Thursday, May 21, 2020
Paradigm CEO Sam Gores denied a report on Wednesday that he was poised to sell his agency to sports and media mogul Casey Wasserman, according to a memo obtained by TheWrap.
“There is no agreement to sell Paradigm, nor is any sale imminent,” Gores wrote in an internal memo to his staff, citing media reports that had rumors coursing through the agency.
But an individual with knowledge of the matter told TheWrap that amid the ongoing troubles at Paradigm because of the COVID-19 shutdown, Wasserman was in talks to buy the agency.
Wasserman, chairman and CEO of Wasserman Media Group, had been approached by Tom Gores, CEO of Platinum Equity and brother of Sam Gores, the founder and CEO of Paradigm, according to the individual. He is the grandson of the legendary Hollywood mogul Lew Wasserman, whose original elegant MCA offices in Beverly Hills were until 2018 occupied by Paradigm.
The news of a pending sale was first reported by Hits Daily Double.
Paradigm has been hit hard by the coronavirus shutdown, but such a deal may be a hard sell for the company, which gets a full two thirds of its revenue from music. But music is a seasonal business, with majority of new releases and especially tours centered on warmer months of the year. Consequently, the agency normally borrows money during the winter months, and repays the loans with profits from summer tours and releases.
That rhythm was however catastrophically disrupted by the coronavirus lockdowns, which brought a halt to live music events across the world. This included some of Paradigm’s biggest clients, like Billie Eilish and Kenny Chesney.
In March, Paradigm CEO Sam Gores sparked what insiders described as a ‘f—ing war zone’ within the company when he attempted to stem those losses by cutting music agent salaries by 50%, as TheWrap exclusively reported at the time. Agents banded together and threatened to leave, while others publicly complained that they felt Gores used Paradigm earnings to for his lavish personal lifestyle, insiders told TheWrap in April.
As a result, Gores backed down and reinstated the music agents’ salaries. “He ended up not cutting people because of negative press on the firings,” an insider told TheWrap at the time. “They effectively held him hostage.”
Gores instead opted for more widely applied pay cuts throughout the company, beginning with his own, which was cut in full.
Here is Gores’ full staff memo:
By now most of you have seen stories in the media that Casey Wasserman is in talks to purchase Paradigm, and that the deal is nearly done. Let me be clear: these stories are not accurate. There is no agreement to sell Paradigm, nor is any sale imminent.
The agents at Paradigm and the talent they represent have built this agency into an industry leader. Despite the difficult environment that nearly every company in the entertainment industry has faced and is facing due to the coronavirus, we have made good progress in stabilizing and strengthening our agency. This progress is in no small part due to the hard work and dedication of our team. I want you to know how much I appreciate your efforts.
We are always looking for ways to further build and grow our company. This is nothing new. What is new, in my view, is that this environment has created unique opportunities, and we are – as you might expect – looking at a number of them.
Don’t let rumors or speculative reporting upset or distract you. We are the best at what we do because we remain focused on our clients. And this is how we will continue to thrive and succeed.
If there is something to report, be assured you will hear it from us. In the meantime, stay safe, healthy, and focused.
Trey Williams contributed to this article.
Source: the wrap feed