Inside the Agency : How Hollywood works: Creative Artists Agency and the men who run it

Interviews don't come easy to Michael Ovitz.

Even in his private sanctum, flanked by a pair of colleagues, safe beneath the dual gaze of Buddha and Marilyn Monroe--totemic bits of art on a movie maker's wall--the sandy-haired president of Creative Artists Agency is wary and tense and never stops wishing the limelight would go away.

"This is not a comfortable experience for any of us," he says, his hoarse voice so low a reporter's recorder barely registers.

"We really function behind the scenes. . . . If we could convince you not to do this article, that would make us the happiest guys in town."

Apparently, however, the limelight is here to stay for CAA. With the business of Hollywood getting more attention than ever, CAA is encountering more and more curiosity about how the agency, in effect, makes movies before they get made.

Founded 14 years ago by a group of dropouts from the 90-year-old William Morris Agency, CAA has become one of the most powerful, and least understood, show business institutions since the old MCA Artists talent agency was broken up under a federal consent decree nearly 30 years ago.

The measure of CAA's strength is its list of about 600 clients, including an extraordinary concentration of "bankable elements," the big-name talent that gets films and TV shows made. The agency's directors roster--which ranges from Martin Scorsese and David Lynch on the artier side to Ron Howard, Robert Zemeckis, Sydney Pollack and Barry Levinson among the hit makers--is widely regarded as the best in Hollywood.

And its stable of stars, if starting to gray just a bit, is unmatched. Among the top names: Dustin Hoffman (last year's Oscar winner for best actor), Tom Cruise, Robert Redford, Paul Newman, Gene Hackman, Sally Field, Sylvester Stallone, Bill Murray, Dan Aykroyd, Kim Basinger, Barbra Streisand, Chevy Chase, Robert De Niro and Glenn Close.

Contrary to myth, CAA doesn't control a preponderance of talent in moviedom. Despite the agency's triumph with Oscar winner "Rain Man," a pet project, three out of five recent Academy Award nominees for best actress--Sigourney Weaver, Meryl Streep and winner Jodie Foster--are represented by rival International Creative Management, which also has Eddie Murphy and Arnold Schwarzenegger. William Morris, though its movie operation is widely claimed to be sagging, still represents stars as big as Tom Hanks and Clint Eastwood; and Triad, Bauer Benedeck, Leading Artists, InterTalent and other agencies all handle important film clients.

But CAA is stronger than its competitors, and probably stronger than any studio, because of the peculiar ferocity with which the 42-year-old Ovitz and his two co-owners--actors' agent Ron Meyer, 44, and TV agent Bill Haber, 47--patrol the wide swath of Hollywood they have claimed as their territory.

As students of Japanese management techniques, they teach fellow agents to suppress individual ego, Hollywood's bane, in the service of the agency and its clients. As consummate insiders, they despise publicity and often conceal their methods from even close associates in the tiny community of deal makers.

Yet Ovitz, Meyer and Haber--after months of negotiation--agreed to discuss at least some facets of their business, largely, they say, to avoid misimpressions that might be conveyed by other sources interviewed for this story about CAA's rise to prominence.

As Ovitz sees it, CAA grew simply because it was better than others at helping the talent realize its ends. In his words: "Every client has something he wants to do. They all have a passion about it. So our job is to take the client's passion and to . . . extend it into reality."

Yet the power to make dreams a reality didn't come without some rough-and-tumble.

In the beginning, there was no talent to serve. When Ovitz, Meyer and Haber--together with Michael Rosenfeld and Rowland Perkins--left Morris to found CAA on Jan. 20, 1975, none of the big agency's stars followed immediately.

By Meyer's recollection, four clients had promised to come with them and then broke their commitments. The first of about 90 clients who did come aboard during the next year or so were solid, but hardly superstars, and they clearly reflected the fact that all five of CAA's young founders came from Morris' television department. They included Jack Barry, who produced game shows, and Bill Carrothers, who produced the "Odd Couple" and other shows, along with Rob Reiner, Sally Struthers, Ernest Borgnine, Talia Shire and Barry Levinson (the future director of "Rain Man," then a young television writer).

