CAA will buy a 40% stake in Shepardson Stern & Kaminsky, a 6-year-old New York marketing communications agency that has done project work for Ameritech Corp., Chubb Corp., General Motors Corp., Ralph Lauren, Time Warner Cable and TiVo. It has about $12 million in net income.
The move comes almost a decade after CAA rocked the ad agency world by signing up Coca-Cola Co. as an ad client.
The agency later moved that business to a separate shop, Edge Creative, Los Angeles. That boutique hasn't drawn any other ad accounts since then, and Coca-Cola has sent signals that it will move at least some of that business back to Madison Avenue.
"Those situations all fell apart, and we didn't want to repeat it," said CAA President Richard Lovett.
This time around, CAA is learning from its mistakes. It's now aiming not to do straight advertising but rather to represent marketers looking to own, sponsor or connect in some way with films, TV shows, or music projects.
"There is no reason that this service can't worked supplementally with advertising agencies," said Mr. Lovett. "We are not looking to steal clients from ad agencies. That's absurd."
Instead, the union of the Tinseltown talent agency and Shepardson aims to bridge the gap between corporate America and Hollywood's creative epicenter, giving the former immediate access to the top entertainment creative talent and trends.
CAA officials call it "cultural intelligence."
With the deal, CAA also is looking to avoid a longtime problem plaguing talent agencies dealing with corporate accounts.
Currently, that business takes a back seat to a talent agency's bread-and-butter -- striking deals for marquee movie and TV performers and behind-the-scenes talent. Some advertisers, therefore, don't feel fully serviced at talent agencies.
"The corporate business at talent agencies is generally there to serve the talent business," said Heidi Sinclair, a former ICM executive who is now a partner in Brand X, a Los Angeles marketing company.
For example, she said when she represented The Gap at International Creative Management she got a request from a colleague. "He asked, 'Can you get my client [a director] to direct a Gap ad?' " she recalled.
CAA executives said that's why it structured the deal with Shepardson this way.
"We are not going to tantalize potential clients with the fact that we represent Tom Cruise or Will Smith and say, 'Look, they'll do a commercial for you,' " said Mr. Lovett. "What this is, is about the collective intelligence of a marketing company and entertainment agency to hopefully create solutions for difficult problems."
With the new structure, CAA keeps its distance yet can have some influence on the final product. Also, it will avoid the mistakes it made with Coca-Cola in doing straight-on ads.
"What we lacked was an infrastructure, which is what we have now" with Shepardson, he said.
Talent agencies aren't alone in pursuing such deals.
Some traditional ad shops, such as J. Walter Thompson Co. and Grey Advertising, have their own in-house entertainment units.
"Conceptually, any ad agency that wants to pioneer new ground will strike this kind of entertainment partnership," said Marina Hahn, exec VP-strategy and entertainment at JWT, New York.
"I applaud the effort, but I wonder how large the names will be and how large the deals will be."