The talks mark the latest twist in the increasing intersection of Hollywood and Madison Avenue and signal that Interpublic, the second-largest agency holding company, is serious about identifying and facilitating the ever-broadening relationship between marketing and entertainment.
Mark Dowley, chairman-CEO of the Interpublic unit, is leading the discussions. Mr. Dowley would not comment on specifics of any agreements but said "we continue to look at that space every day." A spokesman for Endeavor, which handles stars including Matt Damon, Ben Affleck, Adam Sandler and Drew Barrymore, among others, said "Yes, we have had a couple of meetings on different occasions. No, nothing is happening right now."
Mr. Dowley said he has retained New York investment banking boutique Allen & Co. to investigate properties for possible acquisition.
Interpublic is eyeing talent shops at a time when the Screen Actors Guild is at an impasse in renegotiating the decades-old talent agencies' franchise agreements. Talent agencies now propose to allow ad agencies to buy up to 20%, a move opposed by SAG. The old agreement prohibited ad agencies from owning a stake. The Association of Talent Agents and the National Association of Talent Representatives has an agreement with the American Federation of Television-Radio Artists that allows outside parties with TV interests to buy up to 20% of talent agencies.
A deal with Endeavor would be groundbreaking. No major holding company has yet taken a stake in a talent agency although Omnicom Group in June 2000 came close to an alliance with Creative Artists Agency.
Omnicom has other holdings in entertainment marketing. In April, it purchased Aaron Walton Entertainment and also owns Davie Brown Entertainment. WPP Group is also active, last year inking a joint venture with Shine Entertainment, an independent TV and film production company, to create Shine:M, which brings together Shine's talent with MindShare and the Media Edge.
Endeavor has been working to create deals linking advertisers with entertainment properties via an in-house marketing department, Endeavor Marketing Solutions. Last year, Endeavor partnered with Viacom's UPN for product integration packages, including working Omnicom's OMD USA clients into some UPN shows. Endeavor also brokered a product integration deal for Yum Brands' Taco Bell, Chrysler Group's Jeep and Nokia, with "Murder in Small Town X," a reality-based game show that aired on Fox last summer. Endeavor recently agreed to represent E! Networks for product integration packages.
Interpublic has quietly reorganized its sports and entertainment functions under one umbrella. Included in the Interpublic Sports & Entertainment Group unit are Octagon, the global sports-marketing agency; PMK/HBH, two public-relations firms that Interpublic merged last year; Bragman Nyman Cafarelli, a public relations outfit that combines consumer lifestyle, entertainment and sports public relations; and ad boutique Amster Yard.
"We are a $500 million revenue company right out of the box," said Mr. Dowley. "That's sizable."
In addition to Mr. Dowley, who reports directly to Interpublic Chairman-CEO John J. Dooner Jr., the unit's top executives include Chief Operating Officer Doug Augustine and Interpublic Sports and Entertainment Group Vice Chairmen, Pat Kingsley, CEO of PMK/HBH, and Michael Nyman, CEO of Bragman Nyman Cafarelli.