Sharing Steve :: New Stuff
Tuesday, August 14, 2007
Steve's agent, Ed Limato, able to change agencies and take clients
Hollywood Agent Wins the Right to Join Rival
By BROOKS BARNES
New York Times
Published: August 14, 2007
LOS ANGELES, Aug. 13 — A Hollywood employment dispute ended Monday when an arbitrator decided that Ed Limato, a longtime agent for stars like Steve Martin and Mel Gibson, could leave International Creative Management for a rival and take his clients with him.
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Ed Limato, left, represented the comedian Steve Martin, right, and other celebrities at International Creative Management.
The arbitration, conducted by a retired state judge, was private but legally binding. The agency and Mr. Limato, its former co-president, were locked in a battle over whether the agency could block Mr. Limato’s departure after demoting him last month. The venerable agency no longer wanted Mr. Limato in a management role, but it wanted his roster of clients.
“The arbitrator’s decision to allow Ed to end his contractual obligations was based solely on an overly technical interpretation” of California’s labor code, Richard B. Levy, the talent agency’s general counsel, said in a statement.
Mr. Limato’s lawyers, Tom Hansen and Miles Feldman, could not immediately be reached for comment.
In the entertainment business, big contract battles come and go on a regular basis. But the legal wrangling between Mr. Limato and I.C.M. underscores how the financial retrenchment under way in Hollywood is upending the industry’s unwritten codes for conducting business.
Mr. Limato, 71, with his outsize personality, formal dress and lavish Academy Awards parties, has become something of a legend in the motion picture industry. In the past, he would most likely have been able to write his own ticket for as long as he pleased, because of his decades of service and the millions of dollars in profits his clients regularly delivered.
But as budgets for movies balloon and the Internet whittles away at box-office returns, the agencies have come under attack and are operating on tighter budgets. I.C.M. in particular, which sold a majority stake to Merrill Lynch and a Connecticut-based private equity group last year, is trying to control expenses.
The agency tried in recent months to move Mr. Limato away from daily management and into an emeritus-type position, something that would have stripped him of certain perks, like multiple assistants, but would have allowed him to keep direct involvement with his clients. The move would also have consolidated the power of Mr. Limato’s co-president, Chris Silbermann, 39.
Mr. Limato refused, according to both sides.
So I.C.M., which last year paid $70 million to acquire Mr. Silbermann’s television agency, the Broder Webb Chervin Silbermann Agency, decided in July to demote Mr. Limato, couching the decision in a news release as “a restructuring of I.C.M.’s motion picture department to deliver long-term growth.” The decision to trumpet the move — agencies are notoriously tight-lipped — stunned the industry.
The legal spat turned on a California statute that dates to the era of Hollywood’s star system, a time when studios controlled actors under long-term contracts. Boiled down, the 1931 law says that a personal services contract may not be enforced beyond seven years. The actress Olivia de Havilland used the seven-year rule in 1944 to void her contract with Warner Brothers.
I.C.M. lawyers argued that they were seeking to enforce a new contract that Mr. Limato signed last year. Mr. Limato’s position is that a series of contracts without any break is the same thing as one long contract. Since he worked continuously at I.C.M. since 1988, parts of his contract were void under the seven-year rule, Mr. Limato’s lawyers argued.
The agency has much at stake. Although a powerhouse in television, I.C.M. is struggling to maintain a toehold on the movie side. As more powerful rivals lured clients like Julia Roberts over the years, I.C.M. failed to attract replacements of similar caliber.
I.C.M. is hopeful that at least some of Mr. Limato’s clients will stay behind. Although none have given hints of their plans, most have worked with Mr. Limato for the bulk of their careers and are expected to remain loyal to him.
Losing Mr. Limato’s clients could lead to the defection of other I.C.M. agents and actors and — because stars like to be around stars — would probably make it harder for the agency to rebuild its motion picture department.
The battle at I.C.M. has been unusually divisive in Hollywood, with factions lining up on both sides and blogs like Deadline Hollywood Daily chronicling the twists and turns in minute detail. In one corner are traditionalists who cite the industry’s habit of treating its atavistic executives with high respect, whether deserved or not. Others see a twist on “Sunset Boulevard,” in which a star agent cannot let go.
Generational shifts at Hollywood’s talent agencies are typically rancorous. In 2004, William Morris endured agent defections and firings after a rift on the board over the company’s direction. Creative Artists Agency, now Hollywood’s most pre-eminent talent representative, weathered a similar storm in 1995, when three of the agency’s founding partners left.