Each month, I put together a “Six Degrees of Separation” feature for Buyouts Magazine. It typically connects a private equiteer with some celebrity who has a similar-sounding name. It’s the kind of seminal work that keeps Economist HR folks on speed dial.
Anyway, yesterday I mentioned to Buyouts editor David Toll that there was a private equity connection to Britney Spears’ disastrous performance at the MTV Video Music Awards. “How many degrees?” he asked. “Just one,” I replied. Here’s how it works:
Spears recently fired her longtime agent, and instead hired Jeff Kwatinetz, founder and CEO of The Firm Inc. If that particular talent agency sounds familiar, it’s because Thomas H. Lee Partners and Bain Capital acquired a minority stake back in 2004. In fact, THL’s Scott Sperling sits on the board of directors, alongside Kwatinetz (who serves as our single degree).
This was a tiny deal by THL and Bain standards, with Sperling emailing to say that his firm only put in $7 million. In fact, it seems to have been done, in part, to give THL and Bain a better strategic understanding of the entertainment management business — as both firms also hold significant stakes in Warner Music Group (then private, now public).
It might also soon become a busted deal, as entertainment press reports suggest that the Spears debacle has significantly damaged the reputation of both Kwatinetz and his agency.
As Roger Friedman of FoxNews.com writes:
Kwatinetz has already had a very bad year, nearly killing the career of original ‘American Idol’ star Kelly Clarkson by letting her — or rather encouraging her — to buck the advice of Clive Davis and release a terrible album against his wishes. What followed was a series of public embarrassments including the cancellation of Clarkson’s tour and her firing of Kwatinetz…. Now with Spears’ tanking live on international television, insiders will no doubt question Kwatinetz’s ability to manage anything… The Firm’s unraveling could turn out to be the biggest story of the year.