The Letter That’s Shaking Hollywood : Movies: A million-dollar screenwriter takes on powerful talent agent Michael Ovitz.

For years, former clients and agents of Creative Artists Agency, considered the most powerful talent agency in Hollywood, have privately complained that agency president Michael Ovitz and his underlings have threatened to damage the careers of those who defect.

Now one of Hollywood’s top screenwriters, Joe Eszterhas, has documented his own allegations in a four-page letter to Ovitz, a copy of which was obtained by The Times this week.

“What you were threatening me with was a twisted new version of the old-fashioned blacklist,” Eszterhas wrote to Ovitz in the Oct. 3 letter detailing comments Ovitz allegedly made in late September after the writer announced that he was leaving CAA. “Plain and simple, cutting out all the smiles and friendliness, it’s blackmail. You are agents. Your role is to help and encourage my career and creativity. . . . Your role is not to threaten my family’s livelihood if I don’t do your bidding.”

Copies of the letter have circulated throughout Hollywood and created a stir in the movie industry. Eszterhas, who can command $1.25 million a script, has written such hit films as “Flashdance” and “Jagged Edge.”

CAA, which usually goes to great lengths to avoid allowing the public a glimpse at internal matters, issued a statement to the press and released copies of a letter Ovitz wrote to Eszterhas denying the writer’s version of their meeting.

“When I received your letter this morning, I was totally shocked, since my recollection of our conversation bore no relationship to your recollection,” Ovitz wrote to Eszterhas. “I want to make it eminently clear that in no way will I . . . or anyone else in this agency, stand in the way of your pursuing your career.”

Ovitz declined further comment on Eszterhas’ charges. But CAA agent Ray Kurtzman issued this statement on behalf of the firm: “Joe is a very talented writer. He left CAA and had every legal right to do so. At no time has anyone at CAA threatened him about his career. There is no lawsuit pending regarding his leaving CAA to go to another agency. Assuming Mr. Eszterhas honors his commitment to CAA to pay all commissions due, we fully expect there will be no lawsuit. “

According to his letter, Eszterhas told the CAA president at their September meeting that he was leaving the agency to join his longtime friend and colleague Guy McElwaine at rival International Creative Management.

Ovitz, according to Eszterhas’ account of the conversation, was furious, threatening to sue the screenwriter and implying that he would damage Eszterhas’ relationships with influential Hollywood figures. As Eszterhas left, Ovitz said, according to the screenwriter’s letter: “My foot soldiers who go up and down Wilshire Boulevard each day will blow your brains out.”

The letter again raises questions about CAA’s use of power in Hollywood: Are alleged threats like these made idly in a fit of fury? Or does CAA actually use its influence with major stars and studios to hurt the careers of its enemies, particularly those who have left the agency?

“They are very gracious when they want clients to leave,” said one former CAA insider. “They’ll actually orchestrate (dhe departure). But when they want to keep someone, they can be very unfriendly.”

As reported earlier this year, Ovitz last year fired a friend and colleague of two young agents who left CAA to form a competing firm, InterTalent. The CAA president also has used his influence to try to stop film projects: His attorney threatened to sue the producer of a film he didn’t want to see made, “Wired,” which chronicles the life and drug-overdose death of comedian and former CAA client John Belushi. Last spring, a small production company set to release “Wired” dropped the film, reportedly because of pressure from CAA. The film had a limited release this summer.

Some industry sources argue that because of all the star actors and directors on CAA’s roster, its agents can hurt the career of someone like Eszterhas by making sure their top clients never see his scripts, or by encouraging studios to boycott his work.

Others are more skeptical about CAA’s ability to influence the career of someone of Eszterhas’ stature. “The most precious commodity in this town is a good script,” noted one producer. In fact, Columbia is currently negotiating with CAA client Sidney Poitier to direct Eszterhas’ new script, “Beat the Eagle,” about a Cleveland bar owner who takes on the IRS.

Eszterhas could not be reached for comment. But a source close to him recalls that the screenwriter was seriously shaken up by his conversation with Ovitz and concerned about the impact his defection would have on his career.

In his letter, Eszterhas wrote that he took Ovitz’s alleged threats “very seriously indeed. . . . After three years of searching we bought a bigger and much more expensive house recently. We have decided, because of your threats and the uncertainty they cast on my future, to put the new house up for sale and stay in our old one.” (In a second letter, Eszterhas--clearly furious at Ovitz’s written response to his first letter--reportedly wrote that he and his family would move into the new house after all.)

The screenwriter’s first letter describes in detail Eszterhas’ version of conversations with Ovitz, his principal agent at the firm, and agent Rand Holston, who was brought onto the Eszterhas account less than a year ago, after CAA agent Rosalie Swedlin and Eszterhas parted ways.

“I don’t care if I win or lose,” Ovitz said, according to Eszterhas’ Oct. 3 letter, “but I’m going to tie you up with depositions and court dates so that you won’t be able to spend any time at your typewriter. . . . I don’t care if everybody in town knows. I want them to know. I’m not worried about the press. All those guys want to write screenplays for Robert Redford.”

According to Eszterhas’ letter, Ovitz talked in a “friendly, avuncular way” while mixing praise with threats. “If somebody came into the building and took my Lichtenstein off the wall, I’d go after them. I’m going after you the same way. You’re one of the agency’s biggest assets,” the letter quoted Ovitz as saying.

That same night at Jimmy’s restaurant, Eszterhas wrote, Holston told Eszterhas that if he left CAA, Ovitz would “put you into the . . . ground.” No stars would play in his scripts, Holston allegedly said, and no CAA director would direct his scripts.

Holston also claimed, wrote Eszterhas, that Ovitz would go out of his way to tell studio executives that Eszterhas was difficult to work with. Once studio executives knew that Eszterhas was on the agency’s bad side, Holston allegedly said, they would avoid him “like the plague.”

Making Ovitz’s threats of litigation more specific, Holston allegedly said that United Artists could sue him because his latest script was turned in late, leaving him technically in breach of his contract with the studio.

Through CAA agent Kurtzman, Holston declined to comment.

Noting that he has chosen to live in Marin County, away from the political entanglements of Hollywood, Eszterhas wrote on Oct. 3: “Now I felt, as I told my wife when I came home to think all this over, like an infant who wakes up in his crib with a 1,000-pound gorilla screeching in his face.”