The Casey Wasserman Scandal, and Who Wants to Buy His Agency

0:05Matt Belloni:This episode of The Town is presented by the Walt Disney Animation Studios Zootopia 2. Now nominated for the Academy Award for Best Animated Feature. The Hollywood Reporter hails Zootopia 2 knocks it out of the park with this dazzling visuals, sophisticated humor, and genuine emotion. For your consideration for Best Animated Feature. It is Tuesday, February 17th. A pretty seismic event happened last week in the talent representation business. Casey Wasserman, the owner of the Wasserman Agency, he announced he's putting the company up for sale. If you haven't been following this saga, the move came after a couple weeks of scandal, thanks to the latest Jeffrey Epstein email dump.

0:44Matt Belloni:It was revealed there that Wasserman exchanged some sexually charged emails with Ghislaine Maxwell, the convicted Epstein accomplice. The messages were from back in 2003, well before Epstein or Maxwell were known to have preyed on young girls. But Wasserman was married at the time, and he also went on the Epstein plane on a humanitarian trip with the Clinton Foundation. And he had previously been the subject of a Daily Mail expose that called him a serial cheater, including with women at his own company. Wasserman is also the chair of the upcoming LA Olympics, but the board of LA-28, which includes a bunch of his longtime allies, they backed him with a statement saying they investigated his behavior and it didn't rise to the level of asking him to step down.

1:23Matt Belloni:But it did rise to the level of a number of Wasserman music clients leave it, including Chapel Roan and a number of others putting quite pressure on Casey to step away from Wasserman, which is one of the largest sports and music agencies in town. They have everyone from Coldplay and Phish for touring to NFL stars, NBA, golf, a couple Dodgers, and a big brand business. They also own the Brillstein Management Firm, which has Brad Pitt and Emma Stone and Bill Maher, among many, many others. Still, given all that, it was a little surprising to see Wasserman say he was going to sell the entire company, not just the music group.

1:57Matt Belloni:That's now set off a feeding frenzy among potential buyers. That's what we're going to talk about today with Lucas Shaw from Bloomberg. We'll do a little update on the Warner sale too, but mostly today it's the Casey Wasserman implosion and who's going to walk away with a billion dollar talent firm. From the Ringer and Puck, I'm Matt Bellany and this is The Town.

2:18Matt Belloni:okay we are here with lucas shaw from bloomberg welcome back lucas it was nice to see you last friday at afi for one of our live shows happy tuesday yeah tom rothman came out oh you're spoiling the guest sorry i guess i put it on social media yes tom rothman the chairman of the sony film studio is on the show uh later this week we will post the episode but he was great Students were great. I'd actually never been to AFI, so it was a nice little event for us. We're doing two more schools, Chapman and USC, and then maybe more after that. But we're not talking about that today. Today, we are talking about the Casey Wasserman scandal slash sale of the Wasserman agency.

3:01Matt Belloni:We're going to do this in three parts. First, why did this happen? Second, how might this sale play out? And third, why does this matter? Why is this company important in the grand scheme? of entertainment. So first and foremost, why did this happen? These were 22-year-old emails that he sent to Ghislaine Maxwell, who turned out to be an awful person, convicted accomplice to a convicted pedophile, not current and not criminal. So why was he forced to sell his company? Any association with those emails right now is pretty toxic for anyone. And I think in the specific case of Casey, because to your point, there has been no evidence of him actually having a direct relationship with Epstein.

3:47We had a compound effect. We're less than two years removed from a report that talked about him being a serial philanderer, having an affair.

3:56Matt Belloni:Daily Mail report. Let's be clear about that. It was Daily Mail. But I got to get this part out because this, I think, is key. Him having an affair with at least one of his employees. Yes. A subordinate at his company. His name is on the door. His grandfather's name is legendary. He has positioned himself over his career as sort of this face of LA, this champion of Los Angeles. And I think one of the things that was so surprising about the report a couple of years ago, and then this, is like, I think to most people, he seemed like, you know, a good guy, right? He had a marriage to the daughter of one of LA's most famous lawyers.

4:37And they seemed sort of like a golden couple of Los Angeles. And it was one of those like, oh, what's really happening behind the scenes is not the same as what you see in public. I have to say, and this is the part of your newsletter that bothered me a little bit, is I feel like there's been this reckoning. The Epstein Files have made a lot of people, in particular women, be like, see, it's a little bit of a Me Too 2.0. where there's this cabal of men taking advantage of women and they need to go. And yes, one of the things I've heard in response a lot on Casey is like, well, all these powerful men have unhappy marriages or cheat and blah, blah, blah.

