Two big Hollywood talent agencies poised to merge

By Alex Dobuzinskis

LOS ANGELES (Reuters) - Two of Hollywood's top talent agencies, William Morris Agency and Endeavor, were poised on Monday to finalize a merger that would enable them to weather a production downturn and challenge their powerful rival Creative Artists Agency.

The board of William Morris and the partners who run Endeavor were meeting on Monday, amid anticipation the two private companies would soon announce a merger.

A combination of the 111-year-old William Morris and the 14-year-old Endeavor would create a company with more than 300 agents, and combine the former's strength in reality TV, music and books with the latter's edge in film and TV, experts said.

"You've got one agency that predates the existence of movies and another one that's a scrappier, hipper upstart," said entertainment attorney Jonathan Handel, who is not involved in the deal. "They really do complement each other in terms of their strengths."

The merger could also lead to layoffs and departures at both agencies as the two shed duplicate employees and as agents leave to pursue their own interests, Handel said.

A deal between William Morris and Endeavor has been talked about for months as talent agencies have grappled with how best to increase revenues in the face of tough times in Hollywood.

Declining DVD sales, slumping TV advertising and growth in reality TV, which has resulted in fewer opportunities for actors in scripted TV dramas and comedies, have all led to fewer job opportunities and, as a result, lower fees generated from actors who pay agents roughly 10 percent of their salary.

Larry Gerbrandt, a principal at Media Valuation Partners, tied the possible merger to the downturn in Hollywood.