The so-called “SPAC”, raising $500 million in financing on the American Stock Exchange for acquisitions in the entertainment/media/publishing arenas, is a Special Purpose Acquisition Corporation formed under Delaware’s liberal corporate laws on October 24, 2007 and filed with the SEC. (SPACs are investment vehicles with a whole host of SEC requirements attached to them. wma.jpgThey’re blank-check companies that have no operations but that go public with the intention of merging with or acquiring a company with the proceeds of an IPO.) Interestingly, some weeks ago, a spokesman for the William Morris Agency denied to me the tenpercentery was involved. When I said today I had the SEC paperwork in hand, the mouthpiece did an about-face and told me, “We’re not allowed to talk about it. We’re under a quiet period with the SEC.”

wiatt.jpgSPACs have all sorts of rules about targets and time periods, so this SPAC has to move pretty fast. But rival tenpercenteries are pointing out to me all the potential hazard for conflicts of interest — whether WMA is an actual financial partner and/or bringing in potential investors and/or ID’ing merger or acquisition targets. So what’s behind this? Here’s a clue: Jim Wiatt, since becoming the agency’s largest shareholder, has increasingly referred to Morris as an entertainment company rather than a personal representation business, something at odds with what many on the agency’s board believe. (The agency has been suffering some client losses. And it’s by no means the TV packaging powerhouse in scripted series it once was…) Meanwhile, I’ve always been tickled by how, when Wiatt talks to his Hollywood pals, he always bemoans not having a company jet.

Sources also tell me that Morris is about to sell two valuable pieces of real estate.

Businessmen Eric Watson and Jonathan Ledecky are behind this SPAC as well as Citibank Global Markets Inc. So is the William Morris Agency as well as John Mass, an executive vice president in the agency’s acquisitions department who is also a director of the SPAC. Morris itself is a stockholder of the enterprise. Other directors of the company include actor/producer Ashton Kutcher, ESPN sportscaster Jim Gray, and Ed Mathias, the media and entertainment guy at Carlyle Group.

“We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination with a currently unidentified operating business or several operating businesses in the entertainment, media and/or publishing industry, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not, nor has anyone on our behalf (including William Morris Agency, LLC), contacted or been contacted by any potential target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. Additionally, we have neither engaged nor retained any agent or other representative, including William Morris Agency, LLC, to conduct any research or take any steps to identify, locate or contact any suitable acquisition candidate…

“…We believe we will benefit from the broad range of business relationships, industry expertise and market insight enjoyed by William Morris as well as those of John M. Mass, a member of William Morris and a member of our board of directors. William Morris Agency, LLC has entered into a right of first review agreement with us, in which William Morris Agency, LLC has agreed to present, and to allow Mr. Mass to present, any suitable business opportunity to us prior to presenting it to any other entity, including William Morris, subject to certain exceptions.”

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