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William Morris is said to be near deal to buy IMG Worldwide

The deal would be a coup for WME and private equity firm Silver Lake Partners, which owns 31% of the agency.

December 17, 2013|By Daniel Miller
  • The deal would raise WME's profile in the sports business. Above, IMG client Peyton Manning.
The deal would raise WME's profile in the sports business. Above,… (Chris Schneider / AP )

Hollywood talent agency William Morris Endeavor and one of its key investors are nearing a deal to acquire sports and media agency IMG Worldwide Inc. for more than $2 billion, according to three people with knowledge of the matter.

The deal, expected to be announced later this week, would be a coup for WME and private equity firm Silver Lake Partners in Menlo Park, Calif., which owns 31% of the agency. WME would have access to a trove of new clients and, perhaps most important, a formidable presence in the sports agency business.

For WME, the transaction also would intensify its competition with Creative Artists Agency for supremacy in the talent agency business, demonstrating that the battle has moved beyond television and movies and into sports.

IMG's clientele of more than 500 athletes, models and entertainers includes NFL star Peyton Manning, tennis star Novak Djokovic, singer-actor Justin Timberlake, pop singer Taylor Swift and model Gisele Bundchen.

IMG also counts more than 90 universities as clients and represents their media rights, a hugely lucrative business. The Pac-12 college conference, for example, recently sold its TV rights for $3 billion over 12 years.

WME would pay IMG's owner, private equity firm Forstmann Little & Co., about $2.3 billion for the New York talent firm, said the three people, who were briefed on the matter but were not authorized to speak publicly.

Forstmann Little, which bought IMG in 2004 for $750 million, put the unit up for auction after the death of leveraged buyout maven Theodore Forstmann in 2011.

WME, based in Beverly Hills and headed by co-Chief Executives Ari Emanuel and Patrick Whitesell, has a clientele of more than 5,000, including Hollywood A-listers Oprah Winfrey, Charlize Theron, Claire Danes and Christian Bale. It has about 300 agents and offices in New York, London, Miami and Nashville.

Media executive Mark Shapiro, who is advising the buyers on the purchase, could end up with a role at IMG after the sale closes.

Shapiro, the former chief executive of Dick Clark Productions, has a close relationship with Emanuel. Shapiro also was once approached to run IMG by Forstmann after he bought it almost a decade ago. Shapiro was a senior executive at ESPN for many years. He couldn't be reached for comment.

Creative Artists considered bidding on IMG early on but bailed out of the process this fall.

CAA represents 800 to 1,000 athletes and also handles corporate naming rights for sports facilities, among other services.

It also is a partial owner in Evolution Media Capital, a boutique investment banking firm that specializes in media and sports and has been involved in numerous deals including the sales of Major League Baseball's Texas Rangers and the National Basketball Assn.'s Philadelphia 76ers.

WME and CAA fiercely compete for clients and bragging rights around town. In recent months, the rivalry has played out in public, with WME launching a derisive advertising blitz that targeted CAA.

In June, dozens of ads that featured the word "CAAN'T" in CAA's signature red-and-white color scheme were installed across Los Angeles. The term "CAAN'T," of course, played off the CAA acronym.

Several of the ads were put up at the Westfield Century City mall, which is around the corner from CAA's Avenue of the Stars headquarters and a popular destination for agents.

Since Silver Lake bought its stake in WME in May 2012, the companies have actively sought to grow their business through acquisitions. This year, WME and Silver Lake made an offer to buy video streaming site Hulu, which ultimately was taken off the market by its owners, 21st Century Fox, Walt Disney Co. and Comcast Corp.

Also in the bidding for IMG was Peter Chernin, the former senior News Corp. and Fox executive whose Chernin Group partnered with private equity firm CVC Capital Partners on an offer. Talent agency ICM Partners along with private equity firm Carlyle Group also kicked the tires of IMG.

Spokespeople for WME, IMG and Forstmann Little all declined to comment. Silver Lake did not immediately respond to a request seeking comment.

Times staff writer Joe Flint contributed to this report.

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