attorney General Jonathan Kanter, has already interviewed top executives at CAA and ICM as well as some outsiders like APA CEO Jim Gosnell, a source told THR.
The probe may have been launched after Hollywood unions such as the Writers Guild of America and SAG-AFTRA voiced their concerns, the source said.
After the CAA-ICM deal was initially announced, SAG-AFTRA national executive director Duncan Crabtree-Ireland said in a statement that the union would “carefully scrutinize this combination of two storied talent agencies to ensure that performers will benefit from, and are not disadvantaged by, the deal.”
When THR reached out to CAA in September, co-chairman Bryan Lourd said he was “very confident” the deal would go through. But the DOJ antitrust division and the Federal Trade Commission has been critical of the high volume of M&A activity under President Biden.
The DOJ sued to block ViacomCBS’ sale of book publisher Simon & Schuster to Penguin Random House, citing concerns that the deal would give “outsized influence over who and what is published, and how much authors are paid for their work.”
There is also a slew of other deals that may pique concerns. They include Discovery’s deal to merge with WarnerMedia, Amazon’s acquisition of Hollywood studio MGM, and the merger of Spanish-language media giants Univision and Televisa.