Big Changes Jolt Talent Industry : Entertainment: William Morris buys Triad. A management buyout is underway at ICM. And InterTalent may fold.

Tremors rocked the entertainment industry over the weekend as one Hollywood talent agency was sold, another prepared to go out of business and a third announced a management buyout.

The William Morris Agency purchased Triad Artists, whose clients include actor Bruce Willis and country music star Vince Gill, for an undisclosed sum. At the same time, several top executives have left InterTalent in anticipation of the company’s demise.

At International Creative Management, senior partners have acquired the majority ownership interest of Chairman Marvin Josephson. As part of the Josephson buyout, privately held ICM reached an agreement with Chase Manhattan Bank to reorganize its capital structure.

The broad talent agency realignment, partly the result of the downturn in the entertainment business, concentrates more star power in the hands of fewer companies and may touch off talent raids among survivors.

The changes also are likely to lead to more layoffs in Hollywood, where unemployment is already high, and to adversely affect industry-supported businesses such as messenger services and restaurants.

“Most of these guys (agents) have been struggling,” said a film executive who asked not to be named. “The market was better when they started in the ‘80s. Now everyone’s fees have come down.”

Most of the moves had been expected for weeks.

One of the beneficiaries is the William Morris Agency, which gains former Triad actors such as Willis, Danny Glover and Patrick Swayze for its troubled film division. Triad’s music, TV and literary rosters will bolster Morris’s already strong presence in those areas.

The two agencies have been talking more than 17 months. Morris President Jerry Katzman, who handled negotiations along with Chairman Norman Brokaw and Chief Operating Officer Walter Zifkin, said the talks got serious this summer.

Plans call for 50 Triad agents to join Morris’ staff of 130. At the management level, Triad partner Arnold Rifkin will take over Morris’ motion picture division. Richard Rosenberg, another Triad partner, becomes executive vice president of the Beverly Hills company.

The Rifkin appointment raised the most eyebrows in Hollywood, since the agent is widely known for his volatile temperament and Morris is considered Hollywood’s most mannered agency. But Katzman predicted a smooth transition.

“Two companies that started out as competitors have wound up as friends,” Katzman said. “This is an incredible amalgamation.”

Not so at InterTalent, which employs about 32. The 4-year-old Beverly Hills agency, which represented stars such as Charlie Sheen, Laura Dern and Jason Patric, is expected to dissolve at any time.

Founding partner Bill Block is in final negotiations with ICM about a senior management position there. Partners David Schiff, J. J. Harris and Judy Hofflund have already left to become partners at United Talent Agency.

The shake-out suggests that smaller agencies have been especially hard-hit by Hollywood’s economic slowdown. Major studios have cut back on script development, many independent production companies have gone out of business and lucrative television packaging fees have become scarcer, entertainment lawyer David Colden noted.

But some boutique agencies, such as Broder, Kurland, Webb, Uffner and the Gersh Agency, have managed to remain healthy. Phil Gersh, a 50-year veteran of the business, says smaller agencies do well if they nourish young talent and limit costs. He’s turned down buyout offers from larger agencies.

“Being an independent agent is still the best job in the business,” Gersh said, “because you control your own destiny. I’m going to die with my boots on, right in this office.”

The talent agency business of today, however, is dominated by companies with offices much bigger than Gersh’s. The realignment is seen as adding even more strength to the so-called Big Three--Morris, ICM and Creative Artists Agency--which are said to have yearly revenue ranging from $60 million to $100 million.

CAA has branched out into advertising, while continuing to represent superstars such as Kevin Costner, Tom Cruise and Madonna. Coca-Cola Co. recently announced that the agency will create and produce ads for Coke Classic in the United States and for Coca-Cola abroad.

At ICM, whose star roster includes Arnold Schwarzenegger and Eddie Murphy, the just-completed management reorganization puts more authority in the hands of partners Jeffrey Berg, Jim Wiatt, Sam Cohn and Guy McElwaine. The New York-based Josephson retains the title of chairman, but without his majority position. Management also shifts largely to Los Angeles.

Berg, the company’s president, said the buyout was part of a five-year consolidation plan that began when ICM went private in 1988. He would not disclose the amount paid to Josephson.

Calm prevailed at the major studios as these changes were unfolding, even though some observers predicted that the consolidation will weaken the studios’ bargaining position, since there will be fewer sellers to choose from.

“I don’t think it makes any difference at all,” said one studio chief who asked not to be named. “If you want Bruce Willis in your movie, you’ll pay the same for him whether he works for a big agency or a small one.”

More people worried that the changes will touch off a talent war, with the three biggest agencies gunning for each others’ top stars.

“This is not a stable business to begin with,” said one executive. “And it could go into the toilet if these agencies become preoccupied with a client war.”