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DOMINOES Falling Across
Agency Sector
LEFT- RIGHT: SAM GORES, JEREMY ZIMMER, ARI EMANUEL
T remors of instability and uncertainty have shaken the agency business to its core, as the coronavirus pan-
demic obliterated live music for the foreseeable future. Paradigm was the first to unravel, as an abrupt
round of firings—said to have affected 250 of the
company’s 750 staffers—with 50% pay cuts for every- one else, was announced via memo on Friday, 3/21.
We’re told that while chief exec Sam Gores and his management team didn’t directly invoke the force majeure clause in employee contracts to justify slashing salaries, the memo danced around the implications of that clause, which entitles the company to make the 50% cuts—but also enables the agents to become free agents after 90 days. Those close to the situation say the line in the sand, as far as the firings went, was that those spared are all significant potential commission-earners. Paradigm’s artist roster includes Ed Sheeran, Coldplay, Billie Eilish and many more.
With music making up about 80% of the agency’s business, accord- ing to insiders, Paradigm could be facing a perfect storm: overleveraged and with enormous debt to service from its various acquisitions, including Coda, Windish, X-Ray and Little Big Man—anticipating no concert business whatsoever for at least several months. There’s talk that the agency could be confronting a financial crisis within 90 days.
What happens to the company’s top agents and their non-compete clauses? Will we see a new agency rise from the ashes, or old ones
get rebooted? The fate of Tom Windish, Marty Diamond and Steve Strange is the focus of myriad questions.
Another domino fell on 3/22, as the top three execs at UTA said
they would forgo their pay for the rest of the year as the talent agency began implementing companywide pay cuts. UTA CEO Jeremy Zimmer and Co-Presidents David Kramer and Jay Sures said they hoped to avoid layoffs as the coronavirus continues to spread across the U.S.
“Like companies across the industry and our country, UTA is tak- ing some immediate and painful steps to ensure we get through the current public health and economic crisis as strong as possible,” the agency said in a statement. “In addition to aggressive cost-cutting measures, this includes asking our colleagues at every level to take pay reductions, structured so our most senior colleagues make the largest financial sacrifice.
“While we do not know what the future holds, we are committed to being candid and transparent about where things stand as we navigate these uncharted waters together.”
The following day, Endeavor, mirroring its two rivals, laid off approximately 250 employees across its businesses. CEO Ari Emanuel wrote in a 3/25 memo that pay cuts were being evaluated for all remaining staff.
“We will be implementing a number of additional measures begin- ning this week and through April that will affect compensation and some jobs across the company,” Emanuel wrote. “As part of this, [Co-CEO Patrick Whitesell] and I will not be taking a salary for the remainder of 2020.”
Insiders say Board Chairman Egon Durban and President Mark Shapiro are looking at a possible overhaul of top management.
With three of the top agencies in tatters, the entire music industry is bracing for further tumult. n
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