One Take On the CAA vs. UTA Situation

• This week's newsletter is devoted to the shocking departure of ten agents, essentially en masse, from CAA, all of them going to UTA. 

 

• Here's what you need to know:
  • On March 31, UTA announced that agents Jason Heyman, Martin Lesak, Greg Cavic, Gregory McKnight and Nick Nuciforo had joined the agency. Deadline broke the story. As a group, these five agents were the heart and soul of CAA's comedy business. The talent in play as a result of this move is staggering, and includes Chris Pratt, Will Ferrell, Seth Meyers, Danny McBride, Jason Bateman, Jason Sudeikis and Melissa McCarthy. All five agents were announced as new UTA partners (this is a return for Heyman and Lesak, who were UTA partners a decade ago).
  • Later that day, it was reported that both Chris Pratt and Will Ferrell would sign with UTA. But the excitement didn't stop there; by the end of the day, three more CAA agents had announced their resignation and intention to go to UTA. These were John Sacks, Susie Fox and Joanna Scott. This meant an even worse hit to CAA's comedy roster, with artists like Broad City creators Ilana Glazer and Abbi Jacobson, as well as stand-ups Jerrod Carmichael and Natasha Leggero, now in play.
  • On April 1 (wouldn't it have been nice for CAA if it was all just a prank?) agents Mackenzie Condon and Chelsea McKinnies left CAA for UTA, bringing the total defections to ten. Condon and McKinnies, like the others before them, work almost exclusively with comic talent. While there are dozens of top-flight actors, writers, directors and comedians up for grabs, at least one more former CAA client confirmed his commitment to UTA on Wednesday: The Office and Hangover star Ed Helms.
  • On April 2, the first lawsuit related to the defection was filed in L.A. Superior Court. CAA filed suit against Cavic and McKnight specifically, as well as against UTA, alleging, among other things, that the agents and their new agency were part of a conspiracy to "intentionally and deliberately interfere with CAA's existing and prospective economic relationships with its clients." Cavic and McKnight were not under formal contract with CAA, which may be what exposed them to this type of legal action; the agents under contract may have clauses dictating that such disputes be handled in arbitration. The entirety of the claim, filed by Proskauer Rose LLP, representing CAA, can be read on Deadline.com.

• Many questions remain. Among them:
  • What further legal action will CAA pursue, and how long will it be before the matter is resolved? With ten agents and a rival agency in its sights, CAA's legal strategy is likely to be complex. The dust may not settle any time soon.
  • What about commissions? Let's say, hypothetically, that cooler heads prevail here (hey, anything's possible). What would an amicable settlement look like? Generally speaking when an agent leaves one company for another one, a split is made between the two agencies regarding commissions on deals the agent has brokered. But with the dozens of high profile talents in play, and the amount of money they represent, could one deal possibly suit all parties? And how will they handle commissions for lucrative franchises and ongoing TV series that clients may be a part of? In some sense, the pressure will be on UTA to package new deals for these stars that are free and clear of any encumbrances.
  • Will the talent actually follow? The feeling now is that most of the key talent will sign with UTA, but this is a prime moment for a third party to swoop in and sign someone in the midst of all the chaos.
  • What will the fallout be at CAA? And at UTA? Obviously, CAA will need to do some damage control, and if there's something larger going on there that prompted these agents to leave, they will need to work very hard to stop the bleeding. Things will not be all roses at UTA, either. Doubtless there will be established UTA agents who will perceive their ten new colleagues as either a threat or an insult, and will start looking for positions elsewhere. The same goes for UTA clients who may now feel like there won't be time for them after this influx of movie stars.
  • What bridges have been burned? If the legal battle is protracted, how will it affect established packages and working relationships around town? How long will it be before executives know exactly what agent to call for which talent on which project? And will managers be dragged into it as well? Remember, the managers typically have more personal relationships to clients, and work with all agencies, theoretically equally. The question of who knew what when (and sat on it) seems like a legitimate one for CAA to ponder. In short, it's an ugly situation.

This newsletter includes information reported by Deadline Hollywood, The Hollywood Reporter and Variety.