Liberty Media Reportedly in Talks to Purchase a Stake in Creative Artists Agency

Wiktor Szymanowicz / Barcroft Media via Getty Images
Lady Gaga and Bradley Cooper attend the UK film premiere of 'A Star Is Born' at Vue West End in London on Sept. 27, 2018.

Liberty Media is reportedly in talks with Creative Artists Agency about making an investment in the sports and Hollywood talent agency that represents stars like Brad PittBradley Cooper, Lady Gaga and Beyonce.

The agreement would give Liberty, which owns a 35% stake in Live Nation and a controlling interest in SiriusXM and Pandora along with Formula One racing, an attractive representation component for Liberty's holdings in the entertainment space. First reported by the Financial Times, the potential investment is reporting being negotiated directly between Liberty and CAA, with TPG, the private equity firm that owns a 60 percent stake in the talent agency, receiving updates on talks but not directly participating in the discussions.

A deal with CAA could mean greater access to rights holders, professional athletes, film and TV talent and musical artists for Liberty's large portfolio of media companies, music firms and sports teams like the Atlanta Braves. Liberty Media has a market cap of $12.7 billion and is overseen by CEO Greg Maffei and billionaire chairman John Malone

Neither Liberty Media nor CAA commented on the talks, while a rep from TPG told the Times that it was not involved in "active discussions" between the two sides and said there was no guarantee an agreement would be reached. CAA has several minority shareholders including the Singapore-based investment fund Temasek and China’s CMC Capital Partners. TPG first invested in CAA in 2010 and purchased a controlling interest in the firm in 2014 from Richard Lovett, Bryan Lourd, Kevin Huvane and David O’Connor (who left CAA in 2015) who had purchased CAA in 1995 from its original ownership group headed by Mike Ovitz and Ron Meyer

Over the last decade, private equity firms and employee funds have reshaped the agency business. Endeavor, which owns agency WME along with Ultimate Fighting Championship and the Miss Universe pageant, sold a stake in the agency in 2013 to Silver Lake Capital to help fund acquisition of IMG, and has since accepted investments from the Canada Pension Plan Investment Board and Singaporean fund GIC. Last year Endeavor canceled a $400 million investment from the government of Saudi Arabia in response to the murder of Washington Post columnist Jamal Khashoggi. In August, United Talent Agency announced that Investcorp and the Public Sector Pension Investment Board had made an investment into the agency run by Jeremy Zimmer.

Besides representation, CAA is a diversified firm that also covers brand consulting, licensing and investment banking. While a stake in the talent agency would certainly be a prestigious addition for Liberty, it's unclear whether officials at Liberty are serious about a deal or just floating the idea to the investor community. Last year Liberty made headlines when several Wall Street analysts argued that Liberty should purchase a controlling interest in Live Nation and hire its CEO Michael Rapino to run SiriusXM and make a move on iHeartMedia as it worked its way through bankruptcy court. While the rumors sparked plenty of buzz in the investor community, sources tell Billboard the two sides were close to making a deal and eventually moved on.