ICM Partners continued its European expansion with the purchase of London-based sports agency Stellar Group, the biggest acquisition in the 45-year history of the Hollywood talent agency.
Stellar, which ranked fourth last year in Forbes’ annual look at the world’s most powerful sports agencies, represents more than 800 athletes—mostly in soccer but also in track & field, cricket, rugby and the NFL—and manages current contracts totaling almost $3 billion, according to ICM.
“The world is becoming so interconnected and horizontal. The walls are all down with everything. It’s about evaluating talent and what kind of impact you can have with that talent,” says ICM CEO Chris Silbermann, who declined to disclose the price of the Stellar deal. “We feel we can apply a lot of the expertise we employ with celebrities and talent to athletes now as well. There is a natural fit.”
ICM is the smallest of the big four entertainment agencies, which also include WME, UTA and CAA. The Stellar deal heightens the competition with CAA, which launched its industry-leading sports practice 15 years ago. ICM represents stars Ellen DeGeneres, Beyoncé, Samuel L Jackson, J Cole and Khalid, as well as content creators Spike Lee, Shonda Rhimes and Vince Gilligan. With Stellar, it adds global soccer icon Gareth Bale and rising stars Saúl Ñíguez and Mason Mount to the mix.
Silbermann says they will be the foundation of a “multi-faceted” sports business that will be branded ICM Stellar Sports and will eventually include basketball, golf and tennis in the U.S., sports that are currently dominated by CAA, Wasserman, Excel and Octagon. ICM handles off-field work for several athletes like New England Patriots wide receiver Julian Edelman and New Orleans Saints safety Malcolm Jenkins, but its purchase of Stellar is its first major move into athlete representation, tying it to Jonathan Barnett, Stellar’s co-founder, who Forbes rated as the industry’s most powerful agent.
“We love sports, we love athletes. We want to grow the agency,” Silbermann says. “Synergy is a completely overused word, but it is an appropriate word because there is a lot of natural synergy with what we are doing. Jonathan and David [Manasseh] have built something amazing, and we’re going to take it to the next level.”
The purchase completes a hat trick of sorts in Europe, following a partnership with U.K. music agency Primary Talent International signed in March and a significant investment in Swedish entertainment company Albatros last month.
CAA Sports acquired London-based Base Soccer Agency last year, while Wasserman added a pair of agencies this year to its soccer roster in Spain-based Top Value and Key Sports Management in the U.K. Soccer representation is good business since commissions can reach 10% on playing contracts, while they are capped in U.S. sports leagues, ranging from 3% in the NFL to 5% in MLB. The NBA and NHL are both 4%.
This year, the coronavirus caused massive layoffs at talent agencies, as commissions dried up with live events and filming shuttered. ICM laid off roughly 40 support staff in April and enacted another smaller round of layoffs last month. But the job cuts have been deeper at ICM’s larger rivals. WME-IMG parent Endeavor had their credit rating lowered in April from B to CCC+ indicating “substantial risk.” The company scuttled a planned initial public offering in October 2019.
ICM kept its debt load in check in recent years and leaned on a $150 million investment from private equity firm Crestview Partners in December for one-third of ICM to shore up its business and go on an acquisition spree. “As things return to normal, we are committed to being stronger on the other side. There are opportunities,” says Silbermann, who doesn’t expect the live concert business to return in full until next summer at the earliest.
Silbermann started talking to Barnett and Manasseh roughly a year ago about a partnership that would give ICM a foothold in sports and give Stellar clients access to a full-service entertainment agency. Both will serve as executive chairmen of ICM Stellar Sports and run day-to-day operations. ICM founding partner Ted Chervin will oversee the sports business. The 130 Stellar employees are all expected to join ICM.
“It’s a people business. We’re not buying a bunch of patents on microchips,” says Silbermann. You have to trust those people. You have to work with those people and share a vision. If we didn’t know they were going to continue with the business, then that would have been a different calculus on how we approached this.”