ITA fallout fuels fires of mergers

The fallout from the breakup of 4-year-old InterTalent Agency reverberated through Hollywood yesterday with further consolidation on the agency front expected, possibly as early as this week.

Most notably, there is heated speculation among knowledgeable sources that the venerable William Morris Agency has aggressively escalated efforts to acquire mid-sized, 250-employee Triad Artists.

Responding to the heightened rumors, William Morris prexy Jerry Katzman reiterated yesterday what he had said earlier this week (Daily Variety, Oct. 13 ): “We’re talking to everybody and anything is a possibility.”

Triad officials did not return repeated calls.

Other developments to surface yesterday in the wake of ITA topper Bill Block’s plans to rejoin International Creative Management (Daily Variety, Oct. 13) included confirmation that three of Block’s former partners had also ankled and had clinched a deal to become partners at rival United Talent Agency. Three other ITA talent agents are also going to UTA. (See accompanying story.)

While the former ITA partners–Judy Hofflund, J.J. Harris and David Schiff–will be moving the agency’s talent division to UTA, their remaining partners David Greenblatt and Mark Rosen reportedly are negotiating deals to join Block at ICM.

At press time, neither Block nor any other ITA agent had finalized deals, but they were expected imminently.

Despite widespread rumors to the contrary, ICM insiders insist that Block will not assume the presidency of the agency, a post held by Jim Wiatt, but will get a yet-to-be determined title giving him a broad mandate to run the day-to-day operations of ICM in Los Angeles. Wiatt is expected to remain prexy/chief operating officer and keep his more far-reaching duties overseeing ICM’s worldwide activities. Jeff Berg’s status as chairman also is expected to stay status quo.

Like the more than 25 agents who have stock in ICM, Block would be a shareholder in the agency.

The expected addition of Block throws into question his role vis-a-vis ICM vice chairman Guy McElwaine, the senior member of the motion picture team, whose purview is putting together feature film packages.

The addition of Block and potentially more ITA agents to ICM also raises questions about how some top ITA talent may feel about competing with ICM’s more high-powered list of clients.

Entertainment attorney Peter Dekom contends that the addition of manpower and talent to one agency can have good and bad implications.

“The more people you have of a high caliber within a structure, the more alternatives you have for packaging, the more options you have to explore. The negative is that some clients can get lost in the mix.”

Given the dissolution of ITA and rumors of other possible mergers, Dekom is certain the industry will see more contraction on the agency side.

“I think the name of the game for the ’90s, across the board, is consolidation. There’s a lot of pressure on agencies to pool their resources and to make larger deals to weather the current economic storm–consolidation is absolutely the wave of the future, it’s a survival mechanism,” Dekom said.

He also forecasts that the smaller agencies are “going to try to merge and grow.”

Joe Roth, chairman of 20th Century Fox Film Corp., said, “If it becomes a bottom-line fact that small agencies can’t compete and they get absorbed by the two bigger agencies, and if the Morris office makes an aggressive move, then it would have some implications on the movie side.”

Roth noted that while he is “not concerned that this is happening today, if in fact in a year and a half you end up with just two major players on the agency side–two incredibly powerful agencies–not only would they be in all-out warfare with each other, the studio becomes victim in that and they’d have a more difficult time.”

Attorney David Colden suggested that the disappearance of ITA is “somewhat of a sad day in the business.” Consolidation of power, he predicts, “ultimately will have a negative impact on our business. It precludes the ability for new young talent to have means of entree into the industry. When you have lots of little entities, there’s a greater opportunity for new young blood to enter the business.”

Despite some further consolidation on the horizon, there are some heads of smaller agencies who don’t have any intention of changing their businesses in the foreseeable future. Susan Smith said in 23 years of running her Susan Smith and Associates agency, “I think I’ve passed up 38 different offers to merge. … I think if I’ve done it this way for so long, why change?”

Joan Scott, who heads the 22-year-old Writers & Artists agency, says while her operation has no merger plans, “If there are some wonderful agents out there that we’d think would make a nice addition, we’d certainly be open to talking to them.”

Marty Klein, president of the 32-year-old APA, said of ITA: “They were a formidable force and now there’s an opportunity for mid-sized agencies to have one less competitor to worry about.”

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