ICM appears to be getting closer to a long-awaited cash infusion as Connecticut-based equity fund operator Suhail Rizvi is negotiating to acquire a significant equity stake in the agency. This could mean anywhere from $65 million to $150 million in extra operating capital.
The prevailing question in town: Can that cash fuel an ICM resurgence in TV, publishing, music and, most particularly, film?
After two weeks of rumors, people close to ICM confirmed Thursday that the agency is talking seriously with the founder of Rizvi Traverse Management. Rizvi, who partners with Ben Kohn, has been chairman for the past 18 years of the Rizvi Opportunistic Equity Fund, a $250 million fund that provides growth capital to management teams. Rizvi has used that fund to make investments in more than 28 private companies.
The agency denied that a deal had been reached. Rumor had a deal completed in principle on Thursday.
ICM has been on a cash quest since last year, when it retained Allen & Co., with chairman-CEO Jeff Berg adamantly denying rumors that he and other stockholders had been looking to cash out. Rizvi, in fact, seems like exactly what Berg has been searching for.
A businessman with no experience in show business (though he has a Los Angeles office), Rizvi apparently craves no active role in management of the agency. ICM would continue to be steered by Berg, chief operating officer Rick Levy and co-presidents Ed Limato and Nancy Josephson. Agency sources said the agency would use the Rizvi funds to create a war chest to bolster its core businesses and possibly acquire another agency.
Merging agencies brings the headache of egos and management culture clashes. Observers said ICM could use the cash to compete for top-tier agents, emulating a strategy CAA has employed to distance itself from rivals.
CAA has raised the bar this year by paying rich five-year guaranteed pacts to agents such as ex-UTA partners Jason Heyman and Dan Aloni, the latter of whom just jumped ship and took with him such longtime director clients as Tom Shadyac, Christopher Nolan and “Wedding Crashers” helmer David Dobkin. Aside from poaching a rival and bolstering its stellar client list, CAA has kept its own middle ranks from growing complacent by importing dealmakers and possible future leaders.
ICM was once mentioned in the same breath as CAA, but no longer, particularly in film. While Limato has his enviable superstar list and the agency has cultivated rising stars like Nick Reed, Chris Andrews and Doug McLaren, ICM is considered among the UTA, Endeavor and WMA pack.
Aggressive recruiting by ICM could change the agency’s place in the percentery pecking order. A cash infusion could open the door to giving rising stars the chance to earn equity stakes.
Some question whether a resurgence is possible without a major management shakeup, and Berg has made it clear that he’ll make no deal unless management remains status quo. If the Rizvi deal closes, Berg would still be the largest individual investor in the agency, he would retain executive control, and he would use the occasion to reaffirm his long-term commitment to the agency, said sources close to ICM.