Agents, managers feel the squeeze amid Hollywood’s economic downturn

When David Neumann launched his New York talent management and production firm in 2020, work for his clients was plentiful.

Streamers rushed to green light new series and films to bring more content to their services. There were so many new programs, viewers couldn’t keep up.

A few years later, the business has soured. Studios suspended many Hollywood productions during last summer’s writers’ and actors’ strikes, and work in film and TV hasn’t bounced back. Entertainment companies shed jobs, networks scaled back the number of new shows. Talent reps were faced with more competition for fewer opportunities. And the threat of artificial intelligence has caused further anxiety for actors, creatives and the people tasked with getting them work.

The contraction has created a difficult environment for talent agents and managers, whose income depends on whether their clients land jobs. Neumann said revenue at his company, called Newmation and based in Midtown Manhattan, is down 50% from 2022. If he had to come up with a movie title based on the current situation, he said, he already has a title in mind: “My Fingers Are Slipping.”

“It has been a very unprecedented time where there has been overall slowness with the demand for content and production,” Neumann said. “Buyers are commissioning far less. They’re buying less. There’s such a wave of insecurity across all areas of the industry.”

Talent agents are instrumental in building Hollywood careers for budding stars, getting projects made and advocating for better compensation for their clients. They’re also where many young people, including recent college grads, find their way into the entertainment industry, often working long hours for little pay.

But agencies and management firms have undergone significant changes in recent years and faced serious economic pressures as the industry undergoes shifts.

The largest agencies were forced to change how they do business after a fierce previous battle with the Writers Guild of America over the practice of collecting packaging fees on projects. WGA members fired their agents en mass in 2019 in an effort to do away with those fees and to stop agencies from owning their own production companies, which the writers saw as conflicts of interest. The scribes won.

Over the years, talent firms took on private equity funding and businesses merged, in part to help increase their leverage with a consolidating studio system. Creative Artists Agency acquired rival ICM Partners, Hollywood’s fourth largest agency, in 2022. Last year, representation and marketing business Wasserman bought management firm Brillstein Entertainment Partners.

The industry headwinds have even forced some out of business. A3 Artists Agency this year sold part of its company to talent agency Gersh, before the 47-year-old A3 shut down, blaming significant financial losses from last summer’s strikes.

“If the actors and writers are not finding work, then that means that the agents and the managers who are representing them are not receiving a talent agency or a management company commission directly,” said Abrams Artists Agency founder Harry Abrams, who sold his business in 2018 to its last owners, who then rebranded it as A3. “So certainly it’s affecting their business and certainly affecting their bank account, no question about it.”

Abrams, co-author of the agents’ career guide, “Let’s Do Launch,” added a dour outlook. “There have been other agencies that have closed, and we will probably see more of that in the future,” he said.

L.A. talent agent Robyn Lattaker-Johnson remembers when she and her colleagues at A3 Artists Agency were able to source upwards of 20 to 30 job opportunities a week in the summer of 2022 for showrunners on unscripted projects, but that dropped to less than 10 a week last summer as studios cut back on shows.

Talent representatives blamed layoffs caused by mergers and budget cuts at entertainment companies for creating a situation where executives who once took their pitches were losing their jobs. Studio executives who survived the cuts were either afraid to take risks or had to deal with additional steps to get necessary approvals, talent representatives said.

“The executives seemed to be a bit more cautious about what they were championing and pitching up and there were also significant budget cuts,” Lattaker-Johnson, 53, said. “So that essentially results in fewer shows getting green lit, which means fewer opportunities for showrunners, and it just goes down the line. If I can’t staff my showrunners, I’m not making money.”

A3 declined to renew Lattaker-Johnson’s contract last fall before the company closed. The firm is engulfed in a heated legal battle, in which two A3 partners sued the agency’s majority owner for breach of contract and fraudulent inducement. That lawsuit is paused, as the A3’s parent company has filed for Chapter 11 bankruptcy. One of the partners, Brian Cho, has since started a new business, Arise Artists Agency.

