Jeff Berg To Open New Talent Agency Resolution

EXCLUSIVE UPDATE 7 PM: I can now reveal the identity of Jeff Berg’s principal investor and financial partner. His name is Jahm Najafi, a former Salomon Bros banker active in real estate and private equity with investments in diverse companies and brands. According to news reports, he isn’t in the deal-making stratosphere, but the CEO of Phoenix-based private equity firm Najafi Companies is in the mix of many high-profile deals. MORE BELOW

EXCLUSIVE 1:54 PM: Inside 1801 Century Park East on the entire 23rd floor, Jeff Berg‘s new full-service Resolution agency capitalized with about $200 million is opening its doors on Monday. The offices are still being painted and the bathrooms are a work in progress. But the longtime ICM Chairman at age 65 just moved into the new space this weekend now that the phones and Internet are up and running and the conference room is finished. Today he’s calling clients. He’s already more than a week ahead of schedule. Over the next six months, Hollywood and New York and Nashville will witness a series of announcements about agents being hired from the top tenpercenteries and midlevel executives being culled from the Industry. Most are still in secret negotiations on Resolution contracts, others are signing non-disclosure agreements, several are in the process of being raided, and still more are daily dialing Berg to inquire about coming over. Their own companies don’t know they’re even contemplating departures. There hasn’t been a major full-service agency start-up like this since Endeavor was formed in 1995 by four former ICM agents who left Berg et al in a midnight stealth. Resolution will keep making headlines as Berg slowly builds his film/TV/talent/literary/music/publishing/digital tenpercentery to an anticipated staffing level of 35 agents plus support staff in LA, 25 agents in NYC, and 10 agents in Nashville. He’s still not settled on his Manhattan office, looking at a variety of spaces in Midtown, Downtown, Chelsea. “He’ll figure that out,” an insider tells me.

It only took him 8-to-10 weeks to set up Resolution doing it primarily by mobile phone, a gmail account, and temporary digs. Berg already has Resolution’s executive infrastructure put together: his COO will be his new partner, former music agent Jeff Franklin, CFO will be former William Morris Agency Finance Director Laura Li, and chief counsel will be former Universal Business Affairs’ Jonathan Gumpert (father of Andrew Gumpert who runs business affairs at Sony Pictures). Still to come is a “people person” senior agent who will function as the catalyst to help keep morale at a high level — because no one knows better than Iceberg what his reputation was and still is. I understand that Berg and Franklin went far with a top CAA senior agent who ultimately stayed put.

Already Resolution has booked 3 lucrative concert tours for this summer. Lit agents have been hired, including Rich Green and Shari Smiley from CAA and Abram Nalibotsky from Gersh, while Paradise Artists’ Steve Schenck will run the music division, with former ICM agent Terry Rhodes part of that music mix. Big names from CAA, UTA, ICM are in play or have been. But Berg is proceeding slowly when it comes to hiring, not wanting to “throw people at offices” and not looking to “have a 1,000 person firm”, in the words of insiders. Instead, he intends to run a leaner operation than his soon-to-be competitors.

Rumors are rampant who’s coming and who’s not. There also are many big deals afoot. I hear Berg will issue some kind of statement on Monday. [2ND UPDATE: The principal investor who’s capitalizing Resolution to the tune of “more or less $200M” is Najafi. The name is not well-known to Hollywood. But he bought the direct-marketing business Direct Group from German book publisher Bertelsmann AG. (Direct Group owns the Book-of-the-Month Club, Columbia House and record club BMG.) Also he’s invested in Cinram which is the largest video duplicators, SkyMall in-flight catalogue and ecommerce sitel, as well as the Phoenix Suns basketball team. Najafi Companies makes “highly selective investments up to $1 billion in transaction value…and often in industries out of popular favor.” Unlike most private equity firms, Najafi Companies doesn’t raise money from outside investors to do deals. It also tends to hold onto investments for 5 to 10 years, longer than typical in the quick-flip business. This Harvard MBA-trained Iranian American did his undergraduate at Berkeley which is Berg’s alma mater.]

The capital will enable Berg to embark on a “build and buy” strategy which includes purchasing other agencies. Also in his wheelhouse, Berg is contemplating a separate operation that could do gap financing along the same lines as Media Rights Capital which after some struggles just scored big with Seth MacFarlane’s Ted. All this secrecy should come as no surprise. I’ve written previously about how Berg growing up shocked his family with the news that he wanted to join the CIA. Instead, he’s spent a lifetime as a Hollywood agent. And now, after exiting ICM on October 26th following a bruising management buyout battle with Chris Silbermann and Rick Levy refereed by investor Rizvi Traverse, Berg is building his own tenpercentery from scratch.

Insiders tell me that Berg appears energized by Resolution. “This is an exciting moment for my life and career. I spent a lot of time thinking this through,” Berg is telling prospective agents. And then he describes how he went on a ‘listening tour’ throughout Hollywood after his ICM departure. According to sources, Berg says: “I spent a lot of time listening to execs, agents, producers, clients. And the overwhelming sense I got was there’s a real opportunity to do something new in the agency business. As the major firms have grown larger, they also have become more distant. The way to counter that is less overhead, greater focus, more efficiency. I’m not looking to create ICM 2.0.”

Resolution might not have been possible if one of Berg’s daughters had not made a miraculous recovery from a brain hemorrhage. That year-long family struggle and ICM’s two-year internal fighting occupied his heart and his head. Now that daughter is starting her own company just like Dad. I’ve learned that, amazingly, Berg has no non-compete or non-solicitation with ICM because of the way they in the end threw him out. “I can’t be angry,” Berg tells prospective agents. “I was given a visa to go do my thing.” I can’t wait to see how the agency landscape changes this year as a result.