ICM agent able to take clients with him

Ed Limato’s arbitration victory over ICM on Monday puts into play not only one of Hollywood’s most senior and revered agents but also the most important client list in a generation.

With his ICM ties severed, Limato is now free to join another agency. He potentially brings with him a pool of first dollar-gross clients, including Denzel Washington, Mel Gibson, Richard Gere, Steve Martin, Billy Crystal and Liam Neeson.

Any agency could use that kind of client infusion, but speculation has Limato’s likely landing spots as either WMA or UTA. Though no negotiations took place while Limato remained under ICM contract, he has worked with WMA honchos Jim Wiatt and Dave Wirtschafter as well as such senior WMA agents as George Freeman.

While ICM can claim a stake in commissions for deals already in the works, Limato’s attorneys said he doesn’t have to share commissions on fresh deals once he moves on. While every agency is looking to cut costs in anticipation of a commission slowdown next summer when studios and labor unions square off, not having to share commissions on fresh deals makes Limato and his seven-figure salary an even more enticing prospect.

On Monday, citing the landmark DeHavilland decision, now incorporated in the California State Labor Code, that ended the studios’ stranglehold over actors’ contracts, arbitrator Diane Wayne ruled that Limato was free to leave ICM immediately because his contract renewals exceeded seven years.

The ruling instantly turned the talent agent into a free agent and provided a dramatic end to an association with ICM that spanned 32 years.

“I am deliriously happy to be free to go on with my career,” Limato told Daily Variety moments after learning of the verdict. “I plan to continue as an agent for as long as I can.”

Limato said he hoped to be out of ICM’s Century City headquarters before the end of Monday. He had been working out of his office, along with his assistants, even after ICM announced he’d been stripped of the co-president title July 13. By that time, he had already lawyered up with Tom Hansen and litigator George R. Hedges.

“He’s a free man, on the basis of the same seven year rule that broke the studio system,” said Hedges, the lead litigator from Quinn Emanuel. “In 1943, Olivia de Havilland sued Warner Bros., and a court ruled in her favor that exclusive services contracts can only run seven years. This is a lot like Curt Flood breaking the reserve clause and empowering baseball players to be free agents. Now, it’s Ed Limato doing it.”

Flood, who refused to be traded from the Cardinals to the Phillies, lost his case but paved the way for early free agents Andy Messersmith and Dave McNally. Boxer Oscar De La Hoya was the most recent to successfully to declare free agency through Section 2855 of the California Labor Code, when a Federal Court ruling freed him from a contract with the boxing promoter Top Rank.

“The irony here is that this is the very principle that led to the rise of great talent agencies, and it sends a clear message to agencies that they must comply with the same law they would be rabid that studios comply with,” Hedges said.

ICM saw the matter much differently.

The agency took the position that Limato’s case was different from that of de Havilland, whose tenure was based on a series of one-year options that were renewed at the behest of Warner Bros. Limato’s ICM run was based on a series of contracts that were renegotiated over the years. The last, which Limato signed in 2006,ran through June 31, 2007 and then called for him to move into a three-year consultancy for the agency. Limato didn’t want to do that, and won’t have to, thanks to Monday’s ruling.

“The arbitrator’s decision to allow Ed to end his contractual obligations was based solely on a technical interpretation of Section 2855 of the California Labor Code, commonly referred to as the seven-year rule,” ICM general counsel Richard B. Levy said in a statement. “Ed is now able to accept new employment opportunities. We wish Ed continued success in the next phase of his career.”

Monday’s arbitration decision concludes an acrimonious exit for Limato. Since ICM acquired the boutique Broder Webb Chervin Silbermann and tapped Chris Silbermann to become president alongside Limato, the company has undergone major changes as Silbermann set about grafting onto ICM the culture that made BWCS a TV packaging powerhouse. Filmmaker agent Robert Newman left for Endeavor in January, and Gotham-based Richard Abate left to start a book division for Endeavor shortly after. Rumors circulated for months that Limato felt disrespected and undercut by the reorganization.

While Limato stayed on the payroll and worked from the ICM office, he did not attend staff meetings after his demotion and watched as the agency dismissed three young agents who trained under him.

Under CEO Jeff Berg and prexy Silbermann, ICM will rely on emerging film leaders like Nick Reed and Doug MacLaren and vets like Toni Howard and John Burnham. The agency is aggressively trying to import a star dealmaker who can bring in the kind of gross-dollar participant clients that Limato will likely take with him.

While ICM has a decent roster of filmmakers and screenwriters — and strong TV and publishing businesses — the agency is now lacking the first-dollar gross-earning movie stars who are at a premium as studios try to build pre-strike film slates around them.

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