While many have been talking about the consequences for the Artists that have lost all their revenue streams from touring, little had been said of the industry which helps them get shows. Now in an unprecedented move, Los Angeles-based talent agency Paradigm, which is regarded as one of the most successful live talent agencies, is preparing to lay off over 100 staff as the Coronavirus-triggered halt in live music activities continues to hurt the sector. Meanwhile, on the venue side, Hakkasan Group which runs Restaurants and Nightclubs across the globe is set to lay off more than 1,600 staff.
Paradigm To Loose A Seventh Of It’s Staff
Paradigm represent artists including Ed Sheeran (US), Shawn Mendes, Diplo and Coldplay. Outside of music, it also represents talent working across television, motion pictures, theatre, digital, book publishing, content finance, and brand partnerships. The company employs an estimated 700 people, and the news means they will see over a seventh of the firm’s workforce be handed redundancy.
According to Industry source Deadline, Paradigm’s CEO Sam Gores informed his staff of the expected lay-offs on Friday in what was reportedly an “emotional” call. The lay-offs are however said to only be “temporary” and while not 100% certain, he is reportedly hopeful that the employees will be able to re-apply for their positions once Paradigm is through the worst of the Coronavirus crisis.
As every Agent usually has a support staff including assistants and advancing teams, the actual number of lay-offs may end up “much higher” than the initial 100, and the move will ultimately affect every one of Paradigms employees. In these uncertain times, bigger fish in the Live Entertainment arena have been waiting for the moment to snap up companies that are cash-strapped, with rumors that the likes of CAA and UTA had already made approaches to purchase Paradigm for around $300m. However last month, Paradigm CEO Gore told staff in an internal note that his company was categorically “not for sale”.
“I want to address a recent press report suggesting the potential sale of Paradigm,” said Gores’ staff note in February. “Let me state emphatically – we are not for sale, nor are we selling the agency.”
WME Partners To Volunteer, Access To Equity Sale Delayed
In further evidence of COVID-19’s negative impact on the talent agent sector, WME held its own difficult call with partners of the company last week. The WME partners were expecting to be able to cash in 20% of their respective equity in the company on April 5, calculated on a $3.6bn valuation for the firm. However, this cash windfall has now been “pushed down the road indefinitely and the partners were also told it is likely they will be asked to volunteer to take pay cuts, until business rebounds”.
Earlier this month, both Paradigm and WME came together with other leaders of the live music space including Live Nation and AEG to agree that all major events in the US, and countries deemed level 3 by the Centers for Disease Control and Prevention (CDC), should be postponed through the end of March due to the Coronavirus outbreak.
Hakkasan Group Lay-Off More Than 1,600 Staff
Hakkasan Group which manages restaurants and clubs around the world and maintains a strong Las Vegas presence including Hakkasan Nightclub at MGM Grand and Omnia Nightclub at Caesars Palace, as well as Jewel Nightclub and Liquid Pool Lounge at Aria, Wet Republic Ultra Pool and Level Up at MGM Grand has this week laid off 1,600 employees, nearly its entire Las Vegas workforce reports Las Vegas Review Journal. The move means that only it’s senior management remains at the company under employment. Those laid off will receive two weeks’ pay, though the company did not offer the opportunity to collect any unused paid time off.
Speaking on the matter, Hakkasan Group issued a company-wide statement Monday morning: “The long-term impact of the COVID-19 virus on the travel, tourism, entertainment and hospitality industry remains unclear. Given these circumstances, we have taken decisive actions to preserve the long-term stability of our business that include conducting layoffs and furloughs due to the temporary suspension of our venue operations in the US and in many of our international locations.“
“We are doing all that we can to protect our team members where possible, all while remaining focused on getting our operations running again soon.”
“Every painful decision that has been made during this time has been made with an attempt to secure the long-term future of the business. All deliberations and conclusions have been made with a heavy heart, and regrettably with our understanding that our decision will have significant effects on you as an individual and your dependents,” Hakkasan Group Chief Financial Officer Michael Ryan-Southern’s memo read. “We sincerely hope that these impacts will be temporary. I would like to pass on my personal thanks for the dedication you have shown the business throughout your tenure and appreciate your understanding in these unprecedented times.”