Some of Hollywood’s top talent agents and executives at Creative Artists Agency, which represents A-listers Julia Roberts and Brad Pitt, are in line for a nearly $400-million payday as the agency seeks a $1.15-billion loan to help buy back employee shares.
In the aftermath of rival Endeavor’s failed initial public offering last month, CAA and its bankers are in talks with potential creditors to replace an existing loan of more than $750 million at potentially more attractive interest rates, said a person familiar with the talks who was not authorized to comment.
The balance would fund a buyback of shares from a minority of employees, the person added.
Among CAA’s 2,000 workers, only a select group of executives and agents owns shares in the company, including veterans Bryan Lourd, Kevin Huvane and CAA President Richard Lovett. Most of these employees acquired their shares when private equity fund TPG became majority owner of the Los Angeles firm in 2014, the person said.
With the move, CAA takes advantage of continued low interest rates to lock in cheap financing. It also allows the company to circumvent the need for a risky public offering, while rewarding staff whose shares have vested after five years.
Deadline first reported on the fundraising effort.
Credit rating agency Moody’s affirmed CAA’s credit rating Wednesday in a statement, detailing plans for the $1.15-billion loan and a $125 million revolving credit facility. The rating agency noted that leverage would be high following the proposed loan but said CAA is expected to benefit from positive industry conditions driven by strong demand for content over the next two years.
The agency saw a surprise exit this summer when CAA Global Chief Executive Steve Hasker, who was in charge of most of CAA’s business outside of traditional talent representation, stepped down after less than two years in the role.
Hasker was tasked with building business in its joint venture in China, and with its investment bank Evolution Media Capital and innovation arms CAA Ventures and CAA Labs.