Back around Christmas 2005, I was tipped that ICM’s Jeff Berg wanted to close two big deals for boutique agencies. Flush with his month-old $100 million private equity infusion from Rizvi Traverse Management, the agency chief was looking closely at Broder Webb Chervin Silbermann Agency as well as Endeavor Agency. Then, there followed a waiting game. Rumors were rampant. But the reality was that these deals aren’t done overnight: like everything in Hollywood that involves ego and money, they’re complicated because they combine different agency cultures as well as partners and personnel. (Who else remembers back to 1992 when William Morris acquired Triad? The two agencies had been talking for 17 months; and, even when those chats became very serious, the deal points took five months.) Also on Berg’s mind was the successorship issue; these days, every head of a company has to have an eye on an heir apparent, or two or three. Demonstrating just how clueless the Hollywood trades really are, Variety even ran a June 22nd hit story during the waiting period asking, “Has ICM squandered the momentum that could have come with a restructuring?” Variety didn’t know that, at that very moment the story was published, ICM and Broder already had a signed letter of intent in their hands. (More on this later…) The deal took four intensive months to get done: it was code-named, it was stealthy — and it involved Camp Allen’s Duck Pond.
For 10 years off and on, Berg (left, photo credit LA Times) and Broder had danced that slow minuet that accompanies any agency talk of merging. One was in charge of a large agency that had hit tough times: movie agents and clients were being poached, and the TV division was not keeping up with the formidable competition. Broder had been king of the small tube representation for seemingly eons; his was the Tiffany of TV agencies, a true cash cow. The two men, after all, served together on the board of the Association of Talent Agencies’s Strategic Planning Committee and had huddled together over the many regulatory, labor and guild matters affecting them. And Broder, besides, was an ICM veteran, as well as Elliot Webb who’d both worked with Berg back in the 1970s. In 2005, Berg began talking more about merging with Broder’s Chris Silbermann. After all, they, too, had a lot in common: they were both Berkeley grads, both English majors and both active alums. Silbermann was very involved with the College of Letters and Sciences board which Berg had founded and ran in the late 1980s. The connections made the deal “easier. It cut through volumes,” I’m told. “We didn’t have to go through any posturing.”
But first Berg had to pin down his war chest before his talks with Broder (left) could proceed further. Once the $100 mil was clinched, the negotiations with Silbermann (left) accelerated over four months. The deal-in-the-works was code-named “Project Beta” and extreme security measures were taken to prevent leaks. Most of the sessions were held in a private dining room of a still secret location. The negotiators were never in each others’ offices. And even the phone traffic was run outside the agencies through lawyers and bankers. One thing was clear from the outset: this wasn’t going to be a cheap deal. And the Broder agency wasn’t sure it wanted to give up its independence and become part of a large organization’s culture and anatomy. But both sides eventually recognized the urgency to put the companies together. “It’s not so much an acquisition, but a response to a consolidating market,” I’m told. “But this story is about growth, not about consolidation.” (More on this later…)
The final negotiations over operational issues took place between Berg and Silbermann by the Duck Pond during the mid-July Camp Allen investment confab in Sun Valley, Idaho. It happened that host Allen & Co. was brokering the deal, and managing director Tom Kuhn was using the conference to help Berg and Silbermann nail down finalities. In fact, the three men were sitting by the Duck Pond having lunch one day during the conference when CAA president Richard Lovett spied the trio from the other side. “Uh-oh, we’re going to blow our cover,” worried Silbermann. “Let’s invite him over to join us,” Berg suggested. So Lovett wound up being the fourth for lunch, and never knew the deal was taking place. More suspicious was William Morris CEO Jim Wiatt, who saw the talking heads throughout the confab and thought something might be up. He began calling Silbermann over the past two weeks, asking to get together.
But it was too late. The deal was done yesterday, with all parties signing the papers at the offices of the law firm Irell & Manella in Century City. That’s where the new ICM agency will transfer into 100,000 square feet — 25,000 more than ICM presently occupies. With 27-some agents coming from Broder, the space will be welcome. But, unfortunately, several ICM’ers won’t be making the move: Scott Arnovitz, Nancy Etz, Tanya Lopez, Steve Simons, Babbette Perry, Stacey Lubliner, Jill Gillette, Patty Detroit, and Nancy Josephson, ICM’s co-president who was pushed out during the merger, I’m told. That’s sad; she was a continuation of ICM history as the daughter of the founder and one-time owner Marvin Josephson. She was the first female president of a major talent agency when she was named in 1998. Josephson made a lot of money for the agency as the rep for the ICM package Friends and its exec producers and her discoveries Marta Kaufman, Kevin Bright, and David Crane. But with a piece of ICM prior to the equity investment, she made money in November. So, in Hollywood, that’s what passes for loss-of-job condolences.
Finally, the very fact that ICM and Broder still want to keep the name of their meeting place secret signals strongly that the new combined agency isn’t done with its merger-and-acquisition plans. “We’re gonna want to use that venue some more.”