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Jeff Berg Speaks: Plans for New Agency, What Really Happened at ICM (Exclusive)

This story first appeared in the March 15 issue of The Hollywood Reporter.

On July 27 of last year, Jeff Berg -- the veteran agent, Hollywood power broker and defrocked chairman of International Creative Management -- headed for LAX, where he would take a stealth flight to Salt Lake City.

Berg, 65, told nearly no one about the trip, certainly none of the partners at the agency he had been with since its formation in 1975 and had headed for about three decades before being deposed in a May takeover orchestrated by 28 agents at the company. After all, he was about to discuss the type of life-altering plan that had not been successfully realized since four of his own underlings, led by Ari Emanuel, exited ICM to form Endeavor in March 1995 -- after being caught by a security guard as they smuggled out files in the middle of the night.

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Now, in a remarkable reversal, Berg was the one operating undercover as he accompanied his prospective partner, music entrepreneur Jeff Franklin, to a second meeting with Jahm Najafi, the financier who would fund their new venture. An owner of the NBA's Phoenix Suns, Najafi had known Berg for nearly three years, since approaching him on another deal.

By the end of their meeting at Najafi's home outside Salt Lake City, a deal was all but in place: The businessman would commit about $200 million to back Berg, while the agent and his longtime friend Franklin also would throw in several million dollars apiece. "It's a deal we did directly," says Berg of the basic building blocks. "There was no staff; there were no intermediaries."

This was the beginning of Resolution, the talent agency that officially launched Jan. 28 but one Berg has not discussed in depth before this interview on the morning of March 4.

With 18,500 square feet of prime real estate in Century City, a long-term lease and plans to hire as many as 35 agents in the near term, the venture will test Berg as never before. If it succeeds, he will disprove one of his favorite writers, F. Scott Fitzgerald, and show there are indeed second acts in American lives. If it fails, he will go down as the Mike Ovitz of his era, a superstar who fell from grace then tried to restore his luster, only to have his legacy tarnished forever.

STORY: Former CAA Agent Steve Alexander Joins Jeff Berg's Resolution

Adding to the stakes, he's attempting this reinvention at a time of extraordinary challenges within the agency business itself, which nobody knows better than Berg, a hyperintelligent insider who has spent his entire adult life as an agent and grew up the son of a writer-producer father. Sharp as a razor, he is sui generis, as combative as he is brilliant, as remote as he is acute.

His new deal -- put together by Berg's personal attorney, Ken Ziffren, and attorney Josh Grode -- has ruffled the feathers of his former ICM colleagues, who learned about it the hard way: when news leaked Oct. 26, while he still was working from his corner office at ICM.

Shortly after lunch that day, Berg's former deputy and the man who ousted him, Chris Silbermann, 45 -- a much-liked team player -- marched past the two offices separating his from Berg's, accompanied by colleagues Esther Newberg and Rick Levy, and confronted Berg.

The 10-minute meeting was terse, recalls Berg. There were no niceties, nor any explosions. But Silbermann made it clear: Berg, who had long had frosty relations with Silbermann and his allies, would be out by day's end.

And so he was. Other than a brief return that weekend to pick up his stuff, the man who essentially had ruled ICM since 1980 was gone.

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Says Berg, "I had a sense of renewal and liberation."

Whether Berg can succeed has become the talk of the town.

"Who are his clients?" demands one high-level agent, nearly apoplectic about Berg's chutzpah. (Like the many other agents and executives interviewed for this article, he declined to be named.) "The last time I checked, if you're going to have an agency, you need clients."

By contrast, a former colleague is sanguine: "What he really should do is run a high-class boutique; that's what this town needs. People want him to do that, and they want him to pull it off because everyone loves an underdog."

It's strange to hear Berg, a pillar of the industry, described as an underdog, but that's what he became in May, when the 28 new ICM partners concluded their buyout from the agency's previous owners. These included investor Rizvi Traverse Management (with 70 percent) and Berg himself (with 10 percent). Silbermann also had 10 percent but kept his share. (The remaining ownership before the buyout was spread out among a number of individuals.)

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Rizvi had bought into the agency in 2005, part of a move led by Berg to shore up the flagging company when he sold a controlling stake for about $75 million. He followed that with the 2006 acquisition of the Broder Webb Chervin Silbermann Agency following a months-long negotiation code-named "Beta."

Beta ultimately was bad news for the alpha Berg, whose notorious management style had earned him the nickname "Iceberg" even as he built up a client roster including filmmakers Roman Polanski and James L. Brooks.

He had hoped to add Broder's strength in TV to ICM's film stable. But the ICM chairman clashed with his new president, Silbermann, who ousted the late talent agent Ed Limato and refused to accept Berg's wish to merge with rival UTA.

The conflict between these highly gifted men (Silbermann, like Berg, is a UC Berkeley grad, but, unlike Berg, he also attended L.A.'s Mirman School for Gifted Children) took a toll, and in 2011 Silbermann seriously contemplated exiting with several colleagues and forming an agency of his own. Instead, a year later, he joined his colleagues to buy the newly named ICM Partners.

Its value is unclear, but two sources say the company expects future revenue of as much as $200 million from TV packages like Modern Family alone.

Berg himself received a mid-seven-figure payout whose details still are being negotiated. He kept his job but lost his title, authority and power. At Cannes in May, he says he knew it was time to go.

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Sitting in his still-unfinished, 23rd-floor office on Century Park East just a few blocks from his old base, the tall, trim agent seems unfazed by all of this.