The agency was born almost by accident. According to Meyer, he and Ovitz, dissatisfied with their career prospects at Morris, had decided to leave independently of the others and were surprised to learn that a second secession was under way. "For about two seconds, there were two groups," he says.

The birth was accompanied by a sense of betrayal. Someone advised the Morris elders that the younger agents were planning to leave, and all five were pushed out before they had a chance to quit. Ovitz believes that one of two banks from which the group sought financing was responsible for the betrayal, but Meyer continues to believe that one of two peers at the old agency--he won't name them--may have sold out the secessionists.

By some accounts, CAA would act harshly 14 years later to protect itself from a similar rebellion. When two young agents, Judy Hofflund and David Greenblatt, left in February, 1988, to found competing InterTalent, Ovitz subsequently fired their friend and fellow agent, Tom Strickler. Strickler has declined to discuss the matter. Reports on whether Strickler's dismissal was related to the secession vary, but one agent friend says Strickler did nothing worse than fail to inform Ovitz of the impending defection.

Ovitz says he wishes InterTalent well, but he declines to discuss the firing. Haber says: "I have no objection that they left the company to form another agency. You have to realize that we set the example, and it may happen to us again. . . . What I regretted was the way they went about leaving. I don't believe it was done with any sort of honesty or decency."

Greenblatt and Hofflund declined to comment, but an executive who has dealt with both says, "Their reputations were of the highest order before, and have only increased since."

As Ovitz and his partners see it, their own fledgling agency was targeted for extinction by competitors. "From the day we went into business, the large agencies came after us," recalls Meyer. "William Morris very much came after us. CMA (a predecessor firm to ICM) came after us."

CAA fought back by raiding clients from the bigger rivals and merging with a company owned by veteran agent Martin Baum, who brought the young agency its first significant movie clients, including Sidney Poitier and Peter Sellers in 1977.

The little agency also took the audacious step of slashing certain fees--a move that provoked considerable bitterness among competitors.

CAA's partners maintain that they have never discounted the traditional 10% client's commission, despite frequent claims to the contrary by outsiders. "We never, ever cut personal service commissions for anyone," says Haber. But they freely admit having slashed the customary fee for "packaging" TV shows--that is, assembling all the elements, including writer, producer and stars--from the customary 10% to 6% of a show's total revenue.

Clearly, that "drastic move," as Ovitz calls it, helped CAA to become a major packager of prime-time television series in the 1980s. The agency has never dominated the networks in the way of MCA, which had a major stake in 45% of the shows on prime-time TV at its peak as an agency-production company combination in 1960. But CAA has done rich business with such packaged series as "ALF," "Golden Girls," "Beauty and the Beast," "Empty Nest" and "Hotel."

CAA also prospered in the 1980s as a miniseries factory, thanks in part to Ovitz's early alliance with New York literary agent Morton Janklow, who delivered the work of such big-name authors as Sidney Sheldon, Jackie Collins and Judith Krantz for TV packaging by Haber.

In contrast to Morris and ICM, which have their own book departments, Ovitz says he has "many" similar relationships with New York agents. Virtually none of those ties are contractual. "All of our relationships are handshake and personal. Not one piece of paper is exchanged," says Ovitz. All of them turn on the notion that CAA, which doesn't compete for book commissions with the New Yorkers, can best serve authors by finding the TV- and movie-compatible elements in their work. CAA then attaches the books to directors or stars who can make the projects happen. Ovitz calls them "the motor."

This concept of "the motor" has become central to CAA's approach to entertainment.

