Blind Ambition: Why Jeff Berg’s Resolution Was Doomed From the Start

Jeff Berg Resolution

Monday’s surprise announcement of the closure of Jeff Berg’s Resolution amounts to a classic example of Hollywood hubris trumping reality.

Former ICM chief Jeff Berg launched Resolution less than two years ago on the heels of his bitter breakup from ICM, the agency where he spent nearly 40 years until finding himself on the losing end of a power struggle with Chris Silbermann. His failed attempt to maintain his status as a top Hollywood power broker eerily echoes Michael Ovitz’s rise and quick fall with Artists Management Group more than a decade ago.

Berg founded Resolution as a talent and literary agency in early 2013 with much fanfare. He chose luxurious offices in a ritzy Century City building and went on a hiring spree of veteran film, TV and music agents at eyebrow-raising salaries — some at $1 million annually. On Monday, Berg informed the staff–which numbers between 40 and 50 — that he would be closing the office over the next month.

On Monday, at least some soon-to-be former Resolution agents — of which there are about 20 — were grumbling that they are still owed outstanding expense checks and that the agency was late in paying commissions.

Berg opted to go big from the beginning despite the lack of bread-and-butter cashflow from TV packaging deals, high-profile movie stars and other sources of income that agencies can rely on to help keep the lights on. Most significantly, Resolution tried to propel itself into the big leagues at a time when even the largest agencies are challenged to navigate through a dramatically changing business landscape.

Berg’s initial round of funding came from Phoenix-based investor Jahm Najafi, who stopped providing new money at the end of last year. That forced Resolution to tap China-based Bison Capital, announcing that partnership in March with an estimated $200 million infusion.

Berg told staff Monday that Bison’s refusal to provide adequate coin was to blame for the failure of the agency. But in reality, Resolution had been in a tailspin for months. Berg, by many accounts, is a savvy dealmaker but lacking in the kind of people skills that he would need to motivate employees of a start-up operation going through inevitable lean times. Instead, one source said Berg seemed to be trying to project an aura of invincibility that came off as detached and out-of-touch.

Insiders have said that Berg dismissed suggestions from those who cautioned that Resolution should take a less aggressive route to expand as an agency — and avoid costly hires in favor of growing talent from within its ranks. In other words, it should pursue a strategy similar to what the partners at Verve, the most successful Hollywood agency start-up of the past decade, did when launching their agency after leaving WME.

Instead, Resolution focused on recruiting well-established agents. Insiders say that job offers went as high as $5 million for five years — well above the scale that a mid-tier agency would pay, much less a start-up.

Early Resolution pitches to many middle-tier agents targeted for hiring included promises that they would get paid what they were actually worth;  fewer staff meetings (although one insider said there were actually more such meetings): and the promise that top talent agents like CAA’s Tracy Brennan and Chris Andrews would be joining — moves that never materialized.

Instead, the agency had a rocky first year with a number of defections including Jeff Franklin, Leigh Brillstein, Dennis Kim, Steve Alexander and Adam Kanter. The agency had difficulty from the get-go attracting enough young, hungry agents and A-list talent. Morale was hampered by Resolution lacking the firepower on its client list to aggressively compete for the top jobs in film and TV. One insider said that even the prominent agents at the company were not as productive as younger reps who tend to do much of the heavy lifting at Hollywood shops.

As of Monday, Resolution’s highest-profile clients included Lindsay Lohan, Rose McGowan, Ray Winstone, Haley Joel Osment, Michelle Yeoh and Roman Polanski.

Insiders said that at the start of this year, many Resolution’s veteran agents saw reduced bonuses as a result of not pulling their weight. In several cases, that was impetus for their eventual departures.

Additionally, the decision by Najafi to stop providing new funds served as a warning signal for other agents to start planning their exits.

When Resolution disclosed that it was pulling the plug on the agency Monday, some insiders asserted that the reason more people had not yet departed was because they had more restrictive contracts.

The announcement also spurred rumors that Bison Capital had been attempting to sell Resolution and that Resolution had been seeking merger partners but was unable to land one because of the debt that had accumulated over the 21 months since the agency’s formation.

 

 

 

 

 

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  1. luvusa says:

    When I think of some of the best agents at ICM, I think of those with great people skills, Luttrell, Robinson, Benjamin, etc., the ones who truly loved the people with whom they worked and those they represented, who needed neither spotlight nor substance to abuse. Berg never came close.

    Looking at the outcome of ‘Resolution,’ karma comes to mind.

  2. Pye says:

    I hope the keener eyes see that certain issues affecting Resolution since its inception are also endemic to the rest of the agency business, nay, to the wider entertainment business in general. The Chinese do not mess around (most don’t, anyway). They buy wish cash and avoid debt as a point of culture. The rest of private equity will start to follow their lead, especially as we near another credit crisis that’ll make 2008 look like a practice run.

    Expect the agency business to necessarily shrink, with Paradigm, ICM & UTA (et al.) needing to absorb or be absorbed. Prepare accordingly.

  3. Espen says:

    Having worked at ICM both as an assistant and an agent in the mid 90’s under Berg, I can say unequivocally that this is pure karmic justice for the worst manager of people/business I’ve ever seen.

    This article is right: he was a great deal maker, but he had the emotional intelligence of a door stop, making him the worst possible choice to lead a company full of people.

    That’s why ICM had all those mass defections in the late 90’s and why he was eventually forced out. His management style was atrocious and the resulting work environment downright toxic. The guy couldn’t inspire a song, much less a group of people to work hard for him.

  4. Marta says:

    I think Jeff Berg is a visionary who simply needs to surround himself with honest & less greedy (lucky to work at a great company) agents, not sharks. They do exist. I refuse to swim with sharks, successful and smart people stay in our boat! I am very sad to see what appears to have been a very timely company with great ideas- consumed by the greed of formerly unemployed (recessionary) porky agents who claimed & professed their shared vision but clearly only wanted paychecks – LARGE ones. And given our union only allows for 10% commissions (always wondered since price fixing being illegal…) Where they think these paycheck s need to come from???
    You can find better people , Jeff, and I wish you all the luck in the world.I spoke to some of your staff during the closing and not one of them was willing to roll up their sleeves & struggle with and for this dream they all had sold me on- WTF….
    Any of us who are winners have gone through feast and famine. I used to think that ass-oles surrounded themselves with ass-oles or sharks- I guess, the fact is sometimes artists and visionaries simply get sharked. Brush yourself off & hire some great people who will work with you like someone else said- from the ground up. ….maybe not for you (or themselves). Teamwork is the most awesome work! And opportunist make me barf. Sending good wishes your way- and what great sexy creative talent you assembled! ” Do it again!” The biggest successes happens sometimes after we skin our knees! I know that’s how I learned to ride my bike; ) All my best, xoxo

  5. Bruce says:

    I WONDER IF THEY’LL LOOK AT MY PHOTO AND RESUME NOW, I NEED A NEW AGENT.

  6. Bob Clow says:

    No doubt Jeff Berg was at one time a great agent. He was NEVER a great businessman. Not even a good one. Hubris is too mild a word for his psyche.. The stories of the good people who worked for him over the years who were dismissed and who have gone on to create successful careers are legend. A friend once said to me, “We get what we deserve.” He has.

  7. dunstan says:

    WTF, great question. Clearly, their business plan was out of whack in a major way. Instead of trying to make a gigantic splash, it might have been far wiser to start small and build out the agency over time.

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