ICM arranges buyout from Rizvi equity firm
International Creative Management’s leaders announced Friday a management buyout of the talent agency from private equity firm Rizvi Traverse Management, which acquired controlling interest six years ago.
The high-stakes move is designed to give top agents at ICM, which represents such stars as Al Pacino, Jodie Foster and Ellen DeGeneres, a financial interest in the business and empower a younger generation, led by ICM’s 43-year-old president, Chris Silbermann, to run the agency.
Silbermann and ICM Chairman Jeff Berg sent an email to the more than 400 employees of the Hollywood talent firm Friday afternoon saying that they and Rizvi had “agreed on principle terms to establish an agent-owned partnership for ICM.”
“Our primary objective always has been to remain highly competitive as we turn to the next generation of leaders at our agency,” the email said. “We are confident this new partnership will position the agency, its clients and employees well for the future.”
There has been much speculation about a power struggle within ICM between Silbermann and Berg, whose relationship has been described as chilly by some insiders at the Century City-based agency. However, the two men worked together to design the new deal to return stability to the agency, which has been rattled by recent news about a management shake-up.
Under the new structure, Berg, 64, will remain a key part of the management team and retain an ownership stake in the agency he has headed for more than three decades. However, people expect him to assume a diminished role.
Silbermann is expected to manage the company along with a group of new partners. Many of his former allies, including Bob Broder and Ted Chervin, are expected to become partners, which will help fortify Silbermann’s control.
The proposed transaction resolves uncertainty that has been hanging over the agency in recent months as the senior agents tried to stitch together a package to buy out Suhail Rizvi, co-founder of the Michigan-based Rizvi Traverse Management. The transfer of ownership is set for Jan. 1. Rizvi is expected to maintain an economic interest, such as continuing to participate in profits from TV hits “Modern Family” and “The Big Bang Theory.”
Rizvi, who declined to comment, bought controlling interest in ICM in 2005 for more than $75 million. A year later, Rizvi invested an additional $70 million for ICM to acquire the boutique powerhouse TV agency Broder Webb Chervin Silbermann.
That move bolstered ICM’s financials because of Broder Webb’s representation of high-earning TV producers, including Chuck Lorre, who created such juggernauts as “Two and a Half Men” and “The Big Bang Theory.” The 2006 acquisition of Broder Webb also introduced a more aggressive management team at ICM, led by Silbermann, who took over day-to-day management. The agency has lost a number of top motion picture agents and talent in recent years.
The buyout comes amid great tumult in the media industry as audiences have scattered and social media and the Internet have become alluring entertainment destinations, particularly among young consumers. The seismic changes have left the once fat and happy major Hollywood talent agencies fighting for their survival. Major Hollywood studios are making fewer movies and are forcing actors and producers to slash their upfront fees, which has negatively affected the traditional 10% commissions agencies collect on transactions.
At the same time, the TV networks have turned to so-called reality shows because they are cheaper and often more popular than the scripted TV programs that have long underwritten the operations of large talent agencies.