International Creative Management, Inc. Business Information, Profile, and History

History of International Creative Management, Inc.

International Creative Management, Inc. (ICM) is a leading Hollywood talent agency. Emerging from the shadow of Creative Artists Associates, which redefined the industry in the 1980s, ICM's 150 agents represent film stars Mel Gibson and Julia Roberts, the director Francis Ford Coppola, and former British Prime Minister Margaret Thatcher, among others. ICM is the only major talent agency ever to have been publicly owned.

Creative and Famous Origins

ICM was created in 1975 out of an alliance between Creative Management Associates (CMA) and the International Famous Agency (IFA). CMA included in its stable the legendary agent Sam Cohn; IFA had been part of the predecessor to Warner Communications. The new agency, ICM, was part of Josephson International, Inc., a publicly traded company. A period of backstabbing ensued among the various strong personalities making the deals; the chaos gave rival Creative Artists Associates (CAA) time to grow. CAA had also started in 1975, launched by five former employees of show biz giant, the William Morris Agency. Marvin Josephson, who had put together CMA and IFA to form ICM, was meanwhile acquiring a string of unrelated businesses, looking for a jackpot.

Jeffrey Berg, an erudite English major from the University of California at Berkeley, became president of ICM in 1980. His career had started in the proverbial birthplace of many a life in show business, the mailroom. James Wiatt was named president of the agency in 1985. He had joined ICM as a literary agent in the late 1970s after starting with the Frank Cooper Agency in 1976.

The 1980s were profitable for ICM. Like CAA, ICM captured many prime clients after the 1986 death of William Morris leader Stan Kamen, who had been considered Hollywood's top agent. Revenues for ICM were about $56 million in the 1987–1988 fiscal year.

Private in 1988

ICM was taken private in 1988 in a $70 million management buyout. Josephson remained a minority shareholder after the deal; he and the other executives acquired 60 percent of the company's stock. They carried debt of more than $60 million, financed through Chase Manhattan.

In 1989 ICM signed an innovative five-year production agreement with Glinwood Films, a British sales company. The unique arrangement promised to make major motion picture projects available to independent international distributors, while opening an entirely new source of financing for ICM.

By 1990, ICM was at the top of its game. It found work for some of Hollywood's best-paid actors, talents like Mel Gibson, Eddie Murphy, and Arnold Schwarzenegger, who garnered more than $20 million for his role in Twins and presumably handed over ten percent of it to ICM. The firm also packaged successful television shows such as The Simpsons. ICM reached into several European countries, further geographically than its rivals, as well into more industries, such as theater, book publishing, and network television journalism.

Some insiders said that the agency's very size could work against itself; it was too massive for personnel in the various divisions to be aware of what was going on next door. Others described ICM with a more individualized approach for its clientele. Still, its chairmen at the time, Jeffrey Berg and Guy McElwaine, aimed to make ICM the "Tiffany" of the industry within ten years.

ICM created its own international financial services unit in 1991. Frans J. Afman, a pioneering entertainment banker from Credit Lyonnais Nederland, was picked to head the unit. However, he was gone within a couple of years. Also in 1991, ICM acquired the Fair Warning musical talent agency. It represented rock acts such as Metallica. Three years later, ICM acquired Wasted Talent, which represented rock acts U2 and REM. Later, Wasted Talent was merged with Fair Warning to create ICM International.

The Corporate 1990s

During the 1990s, talent agencies saw their roles expand into corporate marketing. After all, according to Berg, they were specialists in optimizing brand equity. Coca-Cola hired Michael Ovitz, head of CAA, to restyle its image. ICM arranged for Visa's sponsorship of the 1990 Paul McCartney U.S. tour.

ICM moved out of West Hollywood and signed a lease on a Beverly Hills headquarters building in June 1992. There was some consolidation among large talent agencies that October. William Morris bought Triad Artists, while InterTalent prepared to fold. At the same time, ICM was undergoing a management buyout. Berg, Wiatt, Cohn, and McElwaine were acquiring Josephson's majority interest.

The new roles of talent agencies eventually produced some clashes. When Credit Lyonnais, which owned Metro-Goldwyn-Mayer, contracted with CAA to help it dispose of some entertainment properties, Berg claimed the deal produced a conflict of interest. Michael Ovitz denied the consulting arrangement gave his agency any special entrée at MGM.

