A drama over control of the ICM talent agency intensified on Thursday as agency president Chris Silbermann maneuvered to take ownership of a larger share of the company, a move that would further eclipse Chairman and CEO Jeff Berg.
The tension has been on the rise between Berg’s hand-picked number two and the agency chief because of differing visions over the future of the agency, whose stature has declined in Hollywood in recent years.
Berg has taken on a smaller role in ICM’s day-to-day operations in recent years as the agency’s movie business has declined. Meanwhile, Silbermann’s television business has become the dominant source of revenue at ICM, which is what lies behind the power play.
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Discussions over the future control at the agency have been “civil,” one individual close to the situation told TheWrap Thursday, contrary to reports that the two sides were warring openly.
A spokesman for the agency said there was no emergency board meeting called for Friday, despite a report that Silbermann had demanded and gotten one.
Furthermore, the spokesman denied reports that former CAA chief Michael Ovitz had gotten involved in any capacity.
“There has been no engagement, solicitation or request of services or capital from Mike Ovitz,” the spokesman told TheWrap.
Still, tension is high over a plan by Silbermann and his top lieutenants to buy out the majority ownership position of private equity firm Rizvi Traverse Management, which invested tens of millions in the agency six years ago.
The scenario would involve Silbermann buying Rizvi’s position – it is not yet clear with what funding – and Berg moving into a “corporate governance” position.
ICM acquired Broder Webb Chervin Silbermann Agency in 2006 to bolster its television presence, and that element of the deal has been successful while the film department has crumbled. But Silbermann operated under the assumption that Berg would step aside, placing top lieutenants in key positions throughout the company. That never happened.
While Berg has ceded some control to Silbermann, he remains a dominant force at the firm and a large shareholder. After five years under Berg, has Silbermann had enough?
“This guy wants it all now,” a prominent television agent told TheWrap. “He's trying to play the way Mike Ovitz played it, the difference is Ovitz was smart enough to surround himself with partners that made up for what he couldn't do. My guess would be he would leave if he couldn’t get the money.”
If Silbermann is able to orchestrate his purchase of Rizvi’s shares, he’ll need capital. That could mean millions of dollars in private equity backing. But taking full control of the company will be tricky as Berg wants to remain involved in ICM’s governance going forward, according to an individual with knowledge of the situation.
Should that change, Berg could potentially cash in his shares, forcing Silbermann and his investors to buy him out as part of any deal. That raises the price tag yet again.
Not everyone sees Silbermann as a board room Machiavelli or agency titan on the level of Ovitz or Ari Emanuel.
“If he can get private equity, he can leverage the TV assets into getting the company,” a rival agent told TheWrap. “But Silbermann doesn't have a fifth of Ari Emanuel's leadership skills.”
In some respects, the purchase of Broder was a huge success for the agency -- making it a destination for small screen talent even as the company’s film division withered. ICM is a home for show runners and one of the premiere players in packaging shows, and that has strengthened Silbermann’s position in the company.
“Mergers are very unpredictable – look at AOL Time Warner,” an agent at a rival agency told TheWrap recently. “ICM buying Broder seemed to end up being ICM turning into Broder.”
Among Silbermann's top shelf clients are "Grey's Anatomy" creator Shonda Rhimes, "Sons of Anarchy" creator Kurt Sutter, "House" creator David Shore, and "Mad Men" star Jon Hamm. Should Silbermann leave the company, rival agents say ICM might become a shell of its former self.
“Berg is meaningless in the equation,” a top agency executive told TheWrap. “It’s a television company or it’s nothing. They have no motion picture business, really.”
It’s not clear if Silbermann and his top lieutenants could leave if they want to. There are questions about when their contracts expire. Moreover, agency employment pacts typically include non-compete and non-solicitation clauses, which would complicate their ability to join another agency or set up shop on their own.
Rizvi Traverse declined to comment for this story.