5:15Matt Belloni:Well, the music business in particular is rife with bad behavior, including agents at the Wasserman agency. Right. I take that and it doesn't really exfiltrate or justify anyone else's behavior, right? Saying they're all bad doesn't mean, well, so what? They're all bad. No, I get that. I get that. What I was mostly carping on, and I wrote about this in my newsletter, is what is in the record? What is in the evidence that we have seen? You can talk about the rumors around town. You can talk about what people say privately. But in the record, we have seen emails to Ghislaine Maxwell. We have seen a humanitarian trip with Bill Clinton in 2002 on Epstein's plane.

5:53Matt Belloni:And we have seen this Daily Mail story that was not followed up by any other outlets. That's all I'm saying. not justifying the behavior at all. You are raising the concern that some did in the wake of Me Too, which is that there was an overcorrection and there were men who were accused of doing bad things or lost opportunities when their sins were relatively minor compared to the kind of the true monsters, the Harvey Weinsteins to Bill Cosby. Maybe, maybe. But even just in this context, because we had the LA-28 board actually look at this and hire a law firm, O'Melveny and Myers, to put their name on an investigation.

6:28Matt Belloni:Now, we both know that internal investigations often are not dispositive. And we can cite five examples of instances during the Me Too era when companies had reviewed behavior and then all of a sudden more stuff comes out. Not saying it's dispositive, but there is a law firm in L.A., a very powerful firm that put their name on this, and the board voted to back him. I would argue the kind of damage to his reputation, whether you fully believe in the allegations or not is more of a problem for the Olympics than for his private company. Right. Because he's a statesman when it comes to the Olympics.

7:03He's not even an agent. Private company, it's like, okay, he owns it. He can control it. And if people can either stay or not, right?

7:09Matt Belloni:No, but you're missing the key element here. And I did write about this. It's the talent business. If you choose to get into the talent business, which Casey Wasserman did, you are subject to the whims of the artists you represent. And if you do things that artists will not like, you are absolutely exposed to them leaving, to them creating momentum that is going to ultimately cause you to have to sell the company. And that is what happened here. These artists did not like the behavior, whether they were fanned by rivals, whether their own agents were pressing them to post stuff, to try to get a better deal elsewhere.

7:44Matt Belloni:We don't know. But the artists ultimately are the kings in the talent business. And that's what happened here. and you got to accept it. He was a new player in music, right? He had just bought a music booking agency in the last couple of years. 2021, he bought it from Paradigm. Right, and had just added a couple of high-profile agents over the last years from WME. So it was something that he was new in, also a relatively small part of his business. He probably may regret doing that at this point because you did not see the same level of outrage from most of the athletes on his roster or from the Hollywood actors.

8:22Matt Belloni:He hosted his Super Bowl party. He was doing NBA All-Star weekend events. In the sports world, this is not as big of a deal. Right. And I think even in certain corners of the music business, it wasn't as big a deal. But to your point, it becomes a growing problem and distraction because you, like I, had heard the names of the other artists who were going to join Chapel Rhone and others or were at least threatening to do so, right? And so if you had Coldplay or Ed Sheeran say, actually, we don't want to do this anymore, that then becomes a real problem because those are two of the biggest artists in the world.

8:56Matt Belloni:Absolutely. And at that point, you're looking at the you're playing this out if you're him and his crisis PR people and you're saying, OK, I sell now and I can stop the bleeding and this all goes away for now. I can wait a couple of weeks and maybe the asset depreciates because our biggest acts have left and then I'm forced to sell. I have a question on this because I know that we want to get to the actual sale. I had heard, and I think I put in my newsletter that he has actually explored selling this thing a couple times in the last few years. Do you think there's any part of him that actually is like, obviously not the circumstance in which he'd want to, but is actually kind of happy that he...

9:36Matt Belloni:As of earlier this week, he was putting his head down and as of last week, I guess, saying he could get through this. And my understanding is that he did not want to sell, not on this in this situation, not on these terms. But that gets us to the question of the sale process. My sources indicate that he's interviewing banks this week. There has already been teens, maybe up to 20 potential bidders that have expressed interest in this asset. This is a pretty major asset coming up for sale. How do we think this is going to play out? Who are the potential bidders here? And does this company stay together in a sale?

