UTA vs. Michael Kassan: A $125 Million Deal With an Advertising Powerhouse Blows Up

A pair of reputation-destroying lawsuits between UTA and its star rainmaker Michael Kassan burst into public view this week in an extraordinary airing of nasty gossip from a relationship that should have been a massive business win.

The legal salvos are damaging for both UTA CEO Jeremy Zimmer, who usually likes to keep his business private, and Kassan, the smooth-talking executive now engaged in vicious invective against his former friend.

“UTA’s claims are a desperate attack in response to Kassan resigning and then suing them,” Kassan attorney Sanford Michelman said in a statement to TheWrap. “It is not just hypocrisy, but an attempted diversion tactic by UTA to hide that they fraudulently induced Michael into agreeing to a transaction when Zimmer had no intention of honoring his word.”

But the allegations of misappropriated funds are very damaging, from overspending on private jets, to paying Kassan’s wife’s shopping bill to paying $60,000 for his chauffeur’s rent.

How did it get this bad? The deal struck in 2021 for $125 million made a lot of sense for both sides. Bringing a Madison Avenue powerhouse into a premium talent agency should have won huge advertising and brand windfalls.

“Who would have thought that Ben Affleck and Jennifer Lopez would appear in a Dunkin Donuts ad until this year?“ one industry source told TheWrap. “Look at the roster of Super Bowl ads, you have Beyoncé plugging Verizon, Michael Cera pushing CeraVe. Having an advertising super-broker in a big Hollywood agency is a great idea.”

Yet almost from the beginning, the deal began to sour. By 2022, the relationship between Zimmer and Kassan had become “difficult and untenable,” according to Kassan’s suit.

“It’s pretty clear that there was some kind of organ rejection,” one industry insider told TheWrap. Kassan’s unique style of doing business, which involved private planes and a lavish expense account to buy gifts for power players like Jeffrey Katzenberg and LionTree CEO Aryeh Bourkoff, clashed with the scrappier UTA business culture.

“Anybody who knows Michael, that’s how he operates,” the person close to Kassan said.

Now Kassan has told people close to him and his business that he wants to take MediaLink back — or at least go it alone again. But first he’ll have to battle UTA for control of the contracts and relationships he brought to the global agency. And the protracted legal wrangling promises to be destructive to both sides.

Duelling Lawsuits

UTA filed a civil suit against Kassan on Wednesday alleging “misappropriation of company funds.” The agency says Kassan “abused his title and authority” and had “run rampant with his business expense accounts — wasting millions of UTA’s dollars on his lavish personal lifestyle,” which included personal luxury travel for him and his family, a credit card for his wife to go shopping, and payments for a driver’s apartment and a personal housekeeper.

The suit came as Kassan filed his own legal action for breach of contract and fraud, saying he quit a day before UTA said it fired him on March 7 and that the agency had not kept its side of the deal terms when MediaLink was sold to UTA in 2021. In the suit, which is a demand for arbitration, he presented as evidence a resignation letter dated March 6.

Kassan has denied the claims of wasteful spending. A person close to him said “the allegations against him are insane.” He declined a $10 million severance offer from UTA in order to be able to compete with MediaLink, according to his lawsuit against UTA.

“We spent a week saying let’s do this quietly — we don’t want to ruin everyone’s reputation,” a senior executive at UTA told TheWrap. “[Kassan] chose to file this lawsuit. It’s so unfortunate.”

Now Kassan wants his company back, one industry insider told TheWrap. That begs the question: How valuable is MediaLink and its 150 employees without its founder and CEO, Kassan, “who is connected to everybody that matters,” as one industry insider told TheWrap.

From tax lawyer and chicken franchiser to powerhouse connector

Kassan began his career as a tax lawyer, practicing for over 10 years, before starting in the entertainment business as the head of International Video Entertainment, which is now part of Lionsgate.

In 1994, Kassan joined Initiative Media Worldwide as President/COO and Vice-Chairman. In 1997, Advertising Age named him one of the top media executives in the U.S.

Those early years were not without controversy. In 1995, a Superior Court judge in California found Kassan guilty of “grand theft by embezzlement” for transferring $240,000 from El Pollo Loco franchises in California to cash-starved chicken franchises in Las Vegas, recording the payments as loans on the books, as recounted in Ken Auletta’s book “Frenemies: The Epic Disruption of the Ad Business.”

