BREAKING… EXCLUSIVE… 3RD UPDATE: I’ve just learned from insiders that major investor Suhail Rizvi has made a decision regarding the future of ICM. And it’s timed to tonight’s ICM holiday party so the staff can enjoy themselves instead of worrying about the agency’s future. “Management wanted to close the deal today so its employees have a reason to celebrate as well as to send a message to the other agencies,” an insider says. Rizvi is ensuring that President Chris Silbermann will stay at the agency. Chairman/CEO Jeff Berg also will stay. Whether their titles will change remains to be seen. But the power inside the agency will definitely change as the management buyout takes shape: Silbermann and his TV camp will have more power. Berg and his motion picture division will have less. Let me emphasize that neither Silbermann nor Berg will characterize publicly the coming settlement the way I’m doing it here: this is my insiders’ assessment of the Rizvi deal. I understand that both Silbermann and Berg are pleased with the way Rizvi has put an end to what has been a destabilizing period for the agency. Other agencies aren’t so sure: “They have successfully shifted the conversation into a management buyout story, but the fundamental problem still persists. In other words, they may have stopped the implosion but they haven’t stopped the erosion. More agents and clients are going to be exiting,” one rival agency exec predicts.
ICM staff have not yet been informed what the future will hold After my story broke, news of the partnership was finally announced late this afternoon in a company-wide memo before tonight’s holiday party. Still to be determined is who will become partners because of the management buyout and who will be left out in the cold. “Everyone at ICM holding Class A and Class B stock are part of the management buyout. Not everyone who’s part of the management buyout will be offered to join the partnership,” an insider says. Silbermann said at a staff meeting yesterday merely that an “announcement” is coming in 2 or 3 days. My insiders say details of the Rizvi deal will be worked out between now and Christmas. Meanwhile Silbermann has been busy extending his TV camp’s contracts by 3 years. “There will be a restructuring of ICM,” one of my sources explains. “Even Jeff is saying this is a deal that could be good for everybody. But there’s now no doubt that Chris will have more power, and Jeff will have less power.” Insiders now expect Silbermann to steer ICM into more of a TV agency than a movie agency with the music and publishing departments remaining at same strength.
Both the Silbermann and Berg camps as well as Rizvi realized that a decision had to come sooner rather than later because of the hundreds of calls coming in daily to the agency from clients, managers, and lawyers worried about ICM imploding. According to my sources, Rizvi, whose Connecticut-based Rizvi Traverse Management owns 40% of ICM, this week explained in several phone calls to key senior agents what he was thinking. Rizvi was especially perturbed that the ICM schism was playing out in the media. (Deadline broke the story and has been first on every development. “Where is Deadline getting all this accurate information,” Rizvi asked the agents.) Rizvi explained in the phone calls that he had “reservations” about Silbermann because the ICM president was “out of control” and “immature”. But Rizvi went on to say, “If I go with Jeff, then who’s going to run TV?”
In recent days, Silbermann sensed that Rizvi was going to back his power play. Chris holed up in the 7th Floor conference room with ICM’s CFO, coming out only to tell his camp, “Suhail is going my way. I’ll be in charge.” As for Berg, Silbermann’s camp says Jeff wants to wrap his long agency tenure within 3 to 5 years and leave with dignity. But Berg’s camp says he has no imminent plans to exit the agency and expects to keep repping his clients for a long while.
Though the friction between the two men has been ongoing since April, ICM’s crisis began last month when Silbermann confided to senior staff that he was leaving with several key ICM execs and starting his own Hollywood TV agency.
In no time the buzz was all over the tenpercentery. That also meant it reached the ears of Rizvi Traverse Management which since 2005 has owned a sizeable stake in the full-service ICM. Immediately, Suhail Rizvi personally confronted Silbermann and asked if the ICM No. 2 exec was leaving or not. Silbermann denied everything, claiming that he’d never said it, that it was just a rumor, and that he was going nowhere — for now. But the fact is that, for months, my insiders say Chris Silbermann, the former Broder Webb Chervin Silbermann Agency partner turned Berg heir apparent, has been loudly and regularly threatening to leave ICM unless he got what he wanted. And what he wanted was the removal of his boss. And Berg, in turn, fought back. Both agency chiefs had been seeking their own financing to buy out the other and take over the agency and reduce Rizvi’s stake. The infighting tore apart ICM internally to the point where Silbermann regularly called secret meetings and pointedly didn’t invite Berg. While Berg called secret meetings with Rizvi and pointedly didn’t invite Silbermann. At one point, Silbermann became enveloped in a paranoid panic, convinced that his ouster from ICM was imminent and orchestrated by Berg and Rizvi when it wasn’t. In fact Berg tried repeatedly to find a way for them all to continue to work together and appealed to Rizvi to calm the situation. For a long while, Rizvi was unwilling to take sides in the endless series of disputes.
