As the entertainment industry works to recover from the writers’ and actors’ strikes, talent agencies are expanding their business in brand representation.

While talent agencies aren’t new to the licensing business, they’re expanding to offset a downturn that is being felt amid a slowdown in TV and film production. That downturn has left actors, talent agents, and managers scrambling for work, with one New York talent agency reported business is down 50% from 2022.

Endeavor Group Holdings, which includes talent and brand rep firm IMG, reported a 2% increase in talent representation revenue in 2023 (reaching $1.54 billion), growth that was “adversely impacted” by the strikes, Chief Financial Officer Jason Lublin said.

Talent agencies are trying to extend their reach with social media influencers, musicians, broadcast journalists, and athletes to guard against further fluctuations in film and TV production. But they have also expanded their efforts to focus more aggressively on representing brands.

In May, IMG replaced The Joester Loria Group in representing McDonald’s as the fast food chain sought more of a global reach. And that was after IMG replaced Retail Monster for the Harlem Globetrotters and added the Claire’s retail chain and Knitwell Group’s Ann Taylor brand to its portfolio. IMG was acquired by William Morris Endeavor in 2013 and has since been rolled into Endeavor Group Holdings, which is in the process of being taken private by majority owner Silver Lake Partners.

Creative Artists Agency (CAA), meanwhile, sold a majority stake in the company to French billionaire Francois-Henri Pinault last fall, adding it to a Kering luxury brands business (including Gucci, Saint Laurant, and Christie’s Auction House). And that was a year after CAA bought back a majority stake in a brand management venture with Global Brands Group. CAA’s representation ranges from actor Tom Cruise to Jazwares’ Squishmallows.

These talent agencies are now competing with independent brand licensing agencies. Global Icons, for example, bested IMG in securing representation for Volkswagen earlier this year. A number of these brand licensing agencies have sharpened their focus on certain categories in order to create a point of difference. Striker Entertainment, for example, concentrates on film, TV, videogames, and publishing categories.

“The [talent] agencies are placing a greater emphasis on all areas of revenue generation, including licensing and consumer products due to the challenges the talent representation side of the business has been facing for the last several years, including Covid, strikes, fewer buyers, risk aversion, and a general reset in film and television production,” said Russell Binder, founding partner at Striker Entertainment. “The acquisition of IMG by WME was brilliant, and CAA’s organic growth and expansion has been undeniable, but I am confident that there is plenty of great content out there for agencies that hustle and are highly motivated to capture—and capitalize on—in service of the client’s ambitions.”

Those ambitions, however, sometimes must be tempered. A brand licensing agreement can take three years from signing before it starts churning out revenue, given contract negotiations, signing licensees, and manufacturing, industry executives said.

“Talent agencies are looking at revenue more closely than they have in the past and it is not as free flowing as it was a few years ago,” Global Icons CEO Jeff Lotman said. “Brand licensing is clearly an opportunity for them to grow but when you sign a client, it is years before you make money. It starts from zero and then you must get the deals and contracts up and get clients to make their decisions. It is a long process.”

Balancing these various needs and timelines means many agencies will opt to split their focus between the talent and brand licensing worlds. The Brand Liaison has represented wedding planner David Tutera, chef Robert Irvine, and actor Kevin James (all of whom also have talent agents) for brand licensing.

“You get $10 million to do a movie or you can make a few hundred thousand dollars in royalties, but in the case of the talent agents—where are they going to spend their time?” said Steven Heller, President of The Brand Liaison. “So, while talent agents like to include licensing in their agreements, unless you are in the top echelon there is still a need for a [brand] agent to focus on licensing.”