Sticking to the core business.

International Creative Management chief Jeffrey Berg keeps his focus on talent management

With clients Arnold Schwarzenegger, Eddie Murphy, Mel Gibson and Sharon Stone, Jeffrey Berg, chairman of International Creative Management Inc., gets lost in the publicity glare his stars throw off. Berg was content with his relatively low profile until late March when he publicly challenged his arch-rival, the much publicized Michael Ovitz.

Although Berg, 46, says there is no personal animosity between the two talent agency moguls, he accused Ovitz of a conflict of interest for taking on Credit Lyonnais SA as a client for his Creative Artists Agency.

Berg says he saw the issue as a threat to the industry because CL, a large Paris-based bank, has a 98 percent stake in Metro-Goldwyn-Mayer Inc. The bank's $3 billion Hollywood portfolio includes smaller studios such as New Line Cinema. Berg's clients have also done films with these studios.

If Ovitz, as a consultant to the bank, gained access to inside information about the kinds of contracts Berg's stars have with MGM, he could use that information for his own agency's benefit, Berg asserts.

Berg's complaints forced the three major Hollywood trade guilds, the bank and Ovitz to clarify the arrangement, restricting CAA to advising Credit Lyonnais on MGM but staying out of all creative decisions. However, Berg wasn't satisfied and has called for a U.S. Justice Department investigation into the "unholy alliance" between CAA and CL.

Berg masterfully used the press to air his complaints, forcing the guilds to get involved and putting the issue before government regulators.

The Hollywood trade publications made the story front page news and the national news weeklies Time and Newsweek played the story prominently. In a Time magazine interview, Ovitz acknowledged the industry is rife with conflicts of interest but refused to back down.

Berg continues to press the issue and some in Hollywood say he may be shifting the balance of power in the talent industry to his side.

The controversy figures to remain topical in Hollywood until either Berg or Ovitz prevails. Berg will only be happy when Ovitz backs out of his arrangement with the bank. A full-scale Justice Department probe into the CAA-CL alliance could propel Berg ahead in the war of the talent agencies.

For the last five years Berg has been the second most powerful agent in Hollywood. Ovitz dominated with his non-traditional wheeling and dealing that made CAA a packager of talent and also a force in mergers and acquisitions when he played the go-between in Matsushita Electric Industrial Co.'s buyout of MCA Inc.

Berg has been in the talent agency business for 24 years and has spent his entire career at ICM and its forerunner. While Ovitz has been branching out, Berg has steadfastly tried to solidify his client base and not veer off into other, related businesses.

Berg explains, "I think our core business is in the representation of artists and we are challenged and intellectually engaged by that. It's a growing business and increasingly complex because of the problems of filmmakers. I've got my work cut out for me just doing that and I don't want to develop tangential business plans -- which isn't to say I'm not interested in new forms of income."

Berg isn't in a position to be free wheeling because of the financial restraints inherent in ICM's 1988 leveraged management buyout that was financed by Chase Manhattan Bank. Berg says his mandate is to the bank and his shareholders and he can't afford risky new ventures that could "lead me down the wrong path."

Over the last 12 months, Berg has made several bold moves in addition to challenging Ovitz. The agency has gone after and captured several big names including Spike Lee and Steve Martin.

Lee, a maverick in the entertainment industry, never had an agent. "We told him we could really help him and then developed a business strategy for him," Berg says.

"You will see him making movies but you will see him in different relationships," he adds. "He is in the retail business and music promotion and we will look to push each of these sectors and new ones."

In late April Lee was meeting with television network executives, pitching series ideas. ICM has forged a niche in television products and is involved in 22 pilots before the networks.

In October, ICM took on nine new agents from InterTalent Agency, including Bill Block, whose loose, hip style contrasts with Berg's buttoned-down approach. Block was featured in a recent Vanity Fair story while Berg was a secondary figure in the piece. Berg is grooming Block and ICM President Jim Wiatt for leadership roles in the future and delegates increasing responsibilities to them.

Block considers Berg his mentor. "Jeff is a quiet business genius who can calculate better than anyone," he says. "Agents don't do the financials but Jeff understands banking, the distribution business and the legal end. This can be such a weapon for an agency."

Block brought over new talent to ICM including Charlie Sheen and Forrest Whitaker. The infusion of ITA agents brought ICM to 140 worldwide up from 120 in 1988.

Revenue at the time of the leveraged buyout was around $60 million and the business has grown since then but figures are no longer released.

In March, the company moved into a splashy new headquarters in Beverly Hills on Wilshire Boulevard that was originally built to house Thomas Spiegel's Columbia Savings & Loan.

Despite generous allowances from Kasden Realty, which developed the building, ICM spent considerably for the interior build-out which has the quiet cool of a modern art museum rather than a business. The company was headquartered in cramped offices on Beverly Boulevard for more than two decades.

"By being on Wilshire directly across from the academy (Academy of Motion Pictures Arts & Sciences) we thought it would give the right message to the industry," Berg says.

When Berg graduated the University of California at Berkeley in 1969 with a literature degree, the talent agency world was a much different place -- there was no CAA or ICM. Berg got his start during summer vacations as a reader and then got his first full-time job at Famous Artists, working for Ted Ashley.

Moving to Creative Management Artists, Berg became close to Freddie Fields who became his mentor. Although retired, Fields is still an important sounding board for Berg and, before he went public with his Ovitz conflict-of-interest campaign, Berg consulted Fields.

When Famous and CMA merged in 1975, Berg was well positioned to move up and since 1985 has been chairman.

He manages by consensus but "I draw upon my eclectic interests. Politics, economics and local trends are important. You must pay attention to events outside of Hollywood and I don't draw my imagery from sports and war. I draw it from what goes on in the outer world. You can't afford to be insular."

Berg was exposed to Hollywood as a teen when his father, television writer Dick Berg, moved his family from Connecticut. His brothers also have entertainment connections. F. Scott Berg authored a biography on Samuel Goldwyn and his younger brother, Tony, is in the record industry.

Snapshot

Jeffrey Berg

Age: 46

Native of: Westport, Conn.

Resident of: Pacific Palisades 

Education: B.A. in literature from University of California, Berkeley