Lattaker-Johnson, a former senior-level network executive who became a talent agent in 2021, tried to find a job at other large agencies last year, but openings were hard to come by. Many agencies instituted hiring freezes during the strikes, she said. For now, Lattaker-Johnson is continuing to work as an agent on her own in L.A. without a salary. She collects commissions from work she lands for clients.

“If the economic environment doesn’t improve within a couple of months, we are going to have to make some tough decisions,” she said, meaning her family may have to cut expenses or relocate.

A3 wasn’t the only agency shedding workers. CAA had a round of layoffs in March, following a workforce reduction of 60 employees last August as the Century City company restructured and cut costs. The March layoffs included agents who came over to CAA after it bought ICM Partners. Another agency, Verve, also had layoffs last year.

“Consolidation always happens when there is contraction,” said Keyvan Peymani, a former ICM Partners executive who is now an investor and adviser . “Fewer opportunities are going to be available.”

The contraction has made it especially difficult for up and comers in Hollywood to get their feet in the door, many of whom gain skills on how to navigate the industry by working at a talent agency in the mail room or as assistants.

“It’s a lot of highly overqualified candidates reaching out for a very small selection of jobs,” said a former A3 support staffer who declined to be named. After getting laid off at the agency, the former employee applied to around 200 jobs, but struggled to get offers, including for roles outside the entertainment industry.

“It’s the card I’m dealt, which is unfortunate,” said the former A3 support staffer, who recently landed work at a talent management firm. “What it’s taught me is a little bit of resilience. … hopefully this is something I can keep in my back pocket where at least it’s not as much of a roller coaster as I started on.”

To shield against fluctuations in film and TV production, some talent agencies and management firms have diversified into other categories of representation outside of film and TV. Now they represent clients including social media influencers, musicians, athletes, broadcast journalists and brands, which they say have helped offset changes in the marketplace.

Jon Liebman, co-CEO of Brillstein Entertainment Partners, said his company has seen growth in areas like comedy touring and music. His operation has added five managers to its team since it was acquired by Wasserman, including people who represent film and TV talent.

“We’re in a transitional period, but there’s a scarcity of talented artists and in the long run, premium content is here to stay,” Liebman said.

For many observers, it doesn’t always seem that way. Box office in the U.S. and Canada is down 24% so far this year compared with the same period of time in 2023, which has been sending jitters throughout the film industry. But despite signs of trouble Bryan Besser, co-founder of Verve, said that the demand for content is resilient.

“The logjam in content production is slowly clearing,” Besser said. “We believe in market stabilization as the volume of great product returns which hopefully will increase the habit of going to theaters again.”

However, the challenges have forced many to reduce expenses. One senior agent at a mid-sized firm who declined to be named said he is saving money by not traveling to see clients working on location in places like the East Coast and Midwest, which he used to do four or five times a year. Instead, the agent now takes his clients out to dinner before or after they go on a job out of state.

He’s also taking fewer risks on new talent. Before the downturn, his agency would recruit emerging actors out of college showcases. They are doing less of that now. “Breaking a client right now is really, really hard,” the agent said.

Some talent managers said they are supplementing their income by consulting for companies or wealthy individuals who want to gain a foothold in the entertainment industry.

As production in the U.S. slows down, some agents and managers say they have sought work for their clients and financing for their projects in international markets. The budgets are not as big as Hollywood productions, but at least there are projects getting made.

Steven Adams, founding partner at Alta Global Media, helped get his actor client Jimmy Jean-Louis hired to star in and co-produce an Indian film called “The Goat Life,” which was released earlier this year.

Adams said he’s also looking to take television and film scripts that were languishing in development and turn them into graphic novels.

“We’re creative people,” Adams said. “We’ve got to lean into what may look like a disaster and turn it into an opportunity.”

Editorial library director Cary Schneider contributed to this report.