{"id":2874,"date":"2024-10-03T13:21:35","date_gmt":"2024-10-03T13:21:35","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/caa-sues-range-media-partners-for-stealing-confidential-information\/"},"modified":"2024-10-03T13:21:35","modified_gmt":"2024-10-03T13:21:35","slug":"caa-sues-range-media-partners-for-stealing-confidential-information","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/caa-sues-range-media-partners-for-stealing-confidential-information\/","title":{"rendered":"CAA Sues Range Media Partners for Stealing ‘Confidential Information’"},"content":{"rendered":"\n
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\n\tFor years, Hollywood talent managers have grumbled at a California law that puts them in danger of losing their commissions if they\u2019re found to have engaged in activities related to obtaining work for their clients.<\/p>\n

\n\tThe issue relates to the Talent Agencies Act, a licensing scheme that was originally enacted to regulate agents and ensure that they\u2019re acting in their clients\u2019 best interests. The law says that only licensed agents can \u201cprocure\u201d work in the entertainment business and that managers caught doing the same can have their contracts voided and commissions forfeited. Although lawmakers\u2019 intent was to prevent unscrupulous business dealings, like conflicts of interests, it grew to be used as a sword largely wielded by talent to sidestep having to pay commissions. At least $250 million in fees have been nullified over the last 55 years, per the trade group representing managers in the entertainment industry.<\/p>\n

\n\tBut in 2020, a former\u00a0CAA<\/a>\u00a0employee recognized a quirk in the law that managers could take advantage of. By his thinking, obtaining a license to secure work opportunities for clients wasn\u2019t required if you could tolerate the risk of getting sued and losing the commission.<\/p>\n

\n\t\u201cIt looks like there is a \u2018gray area\u2019 on how managers are supposed to technically procure material since they don\u2019t have a license form the California Labor Commission,\u201d this unidentified ex-CAA employee wrote in an email. \u201cHowever as long as the artist doesn\u2019t sue the manager \u2026 looks like managers are fine?\u201d<\/p>\n

\n\tThe theory outlined in that message became the central business model for\u00a0Range Media Partners<\/a>, a management and brand development firm founded later that year by departing partners from a series of agencies, according to a\u00a0lawsuit<\/a>\u00a0filed on Monday in Los Angeles Superior Court from CAA against the company. It seeks a court order blocking Range from further violating the TAA by engaging in activities reserved for licensed agents and representing Writers Guild of America members without permission from the guild, which would effectively foreclose core functions related to securing work opportunities for talent.<\/p>\n

\n\tThe thrust of the complaint is grounded in Range allegedly stealing confidential information to poach clients, but its scope reaches the heart of the firm\u2019s business dealings. CAA claims that Range, which didn\u2019t respond to a request for comment, is actually just a rival talent agency masquerading as a management company, allowing it to skirt laws and guild agreements that give it an unfair advantage over competitors. In practice, Range is performing all the tasks of a talent agency, while also structuring deals in ways that agencies cannot, the lawsuit says. One example: the company can offer high-profile clients the ability to avoid paying a commission in favor of giving it a producer fee or credit on their project.<\/p>\n

\n\t\u201cThe Range Founders told at least some of these CAA clients that they did not \u2018need\u2019 a talent agent to procure work for them, because Range could do it all,\u201d states the major talent agency\u2019s complaint, which flags stolen confidential information on client negotiations, revenues, preferences, interests and upcoming projects, among other things.<\/p>\n

\n\tIn a pitch deck to investors, Range proclaimed itself as the \u201crevolutionary\u201d successor to CAA and Endeavor, according to the lawsuit. It touted plans to \u201crecruit high end representatives away from their current incumbent,\u201d and to \u201crethink the system of representation,\u201d with \u201cproduction services as a cash cow.\u201d<\/p>\n

\n\tSince its inception four years ago, Range has surfaced as a competitor \u2014 albeit a small one \u2014 in a talent agency landscape that\u2019s consolidated into three major players after CAA in 2022 closed its acquisition of ICM Partners. It\u2019s drawn investments from hedge fund billionaire Steve Cohen\u2019s Point72 Ventures, media mogul John Malone\u2019s Liberty Global, TPG founder David Bonderman\u2019s Wildcat Capital, family entertainment company Playground Productions and A+E Networks, which serves as a co-producer on scripted TV projects set up at the company.<\/p>\n

\n\tRange\u2019s emergence coincides with a time in which talent is questioning whether they even want an agent. After the Writers Guild of America in 2019 sued Hollywood\u2019s four biggest talent agencies in\u00a0a fight<\/a>\u00a0over\u00a0packaging fees and agency-owned production entities, thousands of writers fired their agents, with some power players, like Damon Lindelof, never hiring them back. Some, including Jennifer Lawrence and Leonardo DiCaprio, haven\u2019t had agents for years. Those two megastars have their interests represented by Rick Yorn of business management firm LBI Entertainment as Hollywood evolves into a business where there\u2019s often overlapping responsibilities between agents and managers. In practice, both provide career advice and engage in activities related to getting clients work.<\/p>\n

\n\tAmid this shift, agents are increasingly pivoting to management. Theresa Kang-Lowe and Phil Sun have both left WME in recent years to start their own management firms. Dave Bugliari, Mackenzie Condon Roussos, Rich Cook, Michael Cooper, Susie Fox, Sandra Kang, Rachel Kropa, Chelsea McKinnies, Peter Micelli, Mick Sullivan and Jack Whigham all left top agencies to become founding partners at Range. Some of the ex-CAA employees who left for Range are in arbitration with the agency over cancelled equity.<\/p>\n

\n\t\u201cBefore, the agents were the most powerful. Period,\u201d UTA CEO and cofounder Jeremy Zimmer\u00a0told<\/a>\u00a0Vanity Fair<\/em>\u00a0last year of the rise of management firms. \u201cNow there might be a splitting of the power.\u201d<\/p>\n

\n\tStill, the gambit could backfire on management firms engaged in \u201cprocuring\u201d work for clients. The Deftones in 1997 filed a complaint with the California labor commission seeking to void agreements with ex-manager Dave Park for violations of the TAA. A commissioner later voided fees on the basis that Park secured 84 performances for the band. Marathon Entertainment owner Rick Siegal later sued the state Attorney General in a lawsuit claiming it\u2019s unconstitutional to enforce the law on talent managers. After he lost that case, nearly 200 talent managers supported his appeal to challenge the TAA, which still stands.<\/p>\n

\n\tIn its lawsuit, CAA argues that the TAA bars Range from engaging in activities related to obtaining work for clients and that civil lawsuits from talent can\u2019t be the only recourse. But it remains to be seen whether the agency has the right to pursue a court order blocking further violations of the law since it may not have been directly harmed by the conduct.<\/p>\n

\n\tIn that scenario, it may be up to the WGA, which didn\u2019t respond a request for comment, to take action against Range if it\u2019s found to have violated rules related to securing work for clients. CAA alleges that the company is violating a guild rule barring agencies from acting as packaging agents or owning a major stake in a production entity.<\/p>\n

\n\tThis article was originally published by The Hollywood Reporter<\/a>.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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