By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
THOSE WHO KNEW HIM as an abnormally normal teenager say that Jeff Berg never betrayed any burning ambitions while growing up in wealthy Brentwood. But one day in 1965, the Uni High senior came home from school and, instead of going up to his room to study, went to the garage and grabbed a rope. He tied one end to the iron grating of the family home’s second-story balcony, wrapped the other end around his waist like a mountain climber, and began to hoist himself upward hand over hand. But halfway to the top, Berg’s knot gave out. He dropped some 15 feet to the ground and fractured both wrists. His parents were stunned that evening to find their son with huge plaster casts on both arms. But they were even more shocked when they heard his explanation: Unbeknownst to anyone, Berg had spent most of the year contemplating joining the CIA, the Green Berets or the Marines in hopes of becoming some sort of Special Forces–like operative, and this had been a training exercise. Ironically, the double injury kept him out of the Vietnam War. Instead, Berg enrolled at Berkeley. He talked about going on to graduate school, getting a doctorate, perhaps living the academic life. And then he did something completely unexpected again: He became a Hollywood agent.
By the late 1970s, Berg was working for ICM, which had been formed by New York investor Marvin Josephson as an amalgamation of several existing Hollywood agencies. Colleagues took to calling him “Iceberg” because his people skills left a lot to be desired. It was around this time that Jim Brooks, then one of TV’s hottest writer-producers, had to find a new agent. He interviewed two: The first agent was extraordinarily charming, with a great manner and a keen wit. And the second was Berg.
“He was not very verbal, not very cheery, didn’t have a great, winning light-up-a-room personality. But I chose Jeff,” Brooks once told me. “I reasoned that if the two agents were on the same level, it must mean that Jeff was incredibly bright — it had to be everything you didn’t see.”
In June 1980, Berg did something akin to the day he climbed that rope: He made an appointment to talk about his future with Josephson. At the time, well-liked vet Guy McElwaine was the virtual head of the agency and expected to be named president shortly. Berg had never mentioned wanting to head the agency to any of his colleagues, to his friends, or even to his family. But 25 minutes later, unbeknownst to anybody at the agency, Jeff Berg, at the age of 33, walked out of Josephson’s office as the president of the second largest talent, literary and music agency in the world.
Fast-forward to the present. ICM in recent years had started to lose some prestige in the Industry’s eyes. Not only were movie agents and clients being poached from the agency, especially by CAA, but also ICM’s TV division was not keeping up with rival 10-percenteries. Berg reverted to stealth once again when he pulled off back-to-back big deals designed to shore up ICM’s stature as one of Hollywood’s Top Three agencies. First, he arranged a surprise $100 million private-equity infusion from Rizvi Traverse management in November 2005. I was tipped a month later that, flush with that cash, Berg was looking to acquire the Tiffany of TV agencies (and cash cow), the Broder, Webb, Chervin, Silbermann Agency, as well as the hot movie-and-TV boutique Endeavor Agency.
Rumors of many pending mergers ran rampant, fueled by the shoptalk and gossip swap of baby agents and ambitious assistants worried that, if these agency urges-to-merge became reality, it would take longer to rise up the new corporate ladder. And these wind-up-toy types aren’t a patient bunch. Neither is Hollywood, which wanted weaker agencies to strengthen as a counterbalance to too-dominant CAA. Even the Los Angeles Times reported the rumors, looking at possible matchups and explaining the resulting in-house chaos that would result from all the warring ex-colleagues. But there wasn’t a word reported about ICM-Broder.
Like everything in Hollywood that involves ego and money, deals like this are complicated, since they combine different agency cultures as well as partners and personnel. (Remember, back to 1992, when William Morris acquired Triad? The two agencies had been talking for 17 months; and, even when those chats became very serious, the deal points alone took five months.) While Berg kept his cards close to his vest, the media continued to underestimate him — partly because he doesn’t make himself available to journalists, and mostly because he treats us like the bothersome baboons we usually are. Demonstrating just how clueless the Hollywood trades were about Berg’s intentions, Variety ran a hit piece in June asking, “Has ICM squandered the momentum that could have come with a restructuring?” What the writer didn’t know was that ICM and Broder had already signed a letter of intent. Here’s how it happened:
FOR 10 YEARS OFF AND ON, Berg and his counterpart, Bob Broder, had done that slow dance that accompanies any agency talk of hooking up. The two men, after all, served together on the board of the Association of Talent Agencies’ Strategic Planning Committee and had huddled together over the many regulatory, labor and guild matters affecting their business. Besides, Broder, and his partner Elliot Webb, were ICM veterans who’d both worked with Berg back in the 1970s.
In 2005, Berg turned up the volume on merger talks with Broder’s Chris Silbermann, a fellow active Berkeley grad. Silbermann was very involved with Berkeley’s College of Letters and Sciences board, which Berg had founded and led in the late 1980s. What few understood, though, was how deep Berg’s Berkeley connection ran. He had enrolled during the campus’ turbulent ’60s free-speech and antiwar movements. The school didn’t just change him: According to his classmates, just going there created a common bond, a camaraderie. Berg told me this connection “cut through volumes. We didn’t have to go through any posturing.”
But first Berg had to pin down his war chest before his talks with Broder could proceed further. Once the $100 million was clinched, the negotiations with Silbermann accelerated over four months. The deal-in-the-works was code-named Project Beta. It was quintessential Berg. The negotiators were never in each others’ offices. Instead, they met in a still-secret outside private dining room. (The fact that they still want to use the venue strongly signals that their merger-and-acquisition plans aren’t done.) Phone traffic was run outside the agencies through lawyers and bankers.
One thing was clear from the outset: This wasn’t going to be a cheap deal. And the Broder agency wasn’t sure it wanted to give up its independence and become part of a large organization’s culture. But both sides eventually recognized the urgent need to put the companies together because of the consolidating marketplace where studios have partnered up with networks and still show biz is only a small piece of Big Media’s vertically integrated pie chart of infotainment gigantism. The final negotiations over operational issues took place between Berg and Silbermann during the mid-July Camp Allen investment confab in Sun Valley, Idaho. It happened that host Allen & Co. was brokering the deal, and its managing director, Tom Kuhn, was helping invitees Berg and Silbermann nail down the final details. The three men were sitting by the Duck Pond having lunch one day when CAA president Richard Lovett spied the trio from the other side. “Uh-oh, we’re going to blow our cover,” worried Silbermann. “Let’s invite him over to join us,” Berg suggested. So Lovett wound up being the fourth for lunch, and never knew the deal was taking place. More suspicious was William Morris CEO Jim Wiatt, who saw the three men huddling together throughout the confab and thought something might be up. He began calling Silbermann, asking to get together.
But it was too late. The deal was done on July 27, with all parties signing the papers at the offices of the law firm Irell & Manella in Century City, where the new ICM will have its new 100,000-square-foot office (that’s 25,000 more than its previous digs). Some 27 agents will be coming from Broder, but a dozen or more ICM’ers won’t be making the move because they’ve been, or are about to be, deemed dispensable. Out is Nancy Josephson, the daughter of Marvin, who put Berg in charge of the agency in the first place. She has scampered to Endeavor. (Taking her place as copresident will be Silbermann, 38.) For Berg, solving his agency’s succession issue was, for once, anything but a stealthy move.