Wall Street Sees Hollywood as a Gateway to Sports and Entertainment Two years ago, Egon Durban, a senior private equity executive, floated an idea with the co-chief executives of the William Morris Endeavor talent agency: Had they considered making a run at IMG, a 53-year-old peer with complementary businesses? A year later, Mr. Durban's firm, Silver Lake Partners, bought a 31 percent stake in William Morris Endeavor, and a merger of the two agencies was still at the top of his mind. On Wednesday, Silver Lake and William Morris Endeavor made good on that aim, buying IMG for about $2.4 billion and disrupting the longstanding balance of power in Hollywood. But the deal also reflects a shift in how Wall Street has paired up with Hollywood, especially the traditionally clubby world of agencies. While previous generations of financiers have viewed the talent business as a vanity project, newer deals show that investors are set on remaking the industry, expanding its size and scope. Three years ago, Creative Artists Agency, the traditional powerhouse in the industry, sold a 35 percent stake to TPG Capital after talking with a number of prospective backers. As part of the deal, the two sides collaborated on efforts to invest in sports and digital entertainment. Last year, William Morris Endeavor followed with its tie-up with Silver Lake. The union seemed unusual to some: The investment firm is known best for its technology deals like the takeovers of Skype and Dell. But Mr. Durban believed that the agency and its constellation of clients - a roster that includes Denzel Washington, Ben Affleck and Steven Spielberg - could serve as an important gateway to digital content. While many have questioned whether simply being large would help an agency, William Morris Endeavor and Silver Lake have argued that scale, coupled with a push into advertising, Internet media and other technologies, was invaluable. From the beginning, Silver Lake was determined to invest heavily in its new partner, which it saw as an ideal vehicle to buy into advertising, sports and other entertainment businesses, according to people briefed on the matter. Mr. Durban has praised William Morris Endeavor's co-chief executives, Ari Emanuel and Patrick Whitesell, particularly in their moves to reshape Hollywood's agency pecking order. But he has also aggressively pushed them to make acquisitions. Adding IMG, whose strengths lie in representing sports talent, promoting fashion shows and managing musical talent like Justin Timberlake and Taylor Swift, would funnel more content through William Morris Endeavor. "It's a beachfront property asset," said one person close to the transaction, who was not authorized to speak publicly about the matter. Such an approach sometimes ran counter to how investors have treated talent agencies. Rizvi Traverse, a Michigan-based private equity firm, bought a stake in International Creative Management in 2005. But executives at the agency felt squeezed by Rizvi's focus on the bottom line, creating tension between the two companies, according to people briefed on the situation. Ultimately, I.C.M. executives bought out both Rizvi and Jeffrey Berg, the agency's chairman and the man who brought in the private equity firm in the first place. The monthslong auction of IMG - spurred by the death of its owner, the leveraged buyout mogul Theodore J. Forstmann - drew in a slew of private equity firms. Among them were Kohlberg Kravis Roberts, the Blackstone Group and Bain Capital, as well as sovereign wealth funds eager to own such a trophy. But the buyout firms that made it to the final round had allied themselves with other agencies: Silver Lake with William Morris Endeavor; CVC Capital with Peter Chernin, a former top executive at the News Corporation; and I.C.M., this time allied with the Carlyle Group. Despite the attractiveness of IMG, a number of suitors scoffed at paying anywhere near the more than $2.5 billion that bankers had sought. Several thought the agency's business was performing worse than expected. And one executive at a rival agency, who was not authorized to speak publicly about a competitor, said IMG's core sports business had suffered setbacks. Colleges were pushing back on longstanding pricing models, while star athletes like Tiger Woods and Roger Federer had left. CVC and Carlyle each ultimately bid less than $2 billion, people briefed on the auction have said. But Silver Lake was undeterred, with Mr. Durban repeatedly arguing that the firm's investment proposition was built on making acquisitions. And for William Morris Endeavor, no other takeover target could provide the kind of size, scope and scale that IMG would. Now that the two have prevailed, William Morris Endeavor and Silver Lake will get to work bringing their newest acquisition into the fold. For now, IMG will be run separately, though it will be eventually be merged in some fashion. Rival Hollywood and Wall Street executives have speculated that a merger could provide William Morris Endeavor with the heft it needs to eventually go public. But Silver Lake invested in the agency with a time horizon of more than five years and is not yet thinking about an exit strategy, according to a person briefed on the firm's plans. Ken Belson contributed reporting.