Talent Exec’s Exit Could Spark Industry Frenzy

In a move that shakes up Hollywood’s talent agency business, Jim Wiatt quit Friday as co-chairman of agency powerhouse International Creative Management, home to such stars as Julia Roberts, Mel Gibson and Eddie Murphy.

Wiatt’s resignation after 22 years at the agency, which followed long-simmering tensions with ICM co-chief Jeff Berg, marks the single biggest event to rock the agency business since superagent Michael Ovitz left Creative Artists Agency in 1995.

It could well set off a feeding frenzy by rivals, who exploit any sign of instability at competitors by aggressively poaching stars uneasy about management instability. Since clients can leave at a moment’s notice, talent agencies rely heavily on the relationships agents have with the actors, directors, writers and producers they represent.

The affable Wiatt, whose clients include Murphy, Nora Ephron, Richard Donner, Penny Marshall, Tim Allen and Sylvester Stallone, was known for his strong relationships with talent and studio executives.

Writer-director Ephron, a longtime client, said of Wiatt: “He’s a great agent and a great person, not necessarily in that order. He’s everything you want in an agent. He’s completely efficient, a spectacular negotiator, he’s fair, he has good taste and good relationships.”

Wiatt quit effective immediately after rejecting ICM’s latest offer for a five-year contract to replace one that was to have expired Sept. 30. While Wiatt says he has no other job lined up, it is believed he may land a top spot at the William Morris Agency, replacing movie head Arnold Rifkin. A Morris spokesman declined to comment.

Wiatt is also being courted by other agencies and managers, including his good friend Brad Grey and onetime rival Ovitz.

Wiatt said he plans to take the weekend off and think about his plans and will meet with companies next week. He said he wants to be an agent or manager. “I love being an agent,” Wiatt said.

Over the next five years, the privately held ICM will buy out Wiatt’s stake in the agency, thought to be worth about $7 million. Wiatt, who is believed to have a stake greater than 10%, is the second-largest shareholder behind Berg, who owns about 30%. Marvin Josephson owns about 10%.

ICM has 650 employees, of which 150 are agents. In addition to its film clients, it makes substantial money by packaging such hit TV shows as “Friends.”

Wiatt, 52, and Berg have always made $1.5 million a year with no salary bumps or bonuses, significantly less than what many top agents and studio executives get. ICM has been keeping expenses down to pay down $63 million in debt taken on in a 1988 management buyout. That debt, now at less than $10 million, is expected to be paid off by the end of next year. ICM insiders suggested that had Wiatt stayed, the value of his stake in the company could have vastly increased.

While signing a new deal was contingent on getting more money, sources said Wiatt was also unhappy with a new management structure that left his role less defined.

Under the structure, announced in October, Wiatt--who joined ICM in 1978 and was made president in 1985--was promoted to co-chairman and co-chief executive alongside Berg. But sources said he felt pushed aside by the new hierarchy that gave more power to agents Nancy Josephson and Ed Limato, who were named co-presidents.

Wiatt would only say, “I’ve had a really great career there and helped build the company, and for several reasons I was just not as happy as I should have been.”

Wiatt’s unhappiness was an open secret in Hollywood circles. Last year, when his contract expired, rumors were rampant that he might leave ICM. Instead, he signed a one-year deal. Irking him was the agency’s governance agreement, which required a unanimous vote on issues from the three partners, including founder Sam Cohn.

Wiatt had supported Berg in his 18-month fight against Cohn to change the agreement to a majority rule by the seven-member board, which finally happened in March, concurrent with ICM buying out Cohn’s ownership stake.

ICM and Wiatt began negotiating a new deal about three weeks ago. Berg made a proposal to Wiatt attorney Skip Brittenham that was rejected. Last week, Berg came back with a take-it-or-leave-it sweetened offer, which Wiatt declined to accept.

In an interview Friday, Berg said: “Clearly, this is not the result we wanted. We did everything we could to retain Jim within the constraints of how we operate in our business. . . . Together with the other issues he was struggling with, this just didn’t work, and we’re sorry to lose him.”

Friday morning Berg sent an internal e-mail informing ICM’s agents. Wiatt didn’t attend the brief meeting where Berg, Josephson and Limato addressed the agency.

Although Wiatt did not have as high a profile outside the nation’s entertainment industry as Ovitz, he nonetheless had a wide-ranging influence in Hollywood.

“I spent 20 years competing against him, and now I’ve spent the last six months working alongside him,” said Ovitz, who now heads the management company Artists Management Group. “I really have respect for the guy. He was a great competitor and is also a great ally.”

The departure breaks up the longest-running current partnership in Hollywood and comes on the heels of another major executive change--the resignations last month of longtime Warner Bros. co-chiefs Bob Daly and Terry Semel.

Wiatt is widely liked for his down-to-earth demeanor and, as one client said, his lack of eccentricity, while the more cerebral Berg is considered aloof by those who work for him.

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Jim Wiatt

Age: 52

Background: Los Angeles native. Graduate of USC. Worked as a top aide to former U.S. Sen. John Tunney (D.-Calif.) in the early 1970s before becoming a talent agent. Married, with wife expecting their first child.

Former titles: Promoted last year to co-chairman and co-chief executive of talent agency International Creative Management. Joined agency in 1978 and became president in 1985.

Personal clients: Actors Eddie Murphy, Tim Allen and Sylvester Stallone. Writers, directors and producers include Nora Ephron, Kevin Williamson, Richard Donner and Penny Marshall.