The Scoop
The talent agency UTA arrived at the advertising festival in Cannes last June in a triumphal mode: They’d acquired the ad consultancy MediaLink, whose parties and meetings are central to the festival, and which had ensured that UTA stars dominated the program.
We joined UTA president Jeremy Zimmer for breakfast at the Hotel Barrière Le Majestic one morning that week, and asked him about his new partner. He was now in business with MediaLink CEO Michael Kassan, a legendary advertising industry fixer and dealmaker. Zimmer had plenty of praise for Kassan’s company, but the conversation turned a little sour when we mentioned Kassan’s favorite aphorism, “No conflict, no interest.”
“He’s got a lot of jokes,” Zimmer replied dryly. “And he did not coin ‘No conflict, no interest.’ I might have even said it.”
It was a flicker of momentary annoyance that foreshadowed the public implosion of a business relationship between the two men that collapsed on Tuesday with an attendant spree of legal action and spin.
The entertainment trades first had UTA’s version of the story: The talent agency had “fired Kassan for misuse of company funds following an investigation,” which over the course of several months found that he had spent over a million dollars in a year on private jets, a company credit card for his wife, and an apartment for his driver, among other extravagances.
In the ad trades and an arbitration claim, Kassan told his version: He’d been promised he would run marketing for all of UTA, only to see Zimmer promote two of his allies to run that function instead.
Other talent agencies basked in schadenfreude Wednesday, while across the advertising industry there was simply puzzlement: Did UTA not know who they were hiring?
The 73-year-old Kassan’s reputation for extravagant spending didn’t just precede him — it was pretty much his brand. Kassan, in his reply, noted that Zimmer had accompanied him on the private jet flights that were now in dispute, and made frequent references to how Kassan “rolls.” His career is also not that of someone who wins employee of the month every month. He was disbarred in 1995 in a complex dispute over the chicken franchise El Pollo Loco, though he had his license restored in 1999. That year, he sued his employer, Interpublic, for breach of contract and defamation. His friends were not shocked that the UTA relationship ended badly.
One longtime Kassan friend, AJL Advisory CEO Lou Paskalis, said that Kassan had realized during an earlier acquisition, by the events company that runs the Cannes Lions festival, Ascential, that he couldn’t spend public company money the way he did in the privately-held business he founded. So Kassan negotiated with UTA for a $950,000 annual expense account, according to Kassan’s representatives.
What’s more, Kassan wasn’t an employee you could fire from an existing business — he was MediaLink. His relevance in the media industry comes from his relationships — in particular from the fact that he is ubiquitous in “agency reviews” — the process by which companies decide to hire and fire ad agencies. Agency chiefs need him as much as he needs them.
“What UTA failed to recognize is that the asset MediaLink is worth what it’s worth because of the asset Michal Kassan,” said Paskalis. “Michael could open something called “2.0” tomorrow and 90% of his clients will move over to “2.0.”
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UTA’s acquisition of MediaLink was driven by a business case: That MediaLink could deliver advertising dollars directly to the agency’s star clients, outside the traditional channels of the advertising industry. This is a longtime, oft-frustrated, Hollywood dream, one talent agencies have been chasing since Michael Ovitz won Coca Cola’s business in 1990.
MediaLink did not, in its short time inside UTA, deliver that kind of massively transformative deal. Two people familiar with its finances said MediaLink missed its revenue goals in 2023, albeit in the context of a tough year for many of its competitors— and not as bad a year as other parts of UTA that were more directly affected by Hollywood strikes. A UTA representative dismissed the revenue miss, saying that MediaLink has the agency’s support, and the business is performing well and has potential for growth.
Internally, MediaLink told staff in a note that it was “operating business as usual.” The company also privately reassured some clients that all was well, and that it would continue to show up in force at major events, including the Cannes Lions advertising festival where MediaLink has an unmissable presence.
Max’s view
The underlying logic of the UTA MediaLink tie up still makes sense. You only had to watch this year’s Super Bowl to see how central actors and other celebrities have become to the most expensive parts of the marketing industry. And amid declining television viewership among target ad demographics, the talent agencies have offered a convenient line to influencers, who specialize in monetizing their fans’ trust. You see why the talent agents are so eager to meet directly with Chief Marketing Officers: They have a lot to talk about, without advertising agencies controlling the relationship.
This deal has imploded spectacularly for reasons that appear to have more to do with culture than with faulty business logic. UTA has insisted that Kassan’s departure from the company is purely a consequence of reckless and unethical personal spending, not a reflection on the business’ performance, particularly in a tough year. But few observers believe that if the deal had delivered, Zimmer would be questioning Kassan’s longstanding spending habits.
Now the real drama of the deal will play out at Cannes, where Kassan turned MediaLink into the seaside nerve center. The MediaLink party at the Hotel du Cap-Eden-Roc, which last year featured Lizzo, is the festival’s hottest ticket, and the VIP section mixes ad-friendly celebrities and big ad spenders.
MediaLink and Kassan will of course both show up at Cannes, Paskalis predicted: “Michael will probably be at the roof of the Carlton, holding court informally and negotiating his contract.”
Notable
- In Puck, Dylan Byers argues that the suit is representative of broader disruption to the advertising business and “whatever Kassan was doing with company funds, it’s clear his actual business wasn’t doing all that well.”
- “It’s not entirely clear what UTA’s MediaLink will look like without Kassan,” writes Variety’s Brian Steinberg. “But Kassan without UTA? Chances are he will be just fine — as long as he still has his connections.”
- Business Insider speculates that “Kassan’s departure may mark the beginning of the end of the advertising industry schmoozefest.”