William Morris and Endeavor set to form new talent agency powerhouse

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Talent agencies William Morris and Endeavor are expected to vote Monday on a merger that would create a representation powerhouse in Hollywood that would rank second only to the long-dominant Creative Artists Agency.

The combined entity, easily the most talked about hookup in town since Angelina Jolie and Brad Pitt, would be better positioned to survive the shrinking economics of the entertainment industry, in which fewer films and network shows are being made along with studios squeezing salaries paid to talent. These developments, and others, are hampering the agency business that depends on commissions and fees from their clients for revenue.

A unified William Morris and Endeavor, likely to be called WME Entertainment, would emerge be a powerful new force, gaining leverage to counterbalance the studios’ growing clout. It would boast more than 300 agents, a formidable client roster and combined revenue of about $300 million. Though a deceptively modest sum in an age of billion-dollar government bailouts, it belies the outsized influence an agency has, because it is at the nexus of connecting talent with producers and distributors.

The deal could trigger a new era of consolidation, putting pressure on other smaller agencies, including United Talent Agency and Paradigm, to combine with larger firms. The last major talent agency consolidation was when International Creative Management bought the scrappy Broder Webb Chervin Silbermann Agency in 2006 to inject new life into ICM’s television business.

Blending the two different cultures of William Morris and Endeavor will entail a period of upheaval that rival agencies will seek to exploit by pursuing talent or disaffected agents, who would bring with them valuable clients. Some agents may leave the combined firm to form new management companies or agencies, just as Michael Ovitz broke away from William Morris Agency in 1975 to found CAA.

Talks between William Morris and Endeavor have been taking place for months, with William Morris Chairman Jim Wiatt encountering with some internal opposition from agents who worried they would be edged out of the merged agency’s power structure.

-- Dawn Chmielewski and Meg James