The Washington Post reported on the new opportunities being created by new media for talent agencies. Banned from producing movies or network television programs due to the antitrust legacy of MCA Inc. (once the largest talent agency in the United States), they could instead develop video games or other multimedia content. While ICM preferred to remain an agency rather than a producer, Berg did posit the company's expansion into different fields of communications. As the Los Angeles Times noted, increasingly sophisticated and lucrative CD-ROM productions were opening new markets for writers, actors, and musicians. This saw ICM and other Hollywood agencies attempting to sell within the computer industry—a vast shift of culture.

As new possibilities arose, ICM negotiated a deal with Random House and Broderbund Software to bring Dr. Seuss to electronic media in 1993. Also, International PCBX Systems Inc. called on ICM to market its audio imaging and data transmission technologies. Additionally, ICM provided celebrity guests for Oldsmobile's Celebrity Circle broadcast on America Online (AOL) beginning in April 1995. Dubbed the first regularly scheduled on-line program, Celebrity Circle, a daily, one-hour program, offered AOL members the chance to ask the star questions.

In the mid-1990s, ICM had 100 agents in Los Angeles and 70 in the New York office, headed by Sam Cohn. In March 1995, ICM fired four LA agents who planned to start their own agency, charging them with trespassing and stealing client files. That same month, pop singer Madonna left CAA for William Morris; four weeks later, she was with ICM. Backstabbing and suspicion were at an all-time high in the talent agency business, reported the Los Angeles Times, which blamed the trend on the huge amounts of money stars could command. Over the preceding months, ICM had lost comedic talents such as Billy Crystal and Eddie Murphy to CAA, while gaining director Renny Harlin and actress Goldie Hawn.

When executives Michael Ovitz and Ron Meyer left CAA to become presidents of the Walt Disney Co. and MCA, respectively, several CAA clients jumped ship to join ICM. Sylvester Stallone did so after Meyer had signed him to a $60-million, three-picture contract at MCA.

Stars capable of attracting audiences both in the United States and abroad were most in demand, since two-thirds of a movie's revenues could be made overseas. International markets were growing as U.S. box office receipts stagnated. By 1996, ICM had offices in London and Paris, joint ventures in Madrid and Rome, and was planning to open branches in Hong Kong and Latin America.

ICM was bringing in commissions worth about $115 million a year in the mid-1990s. The company refinanced its debt with Beverly Hills-based City National Bank, avoiding the need to take on another equity partner.

1998 Management Shuffle

The top ranks at ICM were realigned in the fall of 1998, when Wiatt assumed the titles of co-chairman and co-CEO alongside Berg (who retained his traditional titles minus the "co-" prefix). At the same time, the firm named Nancy Josephson, a daughter of company founder Marvin Josephson, to the first senior management position (co-president) ever held by a woman at a major talent agency. Nancy Josephson had been an entertainment lawyer in New York City before joining ICM in 1986. She was credited with building the agency's TV business, packaging NBC's wildly successful Friends sitcom.

James Wiatt resigned in August 1999, citing differences with Jeff Berg. Wiatt was soon named president of the William Morris Agency, which almost certainly offered him more money than the $1.5 million a year he had been making at ICM, which was still paying down debt from its management buyout. He also reportedly wanted more authority.

Another top agent, David Wirtschafter, left ICM right after Wiatt, and dozens of clients followed. The defections came not long after former CAA head Michael Ovitz, whose tenure at Disney had been short-lived, lured ER creator Michael Crichton and comedian Robin Williams to his own management firm, Artists Management Group (AMG). Wiatt then began an aggressive campaign to attract still more ICM clients and agents to William Morris.

ICM replaced Sam Cohn as head of its New York office with two literary agents in the summer of 1999; however, Cohn remained an agent with the firm. Rival William Morris cut its New York staff in the fall of 1999, a sign of New York's diminishing influence in the film industry. Elaine Goldsmith-Thomas, known for representing Julia Roberts for a dozen years, left ICM in September 2000 to head the New York office of Revolution Studios, a new production venture. Roberts remained with ICM, represented by Jeff Berg.

Principal Subsidiaries:ICM International.

Principal Divisions:Book; Music; News and Business Affairs; Motion Picture; Commercial.

Principal Competitors:Creative Artists Agency; William Morris Agency.

Chronology

• Key Dates:
• 1975: Marvin Josephson forms International Creative Management, Inc. (ICM) out of two talent agencies.
• 1988: ICM executives take the company private.
• 1992: ICM leases a new Beverly Hills headquarters building.
• 1998: James Wiatt leaves ICM; several agents and clients follow.