Dressed in a blue pinstripe suit, sitting near a Frank Stella painting, he calmly explains how, in the weeks and months that followed, he decided to create a full-service agency that would cover film, TV, music and books while remaining small enough to avoid the major agencies' $20 million to $40 million in overhead.

"I wanted to stay in the agency business but at a different order of scale," he says.

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In the 21 days since he has moved into his headquarters, with its glass-walled offices devoid of furniture ("It's still being shipped," notes Berg), he has hired about 17 agents including former ICM colleagues including David Unger and CAA defectors like Martin Spencer as well as executives Randy Greenberg and Jon Gumpert. Some are veterans; others, notably Steve Alexander, are returning to agenting after a long absence, raising the question of how effective they can be in putting together a portfolio of clients.

Berg says the agency already has more than 100 clients, including filmmakers Polanski, Bernardo Bertolucci, Jean-Jacques Annaud, Nick Cassavetes, Mitch Glazer, Ronald Harwood, Jean-Pierre Jeunet, Roland Joffe, Julie Taymor, Marshall Brickman and James Toback. (Brooks left Berg well before he exited ICM.)

STORY: Jeff Berg Departs ICM Partners

Berg has named his partner and co-owner Franklin as COO but says there will be no other No. 2 -- a bit of a surprise for Berg observers, who note that he always has relied on a strong "people person" to back him up. The current staff, says Berg, will fill any void.

He has yet to land the type of superstar agent who would bring in heavyweight clients. Rivals criticize him for overpaying, noting most are getting well above the $200,000 to $300,000 they might expect elsewhere and some as much as seven figures.

"He is making deals just because they are possible to make," one rival grouses.

Most important, another agent notes, Berg still has to recruit a TV head, which could prove especially challenging. "TV people are tougher to move [than film agents] because their clients tend to be locked up in long-term arrangements," says the agent. "You can't have an agency unless you have TV revenues. It doesn't work."

Berg -- a sophisticated man who sits on the board of Oracle and can quote poets Wallace Stevens and William Wordsworth as easily as others cite South Park -- notes that he did the original deal for The Simpsons.

Money from that, along with another lucrative revenue source that he oversaw, the estate of Theodor Geisel, aka Dr. Seuss, will feed ICM's coffers rather than Berg's.

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For his own empire, creating new revenue streams is the challenge. Efficiency, strong international links and a much closer liaison with clients -- meaning that agents will not take on the vast rosters of some of their peers -- will be the hallmarks of this new agency, says Berg. So will its ability to operate in foreign territories, and the Resolution chairman adds that Asia is ripe for expansion.

He is convinced his new agency can work by being leaner, meaner and more imaginative than its bigger rivals -- and by giving his agents an ownership share. "There will be a participation scheme," he says. "We are working with our lawyers on that right now."

While he is reluctant to use the term "boutique," he insists Resolution never will grow to the size of WME or CAA. Berg sees his strategy as the antithesis of theirs.

His backer, Najafi, agrees. The 49-year-old who made his money on Wall Street and spent time at Salomon Brothers says he is in Resolution for the long term and has no plans to sell. He views this as an entree to other entertainment investments. "We look to Resolution to advise us," he says.

Berg is careful not to repeat the mistake Ovitz made when the former CAA chieftain returned to representation after a stint at Disney with the formation of Artists Management Group. "It feels like he expanded very quickly," says Berg. "It may have been too much, too soon."

Listening to Berg speak as he sits in his office, it is hard not to feel how different he is from the Iceberg.

"That appellation may have been bestowed on me by Jeffrey Katzenberg," laughs Berg.

STORY: ICM Executives to Buy Out Majority Owner Rizvi Traverse

He admits he has changed following a near-tragedy involving his elder daughter. In January 2012, Kate Berg, now 28, collapsed with a brain hemorrhage. She was lucky to be visiting Berg and her mother, Denny, a clinical psychologist, and was rushed to the hospital.

"She had a real dark moment that she was able to recover from," says Berg. "She was in brain surgery for 10 hours and in recovery for quite a while. Fortunately, she had no cognitive damage. That changed me as significantly as anything I have been through in my life."

Born in 1947, Berg grew up in Connecticut, the son of writer-producer Dick Berg (The Martian Chronicles) and the eldest of four brothers, including A. Scott Berg, the Pulitzer Prize-winning author of Lindbergh. To say the household was engaged in a constant cut-and-thrust of debate is an understatement. "We are not career-competitive, but we are competitive in terms of outthinking each other," he acknowledges of his relationship with Scott.

At one point, Berg considered joining the CIA: "I was interested in the world, in intelligence, in different cultures." But his father persuaded him to go into the agency business, and during his breaks from Berkeley, Jeff was a script reader for Ashley Famous (later International Famous Agency), where he got his first job.

The young agent rose meteorically. After Marvin Josephson's IFA bought Creative Management Associates to form International Creative Management in 1975, Berg and another agent, Guy McElwaine, were perceived as heirs apparent; when Josephson expanded his empire, he named Berg president.

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At 33, this brilliant player was running ICM.

Now it's Silbermann's turn. While Silbermann has the challenge of revitalizing the older agency (where insiders say morale is running high following the buyout), Berg has the far greater task of building an entirely new company.

He says he soon will hire a TV head but does not name one: "We will have that shortly. But this is day 21."

His vagueness about that can't overshadow the sheer sense of vitality at Resolution. As he shows me around his headquarters (chosen after Berg inspected 10 buildings), introducing me to staffers and assistants and pointing out the newly constructed offices and conference rooms, he visibly brims over with passion.

"I love the agency business," he says. "But it's an industry in transition. And I know there are a lot of elements you have to put together to make a new company succeed."