ICM's Jeff Berg cautious about mega-deals
Says 'derivative material' discourages innovationNEW YORK -- Even as Comcast gets set to acquire NBC Universal, ICM chairman and CEO Jeff Berg says the industry should keep expectations about the benefits of mega-deals in check.
"I've never seen a merger or a financing (deal) create a better series of movies," Berg said. "What it indicates is the sector is very attractive," but ultimately "the industry itself has to rely on the creativity and execution of what artists do."
Speaking at Nielsen's Media and Money conference in New York, where Berg gave a keynote interview to THR editor Elizabeth Guider, the agency veteran described a Hollywood culture in which studios and networks are more squeezed for cash -- and less willing to take on financial risk.
Where the old studio model invested heavily in development, production and marketing, "now studios are saying 'do your own development, bring us the financing, and maybe bring us some marketing money,' " he said. "Every movie is its own little IPO."
The result, he said, was that other players had to step in -- a role he saw suiting the agencies. "We have to develop new relationships and new sources of capital."
Berg's critique of risk taking extended to the creative realm as well.
As movie studios concentrate on remakes, toy licenses and sequels, Berg questioned what he sees as a lack of originality. "There's an abundance of derivative material being made," he said. "I understand the market but it also doesn't encourage the level of innovation you'd expect from a business as successful and dynamic as Hollywood."
Berg, whose own ICM was on the buying end of an agency merger several years ago when the company acquired Broder Webb, lauded his competitors for their dealmaking prowess.
Asked by Guider about the William Morris-Endeavor merger, Berg replied "They (William Morris) were taken over," then went on to say that "Ari (Emanuel) made a very smart deal. He needed to get bigger and he wanted to get bigger."
Berg did not rule out the possibility of expansion himself, saying that "it's possible" and even that "it's likely" but noting there were many issues to consider before making a purchase. "We have the cash to do other deals but they'd obviously had to price out correctly," he said. "Agencies are very distinct, and it would have to be the right political, financial and cultural fit."
Berg noted that while change was roiling the business, much of that change could turn out for the best, for instance, he said, studios' potential collapsing of the theatrical window might seem like a challenge but would likely work out in the end. "The downside is that (films) become more of a commodity and less special. But things change," he said.
Ultimately, Berg said, there was reassurance to take from the fact that the film business remained large and profitable. "There are very few aspects of the economy that were successful in 1909 and are still successful in 2009. Movies are one of them."