Let’s make a deal

Merger mania hits agencies but tie-ins ain't easy

For consummate dealmakers, agents sure seem to have a hard time working out their own negotiations.

Rumors of possible mergers and acquisitions are always in the air: ICM seemed to be on the brink of a major merger with Endeavor, which itself went through a rumored courtship with UTA. Nothing happened in either case.

Then ICM pulled off the biggest agency acquisition in Hollywood history, buying Broder Webb Chervin Silbermann in late August. The consolidation strengthens ICM’s TV arm and brings in ajolt of new leadership, especially in Chris Silbermann, a 38-year-old Broder veteran who becomes co-president and a potential heir-apparent to ICM’s longtime leader, Jeff Berg.

Combining assets ostensibly means more clout, and offers a possible bulwark against a downturn in business as the studios make fewer movies and draw the line on star salaries, and the guilds present the possibility of a strike in the next two years.

So why aren’t more agencies meshing?

Rival agents can make for lousy bed partners, as evidenced by the wave of agency mergers in the early 1990s that brought clashes of culture, collisions of ego and power struggles.

Making the deal is the easy part. Fitting the pieces of a service business together is a complicated, even wrenching, process when the primary assets are people and their relationships.

“You have to realize that people who do that job very well are deeply flawed human beings — myself included,” says Marty Bauer, the former UTA president who is now a personal manager.

He speaks from experience. UTA formed from the merger of the Leading Artists and Bauer Benedek agencies in 1991. There were so many clashes that the agency hired a “partner therapist,” who once organized a bonding retreat where partners were asked to bring their favorite song and poem to recite. It took the exit of several partners for UTA’s current management structure to settle into place.

“People talk about a merger between UTA and Endeavor,” Bauer says. “(But) how do you get Ari Emanuel, who has an enormous ego, to co-exist with Jim Berkus and Jeremy Zimmer, who have similar qualities?

“When two firms merge in the real world, one CEO usually leaves within a year. In agency mergers, nobody wants to leave, and they all vie for control.”

ICM — formed when Freddie Fields merged CMA with Marvin Josephson‘s IFA — has always used acquisitions as building blocks. One of the biggest came in 1992, when Bill Block agreed to sell his InterTalent to ICM, bringing with him agents such as Emanuel, Tom Strickler, David Greenblatt and Ken Kamins. But Block, who believed he would play a major role in the agency’s future, found established film vets Sam Cohn, Guy McElwaine and Jim Wiatt in his path. They had no intention of giving ground.

Block’s troops grew frustrated, and most eventually left — in the middle of the night — to form their own agency, Endeavor. Block and others left later.

Proponents of ICM’s Broder buy say the deal was structured to avoid the pitfalls of past mergers: ICM’s Berg and the Broder partners talked for almost two years, and when the deal was announced, ICM fired its co-prexy and TV head Nancy Josephson, a draconian move that nevertheless removed the potential for a power struggle.

The shakeout was quick, and ICM says there will be no more cuts. Some 13 agents were let go, and Broder’s below-the-line business exited to Paradigm. Josephson landed at Endeavor, and took a formidable TV client list with her as well as “Devil Wears Prada” director David Frankel.

In the long run, the biggest challenge is internal. William Morris’ merger with Triad in 1992 boosted its motion picture and music departments, but blending the cultures took years.

By contrast, Silbermann has been ingratiating himself with film agent vets like Ed Limato, Robert Newman, John Burnham, Toni Howard and Ron Bernstein. “Ed has been so gracious, Robert is my new best friend, John and Toni have all been supportive,” Silbermann says. “They’ve said, ‘Yes, let’s do this.’ They all want to win.”

Such camaraderie is crucial, because film agents can no longer wait for megabuck studio offers. As studios look to discount deals, agencies have become more active than ever in packaging projects and finding the financing to get them made. Communication is essential.

Silbermann preaches patience.

“The important thing to remember is this is a process that takes time,” he says. “I’ve been here seven weeks; we moved our agents in only two weeks ago. You get a year or two in corporate America, but in Hollywood, you get six days. We did this deal because there is a long-term opportunity here.”

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