Transactional Awareness

Of Tire Stores and Talent Agencies.

A few years ago I bought my wife a Porsche Cayenne. She rides horses, so any car she drives needs to have a trailer hitch to pull a horse trailer. While the car is an SUV, it doesn’t come with a tow hitch option, no Porsche model does. While we were deciding, the Salesman was nice enough (desperate for a sale) to take it down the road to a tow hitch installer and reported back that with modification a hitch could be installed on the suspension frame. So, I bought the car and had the hitch installed.

That said, we rarely trailer horses with it. We have it in case we need to move the horses quickly if we get a fire evacuation. That only happened during the Woolsey Fire, knocking charred wood. But, we got everyone out safely.

Mostly, since I live on a property with horses, which has been a horse property for 50 years, I use the rig to bring generations of broken and rotting fencing, among other things, to the dump. You would be surprised how much stuff horses break unless you own horses, in which case you won’t be surprised at all.

You should see me at the landfill. I pull in with my douchebag Porsche trailer rig amid the dump trucks, pick-ups with plywood side extensions, and trash trucks. Oh, the looks I get.

Be it Karma, or the dump guys taking their revenge on my white privilege by making me park in places they know have nails and screws sticking up, I come away with something in a tire virtually every time I’m there.

What I want to talk about is, when I invariably show up at my local tire store to get the puncture du jour tended to. I pull in, they know me well at this point, and ask me which vehicle, Porsche or Trailer, and which tire. I sit down, they go fix it, and I’m gone in 20 minutes.

Perfection. To take out a nail and patch a tire is $25. It’s the most satisfying $25 you can spend. Also, I’ve been going there for 15 years and the price has never gone up. When I paid today, I told the guy helping me, “I love you guys. Every time I’m here, you make it easy.” It’s such good service that I have no problem saying I love you to a bald, bearded biker dude who probably has a lower back tattoo of the Harley Davidson logo. Great service is great service.

Isn’t that the most important thing in business? Taking your product, no matter what it is, and making it easy for your client? Not making it “look” easy, which is something entirely different. Actually making it easy, and knowing it’s the small things that make a relationship.

What do the elements of that consist of? Well, first of all, believe in your client first and foremost. Secondly, be in the business your client is in. Third, know what your client wants before your client does. I mean, if you’re offering a service, you can only offer a service where you know the nuts and bolts of it. You can only get a client to say they love you if you are so fully engaged with what they do and need, that you can pay attention to the little things.

In the case of the Tire store, they know their business well enough to know, that if I come in with a minor fix that will take 10 minutes, no matter how backed up they are, they’ll handle it and get me out of there quickly for very little money. That way, when the Porsche needs new tires at $500 each, I’m coming to them. So, they build their whole system aimed at that outcome. By the way, I replaced the front tires on the Porsche a month ago and I took it right to them.

Tire Stores and Talent Agencies have very little in common on the surface. However, both are customer service organizations. Tire Stores deal predictably in tires. Talent Agencies appear to deal in talent, but in reality, they deal in information that relates to talent. Massive amounts of information about projects which are being produced in all mediums, everywhere around the globe. The outcomes we are interested in are putting our clients to work on them based on their personal goals and needs.

But, from there, it comes down to philosophy. Is your business transactional, or aspirational? A $25 flat fix is aspirational. It’s also transactional, but not very. It’s focused on maintaining the customer relationship, and I have to posit that they have the same kind of relationship with their employees. Even bald, bearded, biker dudes with lower back tattoos seem happy there.

What we’re seeing in Hollywood, as the big agencies (CAA, WME, UTA) try to eat the industry, (see my article on this)their wild diversification into every nook and cranny of the landscape, stock buybacks, hedge fund sales, and an increasing push away from representing filmmakers, and into arbitrage, financing, owning pieces of sports leagues and teams where the profits and influence are now far greater. They are no longer aspirational. They are wholly transactional. They are following the lead of tech companies, streamers, and studios at this point. It is not about Art or Artists. It’s about profit per transaction.