Instead of allowing a star or director or piece of material to sell itself, Ovitz tries whenever possible to match these elements in potent combinations that can drive themselves through the rigors of the studio or network system. As Ovitz explains the system, insofar as movies are concerned:

"(The clients) become the motor, and we really are like the body around the car. We try to shape it with them. But they make the choices. We make suggestions, there's no question. But we never make singular suggestions. We suggest alternatives. If there's a director, we suggest an actor. If it's an actor, we suggest a director. If it's just an idea and an actor, we'll suggest a writer. . . . You see the permutations."

While much of the agency's business is routine--a fair number of its 600 clients will simply want work, somewhere, at any given moment--the projects that truly consume CAA are such high-horsepower films and TV shows that link at least two clients.

Thus, the agency became deeply involved with "Rain Man," as Dustin Hoffman became the motor for an intriguing project that might never have survived the studios if the actor hadn't attached himself to the script, and to CAA client Levinson as director, along the way.

Looking forward to another client-driven film--Ovitz deflects the word "packaged," fearing it might falsely indicate that the agency takes a cut of the movie's revenue--is a future Bill Murray comedy called "Quick Change."

Murray came across a book that interested him nearly 2 1/2 years ago and brought it to the agency. CAA, according to Ovitz, collectively "made an assessment" of the material and eventually matched Murray with writer Howard Franklin ("Someone to Watch Over Me"), another CAA client.

The two worked on a script for a year and a half, and Murray, again with counsel from CAA, decided to co-direct the film with Franklin, well before any studio had become involved. One studio chief now says that Warner Bros., Disney, Universal and Columbia have all been eager to acquire the project. Ovitz will say only that Murray will choose his studio deal in the next few weeks--while still in the glow of his "Ghostbusters II" success, as it happens.

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While relentlessly forging links among material and stars on the inside, CAA has turned its outside relationships into a network of alliances that now includes far more than the New York literary agencies and appears to give it a strength considerably in excess of its size.

Ovitz specifically disavows the notion--which is widespread in Hollywood--that his agency enjoys special relationships with various businesses that range from studios and production companies to law firms, business managers, publicists and even real estate brokers and car salesmen. "Our business is spread evenly throughout this entire community, at every network, every studio, every syndicator," he says.

Yet a number of friends and former associates of CAA, most of whom declined to be quoted by name, say that its loyalty network is extensive. One of the tightest connections, for instance, is the agency's close relationship with the entertainment law firm of Armstrong, Hirsch & Levine, which is headquartered four floors above the agency.

Both CAA and law firm associates say there is a strong convergence between CAA's top film clients--Robert Redford, Sally Field, Sydney Pollack, Barbra Streisand, Goldie Hawn, Tom Cruise, Barry Levinson, Kim Basinger, Sean Penn and Jeff Bridges among others--and the movie roster serviced by Armstrong, Hirsch & Levine's 55-year-old partner, Barry Hirsch.

The match-up is no accident. In CAA's early days, according to former CAA employees, Ovitz and company, desperate for business, cultivated Hollywood's entertainment lawyers as a then-undervalued source of information and clients. Morris had seemed downright hostile toward outside attorneys and kept its own in-house legal staff. CAA had no staff and supposedly saw kindred souls in the so-called "5-percenters," a generation of hungry young lawyers--Hirsch, Thomas Pollock, Jackob Bloom, Peter Dekom, Kenneth Ziffren, Harry (Skip) Brittenham--who shied away from litigation and focused on deal-making in return for a percentage of the client's take.

Today, CAA enjoys particularly solid ties with several firms, including Bloom and Dekom, which represents mutual client Sylvester Stallone; with Ziffren, Brittenham & Branca, a TV powerhouse that helped package "Golden Girls" and other hits; and with Silverberg, Katz, Thompson & Braun, which represents Donald Sutherland, Jessica Lange and other CAA clients.

But the Armstrong, Hirsch relationship stands out, possibly because, by some accounts, Ovitz helped to "package" the firm itself. Hirsch declines to comment on his firm's ties to CAA. But Ovitz--while contending that CAA deals extensively and on an equal basis with a wide range of law firms--does concede having introduced Hirsch to his fellow co-founder, Gary Hendler, who then represented Robert Redford.

