As Hollywood studios make fewer movies in an effort to tighten their belts, top talent agencies quietly have sauntered into the void, becoming de facto bankers by enticing private equity money and wealthy outsiders to fund movies featuring their clients.
The trend marks a significant shift for Hollywood, where studios have long served as the largest source of film financing. The expanded role gives agencies more latitude in guiding the destinies of their clients and assures that artistic films continue to be made at a time when studios are taking fewer risks by emphasizing superhero sequels and franchises and in some cases forcing stars to take pay cuts.
"With movie stars, your first instinct was to go to the studios first -- now it's not," said Patrick Whitesell, a partner at Endeavor Agency, whose clients include actors Jude Law and Matt Damon. "Now you will think about going these alternative ways to get your movie financed. If you just put five more movies together, then you have five more opportunities to send your writer, actor or director to work."
The changing relationship of studios and their stars was writ large this summer when Paramount Pictures cut loose Tom Cruise because he was too expensive, sending the actor and his agents at Creative Artists Agency scrambling to find backers outside the traditional studio system. On Thursday, CAA emerged victorious by brokering a deal that pairs Cruise and his producing partner, Paula Wagner, with private equity fund Winchester Capital Management, which will provide the production duo with $100 million for approved movie projects.
The expanding role of talent agents in the production process raises an age-old question: Is talent compromised when the people who represent them have a hand in financing their movies? The actors' union has maintained for decades that agents are liable to put their own interests ahead of those of their clients if they are allowed to reap in the financial rewards of the projects they put them in.
Some financiers who have teamed up with talent agencies have had other complaints. Bob Yari, an independent film producer who joined with William Morris Agency in a pioneering effort in 2003, said agents tended to push projects because their clients were in them, not because they were financially sound.