His law firm terminated him and referred criminal charges to the police. The conviction was later reduced to a misdemeanor and expunged. Kassan appealed to the California Supreme Court to avoid losing his law license, which ruled in his favor and did not disbar him, according to an excerpt of the ruling included in Auletta’s book.

Michael Kassan at CES in Las Vegas in 2014
Michael Kassan at CES in Las Vegas in 2014 (Ethan Miller/Getty Images)

In 2003, Kassan founded MediaLink as an advertising, marketing, content, sales and service agency to link the industries closely through technology. The firm, initially based in New York, grew to advise all the top ad agencies and many powerful media executives. Kassan gained access to media moguls and formed close relationships with entertainment executives like Universal Music Group Chairman and CEO Lucian Grainge and iHeart Media co-founder Robert Pittman.

“Michael could set up meetings that could change people’s careers,” one insider said. ”He could broker multi-million deals, but he always did it with his modest and affable character. He’d make you feel like you were the talented one making the moves, while he was behind the scenes.”

Kassan used MediaLink to amass considerable influence in the advisory and connection trade between Madison Avenue, big business and big tech.

And he was raking in a fortune, media insiders said.

He began to build his presence at big industry events including the Cannes Lions Festival of Creativity in southern France, where he hosts his own week of programming and interviews and throws the most exclusive party of the week, at the Hotel du Cap-Eden-Roc. The party has featured performances from Mariah Carey, Chris Martin and Sting and is attended by a host of top advertising CEOs and Hollywood stars including Gwyneth Paltrow, Courtney Love and supermodel Naomi Campbell.

Kassan and MediaLink are also a big presence at the Consumer Electronics Show (CES) in Las Vegas every January, where he throws a lavish bash for the tech crowd and CEOs.

It’s pretty clear that there was some kind of organ rejection.

one industry insider on the UTA-Kassan merger

But he remains a family man and is often accompanied by his wife Ronnie and their three children.

MediaLink became so respected for its expertise, one industry insider explained, that clients frequently turned to MediaLink to conduct annual ad agency reviews — effectively acting as a referee making calls on whether a major company would retain the services of an ad agency or hire a different one.

In 2019, the American Advertising Federation inducted Kassan into its Hall of Fame, considered the highest honor in advertising. He delivered a rousing speech. “The future is something you have a hand in creating,” he said. “It favors the brave.”

UTA and a culture clash

Becoming wealthy building MediaLink, Kassan sold the company to British publishing powerhouse Ascential in 2017.

In 2021, UTA acquired MediaLink from Ascential, bringing Kassan’s global connections in music, entertainment, media, tech and advertising under the UTA roof, allowing the agency to better compete with rivals Endeavor and CAA in advising Fortune 500 CEOs on their advertising and media messaging.

“What seemed at first to be an amazing one-man band has become a first-class, global consulting firm with powerful colleagues, deep expertise and unparalleled relationships,” UTA CEO Jeremy Zimmer said in a press release announcing the deal. “This acquisition is a clear signal that UTA sees its work at the intersection of entertainment, brands and marketing as a core pillar of the future growth opportunities we are able to provide for our clients.”

Kassan’s reasons for agreeing to the deal are less clear. “He made so much money from MediaLink, some of his friends don’t understand the UTA deal — he really didn’t need it,” one insider told TheWrap.

From the outset Kassan was clear about what he required from UTA. When it purchased Medialink, the deal included an agreement to continue “past practices” set up between Ascential and MediaLink. He negotiated two major contract provisions, according to his suit against UTA. First, that he would oversee longterm strategy and day-to-day operations of UTA Marketing. And second, that UTA would recognize he would incur “special expenses” annually of $950,000 net after taxes, as he had while under Ascential.

Kassan says in his lawsuit that he nevertheless spent less than that allotted amount.

Along with a lucrative pay day, terms of which have not been disclosed, UTA also made Kassan a partner and allowed him to serve as CEO and chairman of MediaLink.

While the two sides disagree on many fundamental points, most everyone agrees on one thing: the situation is a lose-lose all around.

“This is really uncomfortable for clients,” the industry insider said. “Nobody wants to be in the middle of a divorce.” As strategic advisers, “You’re there to solve their headaches. They’re not supposed to be inside of your headache. That’s not how this game is supposed to work.”

Sharon Waxman contributed to this story.

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