Public CAA-ICM feud is just tip of the Berg

The public feud between ICM and CAA continues to heat up.

CAA will meet today with the three main Hollywood guilds, who summoned agency troopers to explain their relationship with French lender Credit Lyonnais.

While ICM chairman Jeff Berg continues to publicly air his gripes, one smaller agency has demanded an investigation into possible antitrust violations and filed a complaint letter with the Federal Trade Commission.

Other agencies are understood to be pondering whether to submit projects to MGM until its relationship with CAA and the bank has been clarified. They fear that rival CAA will end up somehow reviewing their submissions to MGM.

CAA spokeswoman Anna Perez said late last week the CAA/CL relationship “will be clarified Monday” in the meeting with the writers, directors and actors guilds and that this should quash fears.

The usually guarded Berg has made an about-face by publicly blasting the new business relationship his nemesis Michael Ovitz has forged with CL.

In his feud with CAA, the ICM topper is challenging how far the rival agency’s consultancy role to CL extends, since the bank currently owns MGM, a major, and controls other troubled Hollywood independents (like Epic). At the heart of Berg’s beef is the question of whether the relationship violates federal antitrust regulations under Title 15 of the U.S. Code.

Title 15 specifically focuses on antitrust issues. It states that a person or entity will not act in such a way that is monopolistic or constitutes a restraint of trade.

This was the title used in 1962 to force MCA by a consent decree to divest its agency business because its dual role as a talent agency and a production/distribution company was deemed monopolistic.

While Berg has yet to file an official complaint with state or federal authorities, a Beverly Hills boutique agency has picked up the gauntlet.

In a letter sent to FTC investigator John Jacobs April 7 and obtained by Daily Variety, the unidentified talent agency wrote:

“In accordance with our discussions we wish to lodge a formal complaint under Title 15 of the U.S. Code in regard to actions of the Creative Artists Agency which are in violation of this law and the relevant FTC rules and regulations.

“We believe that Creative Artists Agency has violated the law by rendering services of an advisory nature to Credit Lyonnais and its subsidiaries and affiliates who are engaged in the entertainment industry, including the ownership or management of at least one major motion picture studio. By acting in such a capacity, Creative Artists Agency will engage in a substantial restraint of trade and will be able to further increase their monopolistic actions in the entertainment industry.

“By pursuing an interlocking network of formal and informal alliances, Creative Artists Agency has engaged in an unlawful restraint of trade in that they prevent independent agencies (from) fairly competing for available business. Their ‘consulting’ and ‘advisory’ roles with major talent users allows them an unfair, unethical and (unlawful) advantage in our industry.”

FTC investigator Jacobs could not be reached for comment late Friday. No one at the FTC would confirm or deny receipt of the letter Friday.

CAA’s Perez would not respond to the letter without knowledge of its author.

Although Berg has not voiced his concerns about a possible antitrust violation in writing, he has aired his gripes through numerous national and international media outlets.

He has even hired a corporate communications firm — Sitrick & Co., which specializes in crisis PR. Sitrick also handles such clients as former MGM owner Kirk Kerkorian, currently embroiled in litigation with CL, and has helped French parliamentarian Francois D’Aubert promote his anti-CL book, “Dirty Money,” in Paris.

Some industry insiders suggest that Berg’s media blitz may be personally motivated as a way to topple Ovitz and his agency. Berg is commonly perceived as the No. 2 agent in Hollywood, behind Ovitz. One source maintained, “Jeff is getting fed up with Ovitz always getting the attention.”

Berg backed that perception.

“As a leader in our industry, I feel I have a responsibility to bring this matter out into the open,” he said. “Given the visibility of our industry and the extremely high profile Mike has taken for himself, this issue has attracted a lot of media interest.

“Mike, however, has yet to respond,” he continued. “The fact that the guilds have summoned CAA to a meeting to explain what they are doing is, I believe, a step in the right direction.”

Still, Berg argued that this is not personally aimed at Ovitz.

“This is a professional response to a trade issue, not a personal one,” he said. “I think Mike is one of the smartest guys in the business and he has a great company.”

Berg dismissed Ovitz’s latest public appearances as a “media campaign” adding , this “is just plain nonsense and yet another attempt by CAA to avoid having to address the issues. I believe Mike has crossed the line and I’m calling him on it.”

William Morris Agency prexy Jerry Katzman, declining to second-guess Berg’s motivation, said: “I don’t know if he has any secondary issues other than what he’s saying. I can’t comment as to whether this is a personal vendetta or if there’s more than meets the eye. Only Jeff knows that.

Nonetheless, Katzman said, “Personally, I wish this was not voiced and tried in the press but was discussed amongst all of us.”

So far, Berg has stumped his cause on such major broadcast outlets as CNN’s “Showbiz Report” and E! TV.

The French publication Les Echoes, which has done extensive reporting on the Kerkorian litigation with CL as well as the bank’s entertainment lending practices, has also jumped on the story.

Berg’s campaign was triggered by the March 25 announcement of CAA’s new alliance with CL, which has been plagued by more than $ 2 billion in loans to troubled entertainment clients. CAA has defined its role as “a consultant on matters regarding (CL’s) worldwide entertainment industry activities … regarding its current and future entertainment portfolio.”

Berg stressed that going public with his concerns was to “flush out” the nature and implications of that relationship. “This was a stealth announcement. It doesn’t say what it means and it doesn’t mean what it says — we want answers ,” Berg said. “What we’ve invited is complete disclosure of what the deal is and the only response back so far is, ‘We’re only consulting with the bank in Paris.’ ”

Berg said he has not spoken with Ovitz about the issue and “wasn’t planning on it at this point.”

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