THE HOLLYWOOD REPORTER 36 SEPTEMBER 4, 2019
BERGER,^ OWENS:^ COURTESYOF
ROGERS^ &
COWA
N.Illustrations by Greg KletselAnalysisThe Business
O
n the morning of Dec. 9, Alan Nierob,
then the president of public relations
agency Rogers & Cowan’s entertain-
ment division, left his Beverly Hills home
and strolled the few hundred yards to the
Montage hotel. This was business as usual for
the veteran publicist, a quick trip to do some
hand-holding at a movie junket for Universal’s
Wel come to Mar wen, directed by client
Robert Zemeckis.
Nierob wasn’t the only publicist there. In the
green room, he started chatting with Cindi
Berger, the chairman and CEO of PMK•BNC, a
PR company almost exactly the same size as
Rogers & Cowan and linked to it through their
joint owner, Interpublic Group. Small talk
gave way to weightier matters about how to
compete in a consolidating business, eventu-
ally leading to further meetings among the
companies’ leaders, all centered around a new
proposal: What if the two firms merged?
The July 30 announcement that these
entertainment industry pillars would become
a single, yet-to-be-named, 385-person-strong
entity — the biggest Hollywood PR firmThe End of the Midsized Company
As a Disney-dominated landscape pressures traditional media giants (like ViacomCBS) to scale up in order to survive, the war
of attrition may further divide Hollywood into very large and very small firms: ‘The ones in the middle are getting squeezed’— was the latest volley in a veritable war of
attrition that film and TV businesses have
been waging as they seek to build scale to sur-
vive in an era dominated by ever-larger tech
and media giants.
Since the Walt Disney Co. began the mod-
ern-day charge with its acquisitions of Pixar,
Marvel, Lucasfilm and most of Fox, the notion
that “bigger is better” has replaced the once-
fashionable conceit that “small is beautiful,”
articulated in the best-selling 1973 book ofthat name by economist E.F. Schumacher.
“Even today,” Schumacher wrote, “we are
generally told that gigantic organizations
are inescapably necessary; but when we look
closely we can notice that as soon as great size
has been created there is often a strenuous
attempt to attain smallness within bigness.”
Because of this, Schumacher warned of the
intoxication of “gigantism.”
Now gigantism is penetrating
midsized companies and massive
ones alike, organizations with
only a few hundred staffers as
well as mega-corporations with
thousands. This summer alone,
Hasbro snapped up indie studio
Entertainment One for $4 billion,
CBS and Viacom finally agreed
to combine to form an entity
valued at $31 billion, and United
Talent Agency tried but failed to acquire rival
Paradigm Talent Agency. The middle ground
is receding, giving way to two extremes: the
very large and the very small.
“The entertainment world is similar to the
rest of the world,” says PMK/Rogers & Cowan
CEO Mark Owens. “On one hand there’s the
need for mass and scale, and then there are
smaller, very bespoke agencies that represent
a few clients [for whom they] do absolutely
everything. The ones in the middle are
getting squeezed.”
Few business experts these days advocate
staying midsized, and many also are skepti-
cal of the benefits of being small. RemainingM&A | STEPHEN GALLOWAY
STEPHEN GALLOWAY is executive editor at
The Hollywood Reporter.BergerOwens6K2012 2013 2014 2015 2016 2017 2018 20198K12K
10K14K16KU.S. merger and acquisition activity has
boomed across all sectors in recent years
TOTAL DEALSM&A Frenzy
Source: Institute of Mergers, Acquisitions and Alliances10.9K12.3K 12.9K13.4K15.6K 14.9K7.1K10.6KMedia, entertainment and telecom M&A
activity picked up in second quarter 2019
MEDIA DEALSHollywood Dealmaking
$10BQ1 Q2$20B$40B$30B$6.7B$36.6BSource: PricewaterhouseCoopers; volume equals number of different acquisitions announced50Q1 Q2100200150155 159