Some blame this on the forced end of packaging by the WGA which skewed the big agency business model, but I think that’s a minor influence on what has become a toxically transactional marketplace. The big money is just not there anymore to support these mega-agencies to continue to become more mega year over year, and those at the top of these firms raking in tens of millions annually. They would rather find a Soccer team for one of their movie stars to buy, and commission than help the myriad of Artists that do the real work of filmmaking that they claim to represent.  

When money itself is the aspiration, art becomes merely transactional.

The disconnect is that, by nature Art is aspirational, reflecting the Human condition through the point of view of the Artist. When the transactions of Art are not profitable enough, or the profit margins needed exceed what art can provide, the Capitalists just move on. When pieces or employees cease to provide transactional value at a high enough margin, they are abandoned. It’s the Hunger Games without the bows and arrows or the freaky costumes.

For those who still wonder what is wrong with the current state of Hollywood, go back and read the last three paragraphs again.

You may be thinking, gee Steve you have a Porsche and horses, clearly some transactions were involved. I’d say of course. A good mix of aspirational work that led to transactions over a long 35-year career. I’m also lucky to have a very talented wife who can take any piece of real estate and triple its value.

I feel entertainment is in a rebuilding phase. The Hollywood ecosystem is very resilient. Most of the very good Agents have left the big agencies and joined smaller outfits or become Managers. It’s very hard to represent Talent when the Corporate philosophy doesn’t support all the aspirational ($25 flat fix) work that has to be done to support an Artist in the beginning, middle, or even later parts of a career.

When the Corporation is merely Transactional, pressure is put on reps and Artists to bypass molding careers to just make the numbers. This focus on the immediate payoff results in bad decisions and a race to the bottom. It’s not any way to make movies. 

If you’re an Artist repped at a big agency, you may be happy… for now. There are still some good Agents there. But, how much longer will the 10% of day rates be enough return in what has become a toxically transactional philosophy? It will always be lurking in the background, and assert pressure to create revenue at any cost. The agents are probably more concerned with getting laid off for not making their nut than the quality of the next project. It only takes a few bad choices to sink a career, so the whole corporate structure matters.

If you disagree with that statement, consider that on their last earnings call, it was stated that Endeavor Group Holdings (WME) has 10,000 employees across the company and only 1500 work in the Talent Agency division that is supposed to be their foundational business. That’s 15% of the workforce. Of its total revenue of 1.8 Billion Dollars, only 19% was from representation. Numbers don’t lie. That is not a Talent Agency. That is a conglomerate that is now purely transactional and moving on.

The same is happening at CAA and UTA, but only WME has to report their numbers as a public company. That will cease of course as they become private again. But, further evidence can be found, as UTA promoted 24 agents to Partner this week. Only 2 were traditional talent agents. The rest were from the Sports, Music, and other far-flung divisions that don’t have much to do with filmmaking. The gig is up.

The good news is that there are still many Hollywood agencies, WPA included, that remain artist-focused first and foremost, balancing the aspirational with the transactional. We’re not following the quick money. We’re in it to rep Talent for the long haul. Day by day, project by project, career by career.

Transactional is short-term thinking. Aspirational is long-term thinking. To make a living, you’ll end up somewhere in the middle of this equation, and that’s as it should be. 

We’re tightrope walking right now. While money is tight, and Hollywood resets, the impulse might be to go for the quick transactional money or people offering it. But, transactional money alone doesn’t believe in Artists, Executives, or Art. It believes in the next transaction.

Any day of the week, I want to be the balding, bearded, biker dude with the lower back tattoo and the $25 flat fix, and not the men and women in the little black suits wringing the last dime out of Hollywood. I will always know exactly what the Biker Dude does for a living, and I will always know where he stands. I might just have to get a lower-back tattoo of the Harley logo to prove my point.