10:18Matt Belloni:Or does it get portioned up and sold off in pieces? Well, I think that's the big question, right? Prior to him buying the Paradigm Music Booking Agency and Brillstein, which is a Hollywood management company, his business basically had two divisions. There was the sports talent representation. So there are agents to hundreds of athletes. And then there's a branding business that sort of helps on marketing and branding with a bunch of clients. And that's a big aspect of the business. I'm told up to about 50 % of the business. Yes, it's a big, big part of the business. Those two businesses would fit naturally inside another sports agency, right?

10:55And there are no shortage of those that could try to buy it. You could also see those two businesses being split and having a sports agency or a company looking to buy sports get one and the branding business gets sold to an ad agency or a consultancy. You throw in the Hollywood and the music and you both bring in more other potential buyers, but also in some ways would increase the possibility of it being split up, right? Because the number of companies that are in all of those businesses, it's a relatively short list. It's basically your CAA or UTA, your WME, and maybe a couple more.

11:28Matt Belloni:And those talent agencies would have to sell off the management company, Brillstein, because they're not allowed to produce and those companies produce. And if CAA had its deal for ICM, the subject of relatively intense regulatory scrutiny, and they are already the biggest sports agency, if they went after Wasserman, I think that would be problematic from a regulatory perspective for them. WME, because of what's happened with Endeavor, is sort of a weird buyer just because they've split up some of the parts of the business. Yeah, but they have Silver Lake behind them. They do. And then you have the wild card of like, does one of these newer, like one of these management roll ups want to go in and try to buy it as their big sports play, right?

12:07The initial group or whatever the hell that TPG thing is called.

12:11Matt Belloni:Well, but you're thinking strategic buyers here. I mean, I think that you can go private equity or. Yeah. I mean, Excel, the sports agency, was just bought by Goldman Sachs. And any number of PE firms would be interested in this asset. I mean, it's really one of the last big platforms, big, already rolled up company. I mean, he put together like 50, 60 different companies into this one entity. And you could pay a couple billion dollars and all of a sudden be a player in sports, music and talent. You get immediate exposure to sports, which I think if you're private equity would be the primary interest.

12:49Matt Belloni:I mean, they're all looking at buying 10 % of, you know, football teams or whatever. Here, you could become a player in sports instantly and not have to deal with the leagues. I mean, Wasserman is a, you know, a top, probably a top three sports agency and a top four music agency. So and then, you know, Brillstein is a is a really solid management company. So it is an easy entree into the entertainment world for anyone who wants to be there. The branding businesses, I always find a little squishy. Like I know it does really well for them, but that is such a weird business. They make a lot of money on it though.

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14:10Matt Belloni:The most intriguing aspect here to me is we could see a Ari Emanuel versus Patrick Whitesill bidding process. If Ari is aligned with WME, which he formerly ran and is now executive chairman of, and they go after this with Silverlake's money, potentially Patrick Whitesill, who left, was the co-founder of WME. But also has Silverlake's money. And also has Silverlake's money. And he'd probably have to raise more money. Because he's been out there trying to buy stuff in the kind of smaller stuff and hasn't been able to. Well, no, he's bought a couple of things, but he had, you know,$250 million to play with, but the ability to go up if he wanted to.

14:51Whereas WME group is much larger and also Ari's separate Mari thing has a couple of billion dollars. Right. This would seem to fit more in the WME lane than the Mari lane. Yeah. But you never know with that guy.

15:05Matt Belloni:Exactly. And I guess TKO would be out because they are in these sports ownership. They are not in the representation business. Do you think that there's a world in which UTA, given some of its recent problems and turnover, would see this as a way to get into the big leagues with TWA and WME again? Sure, why not? They'd have to convince their private equity owners. And I had heard that the UTA backer has actually been looking to exit. So that might be problematic. and going from potentially exiting to potentially tripling down on this big company, but maybe they'd be interested in a portion of it.

15:40Matt Belloni:The Ari versus Patrick thing is interesting because obviously Patrick and Ari were once partners, are now kind of not on the best terms. And Ari and Casey Wasserman are like sworn enemies, do not like each other, to the point where I would be so shocked if Casey authorized a sale to a company that was even affiliated with Ari. He's been telling people that he thinks that Ari has been behind a lot of what's happened to him. Right. And so why would he ever let his company go to an Ari-affiliated company? But you know what? Maybe not up to him. Providence, the financial backer, has about 60 % ownership of this company, I am told.

