The next time François-Henri Pinault appears in Hollywood, he won’t be seen just as the billionaire husband of movie star Salma Hayek, but as the owner of the talent agency that represents her .
On Thursday, the Frenchman unveiled a deal to acquire a controlling stake in Creative Artists Agency, which counts other A-listers including Brad Pitt and Margot Law, from private equity firm TPG Than (Margot Robbie).
The move into entertainment is a new direction for Pinault and Artemis, who have spent much of the past decade building a $40 billion business through stakes in Gucci owner Kering and auction house Christie’s. Investment portfolio, focused on the luxury sector.
The deal values CAA at more than $7 billion, including debt, and marks the latest investment in California by Artemis, which was embroiled in the 1990s over the fate of a junk bond portfolio it purchased from insurance company Executive Life. A long and fierce legal battle ensued.
Luca Solca, a luxury goods analyst at Bernstein, said: “In my opinion, this is more of a personal investment by the Pinault family than anything related to Kering or the luxury business. Invest.” “Pino’s wife, Salma Hayek, is an A-list movie star and follows what’s going on in Hollywood.”
The idea was echoed by one banker in the industry. “I’m not sure what this has to do with Kering, but it could be useful to control such an influential group of people,” they said, adding that the deal was “more likely to have cross-over implications for his wife”, Rather than facing Kaiyun Group.
People close to Pinault say he has spent the past two years looking for business in the United States or Asia that has nothing to do with the luxury goods cycle and insist Hayek is not involved.
“The deal had nothing to do with pleasing Salma Hayek, it was a business decision,” one source said. “She had no idea he was involved in the deal until he told her . . . She Not even particularly happy about it.”
Negotiations between Artemis, CAA and TPG began in late 2022, with a team from the French group traveling to Los Angeles in April to meet with key staff at the 3,000-employee agency.
Pino was involved throughout the process, especially the initial conversations with three CAA executives and the business review process. However, much of the negotiations were led by Artemis deputy CEO Héloïse Temple-Boyer and CAA super agent Bryan Lourd, according to two people involved in the talks.
Lourdes eventually floated the idea of Artemis buying part of CAA from its private equity owners, who have not been actively seeking to sell the business, and talks heated up this spring.
While the link to the luxury business is not expected to be direct, people close to Artemis believe there is overlap in the expertise required to run an agency and manage a large luxury group.
“We know how to manage complex, demanding, creative talent and make intangibles thrive, but we have not considered synergies or complementarities with Kering or its brands at all,” said one person involved in the talks. .
Artémis was attracted by the opportunity to partner with Singapore’s Temasek, which the French group believes has similar long-term prospects and will remain a minority shareholder in CAA. People close to Artemis said the agency’s low overhead and profit margins of more than 30% were also attractive, as was the diversified nature of the business.
CAA’s high-profile film division accounts for only about 15% to 20% of revenue, with its television unit accounting for about a quarter. Its sports business is the largest segment, accounting for about 30%, and includes not only talent management but also consulting for teams and major sports infrastructure projects such as New York’s Yankee Stadium.
“What reassures (Artémis) is that the agency is very diversified. Everyone is focused on the Hollywood star agency, which does not even account for 20% of the turnover.” A person involved in the negotiations said.
For CAA, “I think what they’re interested in is they don’t want to move from fund to fund anymore…” . So when someone contacts them, they are very responsive and very receptive. ” the person added.
That diversity gives Pinault comfort when making investments, according to people familiar with the matter. But the deal comes amid upheaval in the entertainment industry, with widespread strikes by actors and writers paralyzing production and streaming platforms beginning to limit spending on content.
Longer term, the rise of streaming is fundamentally reshaping the way the industry operates, which has been hit by prolonged closures of production and movie theaters during the pandemic.
CAA was founded in the 1970s by Michael Ovitz and other agents who escaped from the William Morris Agency. It’s home to some of the biggest names in entertainment, including Zendaya, Reese Witherspoon, Lady Gaga, George Clooney and Steven Spielberg. Louder, who was romantically involved with Carrie Fisher, was a big shot in Hollywood, serving as a sounding board not only to actors but to studio heads.
TPG acquired a minority stake in the agency in 2010 and took control four years later, seeking a way to bet on the explosive value of sports and entertainment rights as they believed talent agencies were understood by the wider market More stable business.
Its equity investment was used in part to transform CAA from a law firm model to a model in which most key employees own equity in the business and are incentivized to increase its overall value, and in which top campaigners focus on their Business.
No single client accounts for more than 1% of CAA’s revenue, which, apart from a dip in 2020, has been growing for about three decades, according to people familiar with the matter.
The last time Pino ventured to Los Angeles, it didn’t end well. In the 1990s, Francois-Henri’s father, Francois-Henri, bought a portfolio of junk bonds from Executive Life, a now-defunct California insurance company. Acquired by Credit Lyonnais. Allegations of fraud in the Executive Life deal led to years of legal proceedings in the United States that ended in 2015.
The CAA deal is the second foray into Hollywood by French investors in a year, after Mediawan, founded by French telecoms billionaire Xavier Niel, struck a deal in December to acquire Brad Pitt’s popular production company Plan B Entertainment. . Prior to this, Gallic’s last foray into the U.S. entertainment industry was in 2001, when Vivendi purchased Universal Studios.
With Pinault’s Hollywood bet, there’s a new Frenchman in Hollywood whose star is on the rise.
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