Clients especially hate hearing about discord inside their tenpercenteries. And rival agencies used the news of ICM’s internal strife to try to poach the most profitable talent. Berg has kept the battling with Silbermann behind closed doors. But Silbermann regularly voiced his own frustration and unhappiness with Berg to other ICM senior agents and also at investment banks and even in barrooms from Beverly Hills to Telluride to Toronto. ICM makes money, a lot of it, even though ICM’s movie department has struggled publicly for some time, and ICM’s TV department placed last behind WME, CAA, and UTA in the numbers of major agency packages on new series ordered by the broadcast networks for the 2011/2012 season. Interestingly, Silbermann at one point threatened to eliminate ICM’s movie lit department altogether. Which helps to explain the recent steady stream of ICM motion picture lit agents exiting to UTA. There was even an idea at one point taking shape within the Berg camp for ICM to merge with United Talent and bring in that agency’s managers to stop the warring with Silbermann. If that happened, the thought was to make UTA co-owner Jeremy Zimmer vice-chairman of ICM. But UTA has talked and talked to a litany of potential agency suitors yet refuses to get married to anyone for now. Meanwhile, Silbermann was so infuriated with this attempt to dilute his power at ICM that he vowed to stop any merger from ever becoming a reality. And, to shore up what he worried was a weakening position, Silbermann managed to bring into his camp longtime Berg confidant Rick Levy, ICM’s Chief Business Development Officer & General Counsel.
Last week, Silbermann and Levy took the red-eye from LA and arrived in New York to confront Rizvi and demand a management buyout as soon as possible and not wait until Christmas to make a decision. Silbermann and Levy also demanded an ICM board meeting. They were told to put their plan in writing. What followed was an informal board conversation described to me as “so early and fractious and ill-informed” that participants didn’t want to call it a board meeting. Since then Silbermann has been firming up the buyout details.
But what was really startling was Silbermann’s decision to involve none other than family friend Michael Ovitz in his plans to take control of the agency. When I first heard about this several months ago, I asked Silbermann and Ovitz separately if they were speaking, planning, or at all involved together in ICM activities. Both Silbermann and Ovitz privately denied it. But Silbermann has been talking almost daily to Ovitz, as often as four times a day recently. Insiders told me that Silbermann went to Ovitz for help in obtaining the necessary financial backing to accomplish the management buyout. I’m told that Ovitz has not been interested in putting his own money into the agency at this point, but tried to introduce Silbermann to various financial backers. Ovitz remains one of Hollywood’s most controversial and disliked business personalities ever to achieve success in this town, and Hollywood responded with disdain to news of Ovitz’s maneuvering behind Silbermann’s power play.
ICM has had an up and down trajectory since it was formed in 1975 when Marvin Josephson’s IFA bought out Freddie Fields’ and David Begelman’s CMA. It’s also been a notoriously impossible place to manage. Flush with the Rizvi Traverse management cash infusion, Berg engulfed the Broder tenpercentery, then the king of the small tube representation for seemingly eons. That’s when Berg and Broder’s Silbermann became close. 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. For a long while, Berg and Silbermann worked well together, even when Silbermann showed eagerness to flex his new muscle as president of the combined agency not just inside but also outside ICM. Suddenly rumors began to circulate that Berg was retiring when he wasn’t. My insiders date the start of the two men’s friction to when Silbermann sought to help rebuild ICM’s dissolving motion picture business, especially by having regular contact with its higher profile movie actors and actresses and trying to sign more. In addition to the agency’s in-house publicity, Silbermann hired an outside flackery tasked with giving him a higher profile. (They recently resigned the account.) Rumors ramped up that ICM was at war with Rizvi, and then that Silbermann was at war with both Rizvi and Berg. Now hopefully the battling will stop.