Jim Berk Out as CEO of Participant Media After Eight Years (EXCLUSIVE)

Participant Media CEO Jim Berk resigned Friday after more than eight years atop the multimedia company, with founder Jeff Skoll announcing he would serve as temporary chief executive of the company he built to pursue both profits and social change.

News of Berk’s departure – which took effect immediately — surprised many employees, although tensions had been mounting inside the company as Skoll pushed for quicker expansion into foreign markets and advances by Participant’s television and digital operations.

Variety reported exclusively last month that Skoll had ordered a strategic review of his 11-year-old company, which McKinsey & Co. began last month. He also planned to appoint a board of directors to help the company map a path forward.

Skoll, a 50-year-old tech billionaire and former eBay CEO, had pushed more aggressively for the changes than his chief executive, Berk, according to several sources inside Participant.

Current and former Participant employees also had  complained about what they saw as Berk’s micro-management and indecisiveness. Skoll acknowledged he had heard those complaints and said he was impatient for progress at his media company, but he also voiced strong support for Berk.

The 200-plus employees of Participant learned of Berk’s departure Friday morning via email. Soon afterward, Skoll assembled workers for an all-hands meeting at Participant’s Beverly Hills headquarters. Outlying offices listened in via speakerphone. Berk, 55, did not attend.

Skoll said he and remaining Participant executives would lead the search for a new chief executive.

“I am grateful to Jim for leading Participant over the last eight and a half years, expanding the company to span film, television and digital, serving a global audience of socially conscious consumers,” Skoll said in a statement. “Jim has been instrumental to Participant’s success, and we all wish him well as he embarks on the next stage of his career.”

Berk spoke only through a statement released by the company. It read: “It has been a tremendous privilege to lead Participant Media. I am incredibly proud of our collective work to drive change through entertainment, but after more than eight years at Participant, it is the right time for someone else to take the helm. I look forward to the company’s continued success.”

Participant has impressed many in Hollywood since its 2004 creation for earnestly pursuing its “double bottom line” goal of profitability and the advancement of myriad of social causes, such as clean water, education reform, income equality and nuclear non-proliferation.

In an extended interview last month, Skoll also expressed pride in what Participant has accomplished. The company is best known for films like “An Inconvenient Truth,” “Good Night, and Good Luck,” “The Help,” and “Lincoln” and for educational and action campaigns that accompany them. It has won eight Academy Awards, most recently in the feature documentary category for “Citizenfour.”

“I’ve never been more energized or excited about the opportunities that lie ahead for Participant,” the company founder’s statement Friday said. “We remain committed to inspiring and compelling social change to the world’s most pressing problems through the power of great stories and engaging our audiences to take meaningful action.”

The McKinsey review was not expected to conclude until this summer. Insiders previously said they believed executive changes at the company were not likely until that outside assessment had been completed. But Berk’s departure came swiftly, without a transition period or any personal explanation from the outgoing exec about what precipitated the change.

Skoll said he would work with the “leadership team” to “ensure a smooth transition.” With Berk’s sudden departure, however, he will not be involved in the search for his successor.

While he did not give interviews Friday, Skoll had told Variety in March that his sense of urgency in improving his media company had been driven in part by a severe illness last year. His bout with yellow fever, he said, persuaded him that he had to prepare Participant so it would be ready to continue after his eventual death.

“This was part of my wake-up call,” Skoll said. “At Participant, I am the board. I am the sole greenlight at the company. If something happened to me, that would be a problem.”

Skoll said that, while his film business was profitable, the company overall had never been in the black.

One of his primary focuses has been on what to do with his company’s nascent television enterprise. The Pivot cable channel was shaped to appeal to millennials, but that audience has proven elusive for many media companies. And cable channels seldom succeed as stand-alones. So the company’s strategic review will examine, among other things, whether additional acquisitions would be advisable.

Several people who worked at Pivot had expressed frustration with Berk. They said he had never settled on a strategy for the channel and delved too deeply into the details of individual programs.

Berk’s relationship with Pivot’s founding chief executive, Evan Shapiro, had been particularly rocky, sources said. Shapiro left last November, and soon afterward took a position as a digital exec at NBCUniversal.

Berk had said creative disagreements were par for the course, especially when launching an ambitious new operation. He promised that the channel, already available in 48 million homes, would reach 60 million by some time in 2016.

But Skoll also made it clear that he wanted more out of the company’s TakePart website. It engages audiences on a range of social issues, often tied to Participant’s theatrical releases. “It’s really the first time where it’s going to require more resources, more attention, and making the right strategic bets so that we don’t go down the wrong path,” he said.

Skoll’s frustrations boiled over during a mid-year review last summer, when the owner met with his management team. After asking about progress in various divisions, sources said, Skoll said repeatedly: “This thing is broken. It’s broken.”

Participant’s owner did not deny making that comment, but explained the context. “We have done super on our film business and our brand in the Hollywood entertainment community,” Skoll said. “I felt there were a (few) things that really needed attention. One was international expansion, the other was our approach to digital and … we are not spending any time on consumer branding. I felt those things were off track.”

Not just content to stand still, Skoll had said in 2013 he was intent on expanding his media empire by 10 times. He hoped over the next decade to take Participant to 2,000 employees and to make 10 times as many movies, TV shows and stories for TakePart.com—with operations all over the globe.

Said the Participant founder: “I’m impatient to see the future as soon as possible.”

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