CAA partner confirms talks with outside investors

A partner at Creative Artists Agency publicly acknowledged Tuesday that the entertainment and sports powerhouse has been in discussions with private equity funds about an investment in the firm.

In remarks made during the Financial Times’ Business of Luxury Summit in Beverly Hills, one of CAA’s managing partners, Bryan Lourd, confirmed published reports that the agency was meeting with outside firms, which he declined to identify.

According to the New York Times, the agency is in discussions with private-equity and buyout giant Kohlberg Kravis Roberts & Co. and investment firm TPG Capital. Neither firm would comment on speculation.

CAA is looking for new sources of capital to expand its business as every talent agency is adjusting to a changing Hollywood economy.

The mainstays of the agency business — commissions and so-called package fees paid for bringing together writers, directors and actors on projects — are under intense pressure as studios look to trim overhead.

Film studios have been greenlighting fewer films and seeking to curb the amount of money spent on salaries and promotion. The television industry, similarly, is dealing with audience fragmentation and a deterioration of the syndication market, hurting the long-term value of TV shows for agencies.

This new reality motivated last year’s merger of the William Morris and Endeavor agencies.

The sports world is seen as one area that can augment the agency’s traditional line of business.

CAA has been aggressively expanding its sports practice over the last four years and represents more than 500 athletes, including NBA All Stars Carmelo Anthony and LeBron James, New York Yankees shortstop Derek Jeter, Dallas Cowboys quarterback Tony Romo and soccer standouts David Beckham and Cristiano Ronaldo.

Lourd said the push into sports — including wooing top sports agents such as Tom Condon and Ken Kremer — has been financed from internal funds.

“I’m told that’s unusual. I’m told there’s a better way,” Lourd said during the morning keynote address.

Lourd said the discussions with outside investors might not lead to a transaction, but CAA is interested in exploring its financial options. In the event that CAA brings in outsiders, Lourd said he and other top agents, Kevin Huvane, Richard Lovett and David O’Connor, would remain with the agency.

“That’s not accurate that we’d ever turn over control of our company or leave,” Lourd said of one report that stated the partners wanted to cash out. “We all love it.”

dawn.chmielewski@latimes.com