(Hendler left the firm after its founding to become the first head of newly formed Tri-Star and quickly installed Ovitz client Sydney Pollack as the studio's "creative consultant," a novel position for a Hollywood director.)

Among the studios and production companies, the agency's relationships seem to shift as executives move and as the relative strength of the players changes.

At this hour, the conventional wisdom says that Universal chief Thomas Pollock is closely in tune with the agency, hence his relatively smooth business with CAA stars Chevy Chase ("Fletch Lives"), Jim Belushi ("K-9") and Ivan Reitman ("Twins.")

Price-conscious Disney is occasionally aloof from CAA, despite chairman Michael Eisner's close friendship with Ovitz, and Paramount is still feeling its way with the agency, since Sidney Ganis assumed the movie chief mantle several months ago from Ned Tanen, who was an on-again, off-again friend of CAA.

Warner Bros. is perennially in tune with Creative Artists, according to Hollywood lore. "If you need something from (Warner chairman) Bob Daly, you go to Mike (Ovitz)," explains one big producer.

United Artists was a CAA hot spot under the regime of Tony Thomopoulos, hence its backing for "Rain Man," perhaps the agency's proudest project to date. But sister studio MGM was cool under Alan Ladd Jr., and MGM/UA is presently on hold while new owner Christopher Skase seeks financing to close his prospective purchase of the studio.

Fox blows hot and cold under Barry Diller, who has experience and star relationships that let him sidestep the agency's most expensive propositions.

Columbia/Tri-Star, meanwhile, is very hot, as the Victor Kaufman-Dawn Steel regime works to mend fences after former studio chief David Puttnam's disastrous war with CAA.

CAA apparently takes out a bit of insurance on such relationships by helping, on an informal basis, to broker recently unseated studio and network executives into new jobs or movie production deals--much as it helped Tony Thomopoulos, by his own account, become a producer at Columbia after he left United Artists in a management shake-up.

The agency's partners explain the practice, which almost certainly isn't unique to CAA, as an element in their loyalty to the entertainment industry at large. Haber says: "If you like a human being as a person when they're working, why wouldn't you like the same person when he's not working and help him to work again?"

Meyer says of the agency's informal employment service: "It's a small town. It's a company town, so everybody is somehow connected. We're all in this together."

Nowhere, apparently, do things come together quite so intimately as with some of the smaller movie and TV production companies with which CAA does business.

A prime example is Imagine Film Entertainment, one of the agency's closest allies. Ovitz represents director Ron Howard, the company's co-founder, and also represents the company itself. Universal, clearly tight with CAA, owns rights to a 20% stake in Imagine. Indeed, Universal's Tom Pollock helped set up Imagine when he was still practicing law in 1985 and sat on its board until relinquishing his position to ex-law partner Peter Dekom when he moved to the studio.

Ovitz describes his own position, on which Imagine executives decline to comment, as that of a consultant. "We set up an architectural plan at the beginning to build the house. They decide what kind of house they want, and we just work with them."

One individual familiar with Imagine's operation says the company gets a week-end jump in reviewing six or so major new screenplays or books that CAA circulates each week. "The material will generally come in on a Friday. It usually won't circulate elsewhere for the next week."

Ovitz says Imagine does see "a lot of material," but only when it is consistent with the company's tastes and plans.

The building directory at CAA includes 69 agents. They are listed alphabetically, without corporate titles. Thus, agency president Michael Ovitz is discreetly hidden among dozens of field agents who are virtually unknown outside the tight circle within which they operate.

On the 14th floor, where the agency is situated, the pace is frenetic. CAA feels like a sequence from "L.A. Law," with action on multiple stages, the petty intrigues swirling through layers of genuine warmth. Agents drop in and out of meetings with visitors, trading gossip and ideas.

Ovitz, the Zen master, insists on communal effort. He says he has studied Oriental philosophy and Japanese management techniques and sees nothing alien in the Eastern, all-for-one and one-for-all approach to business. "When you cut it away, I don't think it's any different from what was created in this country at the turn of the century," he says.

