The Urge to Merge

Last week I wrote how I believe the existing voice-over agencies need to seriously purge their rosters because they are all representing too much talent. As much as I think a talent culling would improve everyone’s bottom line, there is still an elephant in the room; there is not only too much talent in the system, there are also far too many agencies.   The solution would be for some agencies to fold or better yet to merge.

The Three Obstacles to Rivalry

If you look at the history and formation of voice-over agencies, almost every agency was begat by principals from a prior agency. As is usually the case, those circumstances created serious acrimony between the former and new principals and without exception that “bad blood” has lasted decades. Those rivalries and the egos fueling that bitterness are the first great impediment to any agencies merging.

The second dynamic working against agency mergers is the financial models for an agent’s pay. Every agency varies on formulas for agent’s salaries but usually the most important component is the clients that the agent represents so the most valuable agents represent the talent with the highest earnings. Of course, there are only a handful of agents who fit this criteria. The majority of agents rep dozens if not hundreds of middle to low income clients along with a small group (usually 20% of the overall group) who comprise 80% of the agent’s income.   The problem with any merger is what would be done with that enormous middle class of talent. Despite their modest earnings, middle incomes are still crucial to an agent’s bottom line. Merging therefore pits one agent’s “middle class” versus another agent’s “middle class” and creates immediate rivalries with agents and clients.

The final component is the buyers for voice-over talent. Every agent covers a group of buyers and depending on agency formulas is also paid based on the revenues booked by those buyers. Agents are well aware of which casting director or network is most apt to hire their talent and many have personal relationships with these buyers. Giving up control (and earnings) is incredibly difficult and once again creates a contentious atmosphere around collaborating agents.

Cooperate Or Else?

Here are my solutions on how the three obstacles to potential merger can be handled. Excuse me if some of the ideas appear to be flippant. They aren’t intended that way. 

  1. Egos and bad blood - everybody feels like they have been wronged at some point, but potential partners need to put egos aside and do what is best for their business. In the end, no one should be completely satisfied nor should anyone be angry either.
  2. Clients- here is a radical solution… have a draft. I am being serious. If two agencies come together they can decide on a cap for their overall list (both male and female) and then each agent can take turns and choose who they should represent - one person at a time until they reach the cap.
  3. Buyers - After the clients are accounted for, everyone can do a similar draft with the buyers/casting directors. Given the client draft, the buyer draft will take a new meaning as certain buyers will suddenly be stronger or weaker due to the combined clients and the agents can evaluate accordingly.


Mergers are the Future

Agents have watched for years as Fortune 500 companies, ad agencies, media companies and even SAG/AFTRA merged.   Has every merger worked? Of course not. The one undeniable fact is that while consolidation has happened in virtually every industry, the union voice-over business still has almost the exact same number of agencies as it did 20 years. The market suggests that some of the lesser or bloated agencies will fail but I do not think that will help the current business climate. Instead, I think the agencies need to start thinking about potential partners and begin courting.