- 📰 This week:
- The Great Business Management Roll-Up
- Joe McLean on protecting athlete wealth
- Miller Kaplan on avoiding social engineering scams
- Prager Metis announces Latin Entertainment Group
The Great Business Management Roll-Up
Hollywood’s “merger mania” that has been going on for several years now, has not been limited to acquisitions and mergers between studios, production companies, and media conglomerates. While some of the most famous deals in the past few years include AT&T purchasing Time Warner for $85 billion, Disney spending $71 billion to buy 21st Century Fox, and the merger between Viacom and CBS, there has been a similar trend in the business management industry.
In July of this year, NKSFB, a Los Angeles-based business management firm backed by Focus Focus Financial Partners ($2.2 billion market capitalization) purchased CRM Management for an undisclosed amount. Earlier, in September of 2019, Focus Financial Partners-backed Colony Group bought business management firm Glass Malek LLP.
Though there’s a variety of reasons as to why mergers happen (monetization being a key one), the common understanding is that an important factor is often partners looking for an exit and there not being a clear successor.
Business manager Mickey Segal of NKSFB said in The Hollywood Reporter interview that one of the biggest things in the industry is succession. “Lots of firms don’t have the next guy in line to take over the business, and they’re aging, so merging helps solve the issue,” Segal said.
In a similar fashion, Brandy Davis of Macias, Gini & O’Connell (MGO) said for the same story that it’s getting hard for the smaller firms to compete. “There’s also a lot of succession,” Davis said. “The older business managers don’t have a next-generation to turn their practices over to, so it makes sense for them to sell to a larger firm.”
Though many industry experts believe that this type of consolidation will not significantly change the core concept of the business and would only serve to provide for a smooth transition of power, some aren’t on board with the whole concept.
In an interview with Variety, Evan R. Bell, managing partner at business management firm Bell & Co said that handling clients’ money is the most intimate relationship that clients have. “When you corporatize that, you lose intimacy.”
Nonetheless, though various industry insiders may have differing opinions or preferences regarding the positives and negatives of the currently common occurrence of corporations growing into industry behemoths, most agree that the trend is here to stay.
Per Martha Henderson, head of entertainment for City National Bank who also spoke with Variety, such acquisitions will persist. “We expect the business management community to continue this consolidation trend,” Henderson said. “And of course, I expect that there will arise from this [trend] partners that break off and start new firms.”
🏀 Partner Joe McLean at Intersect Capital discusses how athlete clients are protecting their wealth during the pandemic. McLean discusses the concerns athletes face health-wise and financially as they wait for sports to begin again.
📱Partner and Chief Information Security Officer David Lam at Miller Kaplan explains how to protect from social engineering phone calls. Some tips include training in your organization to recognize these calls and using only authorized machines to access your systems.
🎼 Prager Metis International announced last week the launch of a dedicated Latin Entertainment Group to their firm. The team is led by Director Maria Del Pilar Lopez.