Near the elevator is a plaque that is supposed to enforce the agency's ethical imperatives. Beneath the portrait of a balding, kindly appearing gentleman, it reads: "To Phil Weltman, who taught us the meaning of integrity and self-respect, we dedicate this agency."

Weltman was in charge of the television department and agent training at Morris and remains a father figure to Ovitz, Meyer, Haber and other senior agents at CAA. According to agency lore, the middle-management rebellion in which CAA's five founders left Morris was partially sparked when senior Morris partners forced the beloved Weltman to take early retirement. In Haber's words: "We say, partly seriously, partly not, that if Phil Weltman was still there, we would be there. None of us would have left him."

Though CAA and Ovitz have been thrust into the limelight, very few of the agents seem to crave recognition from the outside world. One of the brightest operatives is Jack Rapke, a 39-year-old movie agent who represents such premium film directors as Zemeckis and Brest. In 1986, Rapke was offered a position of immense visibility and power as the heir-apparent to Paramount movie chief Ned Tanen. He turned it down, to continue laboring in relative obscurity at CAA.

The agents sometimes seem colorless and even, in the words of persistent CAA gadfly, Spy magazine in New York, "personality-free." That is partly by design. Ray Kurtzman, another Morris veteran who helps supervise trainees, has been known to warn a newcomer: "You have too much personality."

Personal quirks are supposedly the prerogative of the stars. One exception is Haber, an offbeat character who used to start his Friday mornings with an 8:30 violin lesson. Even Haber acknowledges that he conducts business with a certain flair. He says, for instance: "I have on certain occasions said I am the greatest agent in TV history . . . because I am, and I never mind the truth."

Ovitz, politically active and numbered among the country's top 100 private art collectors by Art & Antiques magazine, is plainly irritated by the notion that his agents are work-obsessed, Hollywood zombies. "We encourage all our agents to grow as human beings and to have outside interests aside from the entertainment business," he says.

Occasionally, however, those interests closely mirror his own. Some young agents collect contemporary art, and others are strong backers of Sen. Bill Bradley (D-N.J.), an Ovitz favorite, according to agency insiders.

The pay is good. While Ovitz declines to discuss it, agency veterans say it starts at about $35,000 for fledglings, then rises to $1 million or more for senior agents. (Ovitz also declines to discuss agency finances, and the stock buyouts of previous partners that left him in control of 55% of the agency, with Haber and Meyer splitting the rest in equal shares.)

The road to the top at CAA begins in the mailroom just as it did for Ovitz when he joined William Morris as a mailroom assistant just out of UCLA. About 30 trainees--some the sons and daughters of Hollywood insiders, others from Ivy League schools such as Harvard and Yale, where interest in Hollywood blossomed during the '80s--are expected to learn "the town" through a combination of osmosis and regimented schooling.

Trainees have traditionally worked cheap--for about $900 a month a few years ago--and used their own cars on a grueling daily round of deliveries to the studios, law firms and stars' homes. Like boot camp, in fact, the mailroom is supposed to teach newcomers who's who in Hollywood, while instilling them with the agency's peculiar code. ("If you leave Creative Artists, we sit shiva for seven days . . . and then you die" is how a company executive explained CAA's preference for lifelong loyalty to one young trainee.)

Trainees learn to make movies and TV shows the CAA way by participating in what is known as the "secondary creative group," a forum in which they devise ideas for pictures and shows and pass them to the primary agents--"so they can be trained by their rejection as well as their acceptance," says Ovitz.

Mailroom trainees also learn something about the mutual back-scratching and stroking that keep the Hollywood system greased. At Christmas or when a picture starts shooting or when a particularly important deal closes, the assistants deliver elaborate gifts to clients and friends of the agency.

"These are big, expensive presents. We would deliver 50 stereos or CD players at a time," says one ex-trainee. ("It's a fraction of what they do," comments Meyer.)