16:24Matt Belloni:Now, some say it's a little higher. I do not know the exact amount that Casey owns. I have been told it's in the 25 % range. That is not confirmed. But they both have to agree on a sale. This actually works within Providence's timeline to sell because they've been in it for about five years, I think. Maybe they're the ones that have been fanning the flames. I doubt that. I'm not getting into that. But do you know the source of Ari's animosity towards Casey or their mutual dislike? Like, all I know is that it goes back to rivalry from the WME days when Ari was day to day. What I've been told was that 20 plus years ago, back when Casey was was owning a bunch of Arena Football League teams, actually, then Endeavor went to went really deep into talks with Casey, where Casey was going to invest in Casey pulled out at the very last minute.

17:20Matt Belloni:I mean, also, they're just oil and water. Like, Ari is Mr. Self-Made Man, Mr. Up From Nothing. He has a chip on his shoulder about anyone who he perceives to have inherited anything. That's been his beef with CAA. Casey basically used his inheritance to build his business. Now he worked really fucking hard, but he's still Golden Spoon. Yeah, this is why Ari hates CAA so much, for many reasons. But he thinks those guys were handed the agency from Ovitz and those guys and then built what they built. Ari's like, oh, I built my whole thing. Whatever. It would just surprise me if Casey authorized a sale to any company that had anything to do with ART.

18:00Do you think it's more likely to go strategic or financial?

18:02Matt Belloni:Financial. I just think that with what we saw with Excel, which is the best comp here, I guess, where Goldman just wasn't even considered a bidder. And all of a sudden, they're coming out of nowhere. The question is, how much does it go for? Yeah. Because I've seen estimates anywhere from a billion to like three or four billion. Three or four seems rich. It does. In fairness, I don't know the financials. Yeah, we don't. I mean, the reporting has been that they're at about 100 million a year. In EBITDA? Yeah. And a billion. So you're telling me it's going to get a 30 multiple? That I don't see.

18:37Matt Belloni:I'm not telling you that. I'm just saying what the rumors are out there. 30 to 40 multiple would be pretty rich. But the Excel multiple was like 18, 19. Sure. So that would put this in the one five to two range. Sure. And it just seems like a private equity firm would have all the incentive to get into this space. We know they're all circling. We know they're looking. There already is a private equity firm in it. Yeah, exactly. But just trading from one to another. All right. So the third question here is why does this matter? What does this say about where we are in the representation business?

19:13Matt Belloni:Because what I thought... Well, do you think it says something about where we are in the representation business? Well, the sale process and how this could reshape the representation business. So we're talking about the sale process more so than the scandal drama. Yes. And where this asset ends up. Because it could transform one of these players. Or it could transform someone who wants to get into this business. If we have a strategic deal, it is potentially transformative because it either makes an existing power much, much stronger, or it can level up a second tier, third tier player to the big leagues.

19:49Matt Belloni:It's like what happened with IMG. When WME bought IMG back in the day after Teddy Forsman died. Well, that was also just a sign of Ari and Patrick's sort of boundless ambition. Yes. And by the way, Teddy Forsman and Ari did not get along either. So maybe there is a path. Money talks. Well, I think that was another issue. I think Casey really wanted IMG and Ari and Patrick ended up getting it. Yeah, like Casey developed a relationship with one of the people anyways. And, but if it goes financial, I guess I see it as sort of less transformative because it already is kind of financial. But Wasserman has been building out, right?

20:25They bought Brillstein, they bought Paradigm. So if they have a buyer who wants to keep funding that.

20:30Matt Belloni:I'm thinking of a buyer like the Arnaud family, the caring family. So we're going to have a French billionaire rivalry in entertainment. Exactly. Like they saw what the Pinot family has done with CAA and bought majority stake in CAA. Maybe there will be a French luxury goods rivalry in Hollywood-oriented talent. The other wrinkle to this, I guess, is who is going to run it? And do they wait until after they have a buyer to really put someone in charge? They obviously have a temporary steward. Good question. who would want to buy that? I mean, there's plenty of potentials. Could be your next career.

21:06Matt Belloni:I know. Maybe Craig and I will go over and run that. I know we're focused on the sale, but I'm just curious. Karen Bass came out kind of last night. Oh, the mayor of LA. Yes, the mayor of LA who's polling at, what, 20-something percent? And who's been totally silent on this issue until now. Eight days ago, she was totally okay with whatever the board did. And now when she gets a challenger in the mayor's race from the left, she all of a sudden decides that Casey has to go. Right. Do you think that we are done with the Olympic part of this story? Good question. I actually don't think so. I think that if there is follow-up media coverage, I know the journal, our friend Jessica Tunkle is working on a story about Casey.