PARADIGM ON THE BRINK

Much buzz surrounds Paradigm after an abrupt round of firings—said to have affected 250 of the company’s 750 staffers—and 50% pay cuts for everyone else, announced via memo late Friday, 3/21.

Chief exec Sam Gores, inside sources say, neglected to talk to his 20 or so top people before issuing the salary-reduction memo.

We’re told that while management didn’t directly invoke the force majeure clause in employee contracts to justify slashing salaries, the memo danced all around the implications of that clause, which entitles the company to make the 50% cuts—but also enables the agents to become free agents after 90 days. Those close to the situation say the line in the sand, as far as the firings went, was that those spared are all significant potential commission earners. Paradigm’s artist roster includes Ed Sheeran, Coldplay, Billie Eilish and many more.

With music making up about 80% of the agency’s business, according to insiders, Paradigm could be facing a perfect storm: overleveraged and with enormous debt to service from its various acquisitions, including Coda, Windish and x-Ray—and anticipating no concert business whatsoever for at least several months. There’s talk that the agency could be confronting a financial crisis within 90 days.

What happens to the company’s top agents and their non-compete clauses? Will we see a new agency rise from the ashes, or old ones get rebooted? The fate of Tom Windish and Marty Diamond is the focus of myriad questions.

This isn’t the first time Gores’ insensitive tactics have raised flags; during the negotiation of the abortive $300m deal to be acquired by UTA, Gores needed to get all his agents’ deals closed, and his negotiations during that process were also to have been handled poorly.

A Pardigm rep declined to comment on this story.