But some of the most important lessons may touch on the art of war--how to defeat a perceived enemy--as practiced by aikido enthusiast Michael Ovitz. CAA can be harsh in its dealings, as witness the freeze that descended on Lorimar when the agency fell out with Bernie Brillstein, then chairman of its movie unit, which was later folded into Warner Bros.

Brillstein, now a manager-producer, says the feud--which is over--developed over a number of issues, including his refusal to let Ovitz negotiate his contract when he took his job as chief executive of Lorimar's newly formed movie unit.

As relations deteriorated, according to one ex-CAA employee, Ovitz told him that Lorimar should "get nothing" when it came to circulating material to production companies. The Lorimar film production team, minus Brillstein, tried to break the freeze with a luncheon at the agency. Studio executives rambled on about their movie development plans. But the CAA agents, on instructions from Ovitz, kept silent.

Ovitz, who maintains that the Brillstein issue has been "discussed to death" already, says: "I think there was no question that this company's relationship with Lorimar was strained. But it didn't stop us from doing our day-to-day business."

Still, a CAA grudge, once lodged, can last for years. Movie producer Jay Weston ("Lady Sings the Blues"), for instance, made the mistake of suing the agency in 1979 over a film rights dispute with his brother, who happened to be represented by CAA. Weston--one of very few individuals in normally litigious Hollywood to have sued CAA--eventually dropped the claim insofar as the agency was concerned, but one young CAA employee recalls being warned at least six years later against dealing with the producer: "He was totally ostracized."

Weston says the agency appeared to do its legally mandated duty by passing his offers along to its clients but was otherwise unaccommodating for years. "I regret more than anything else in my business life the mistake of suing CAA. They are the best agency. . . . I have nothing but admiration for them."

Haber says CAA's TV department is currently discussing projects with Weston, and Meyer says the company always took his film projects "as seriously as we would anyone."

But Ovitz adds: "He sued us at a time when we could not afford to be sued, and it cost us an enormous sum of money to defend ourselves on a claim that he subsequently dropped. It would be less than honest to say there were not bad feelings about it."

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Among CAA-watchers, a favorite question of the moment is "What next?"

Some close observers maintain tha CAA can't continue to grow at its past rate without risking client discontent and can't branch into film and TV production without breaking guild rules and risking the sort of government antitrust actions that dogged MCA during its heyday as a talent agency.

Yet the risk of standing still is also enormous, because the treacherous psychology of agency dominance requires hot, new signings to keep old workhorse clients in line. "Any agency is a pyramid, like a Ponzi scheme," says a CAA competitor. "You need to keep signing the hot new faces, the flavor of the month, so the old ones will continue to believe they're in the right place. CAA just got Kevin Costner from Morris, so Sydney Pollack has to think, "Yes, this is the best agency."

It's never comfortable to lose valued clients, and CAA has taken some losses. In the last year or so, actor Tim Hutton and directors John Milius, Stan Dragoti and Tom Manckiewicz defected to ICM, while Emilio Estevez, Kiefer Sutherland, Laura Dern, Shane Black and a handful of others jumped with their agents to InterTalent.

Ovitz, who has already developed a substantial music industry business, also points with pride to a recent Vanity Fair story that detailed a high-powered negotiation in which he matched Lakers star Earvin (Magic) Johnson with Pepsi. But he disavows reports that he is cooking up plans to represent high-profile artists. Asked where the agency's next plateaus lie, he only says: "We're analyzing different options right now."

Haber maintains that to keep up with changes in the entertainment business may be occupation enough for CAA. "This industry is changing around us at a meteoric speed," he says.

But Ovitz appears to have something more in mind than simply defending his franchises.

In concluding CAA's annual corporate retreat at the La Costa resort a few weeks ago, Ovitz is said to have whipped his agents into a frenzy of enthusiasm with a speech about the agency's prospects. "You are on a fast-moving train, and you'd better hold on for the ride of your life," he said, according to one account.

"We're going places you never dreamed of."

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