Deal May Put Ovitz at Top of Hollywood’s Hierarchy

In the Hollywood hierarchy, MCA Inc. Chairman Lew R. Wasserman has long exercised a rare kind of authority. He was the first “super-agent,” a confidant of presidents, a political power broker and the man labor unions often sought out to resolve their most intractable disputes.

On Monday, as the $6.59-billion sale of MCA to Matsushita Electric Industrial Co. was marked with a champagne toast and a round of applause, the torch may have been passed.

Creative Artists Agency Chairman Michael Ovitz, who brokered the MCA deal and stood behind Wasserman as the agreement was signed, is the first person since the MCA chairman to transcend the super-agent role. With his influence seemingly reaching into every corner of the entertainment industry, Ovitz may now stand alone among Hollywood’s power elite.

The future of other figures close to the MCA deal is cloudier. Power shifts in Hollywood are like earth tremors. Everyone feels them but no one quite knows what they mean. At 77, Wasserman will remain MCA’s chairman for the time being, but sources contend that his influence is already diminished. MCA President Sidney J. Sheinberg may also suffer fallout from the sale, since some knowledgeable individuals say he has privately expressed the intention to follow if Wasserman leaves.

On the other hand, David Geffen, who recently sold his record company to MCA, is seen as a big winner because the value of the MCA stock he acquired has since nearly doubled, to $710 million. He has even been mentioned as a possible successor to Wasserman.

With his close links to Matsushita, Ovitz has also been linked to Wasserman’s job. Many in Hollywood are willing to bet their Nautilus machines that Ovitz will take the helm at MCA within two or three years. “This is his exit visa” from Creative Artists, said one industry source.

But others close to Ovitz insist that his power base will remain at CAA, where he enjoys autonomy and the ability to pick and choose his activities. “Michael is the guy in the middle who is making the deals happen,” said one close source. “He’s taken the agent’s normal role and elevated it to a whole new level. It leaves everyone else in the dust.”

Whatever his future holds, people close to Ovitz say he is clearly anxious to accept the mantle of Hollywood’s leading statesman and power broker. Yet Wasserman will be a tough act to follow.

A tall, slender man known for his thick mane of gray hair and wide tortoise-shell glasses, Wasserman has had an enormous impact on Hollywood. As an agent, he was among the first to fully understand how government antitrust decisions and the rise of television would destroy the contract studio system and disperse power into the hands of talent agents. In 1949, he negotiated the first deal giving an actor--in this case, James Stewart--a percentage of a film’s gross receipts. The financial clout of Hollywood stars has risen steadily ever since.

In 1952, as part of an agreement with the Screen Actors Guild that allowed MCA--then a talent agency--to move into TV, Wasserman became the first producer to agree to pay out residuals on rebroadcasts of shows. As a result, thousands of television actors, producers, directors, writers and others now receive a check every time their shows are rerun on television.

Wasserman also demonstrated impressive financial judgment when he bought the Universal lot in 1958 for just under $12 million. A nearly bankrupt Universal was reeling at the time from budget overruns on Stanley Kubrick’s “Spartacus.” Four years later, MCA bought Decca Records Inc., the parent company of Universal, and moved into movie production. With the Decca purchase, MCA was forced out of the talent agency business. Yet revenues continued to grow. At one time MCA’s reach was so vast it was nicknamed “the octopus.”

Ovitz, 43, has never run a studio. He also lacks Wasserman’s political clout. Whereas Wasserman counted Presidents Johnson, Carter and Reagan--a former client--among his personal friends, Ovitz has been slow to expand his professional contacts beyond Hollywood.

Ovitz’s co-sponsorship of a dinner last year for New Jersey Democratic Sen. Bill Bradley, who is a possible presidential hopeful, reportedly came at the urging of Walt Disney Co. Chairman Michael Eisner. Ovitz’s other big political plunge was on behalf of the “Big Green” environmental initiative, which California voters resoundingly defeated this month.

At the same time, Ovitz arguably is every bit as innovative as Wasserman when it comes to the art of the deal. Sony Corp. and Matsushita both turned to Ovitz when they were shopping for major Hollywood studios, and in both cases he was able to secure highly lucrative agreements.

His company is also widely credited with perfecting the concept of “packaging” talent for television and movies. CAA realizes enormous fees from its television deals and was responsible for assembling the casts for “Rain Man” and other films. The firm’s top clients include screen stars Tom Cruise, Dustin Hoffman, Robert Redford and Jane Fonda and director/producer Steven Spielberg.

One key question is whether Ovitz will now find his role as Hollywood’s most powerful representative of talent and corporations incompatible.

Already, some members of Hollywood’s creative community have expressed concerns about Ovitz’s role in MCA’s purchase. “Is he going to have an ongoing role with MCA? It’s something you have to ask yourself,” said one major film producer who declined to be identified.

Others have questioned whether Ovitz’s access to MCA during the deal may have provided him with information normally unavailable to an agent. But Sheinberg said in an interview that “Mr. Ovitz didn’t get involved in any of that, and this transaction didn’t involve any of that.”

Labor relations are another question mark on Ovitz’s resume. In his heyday, Wasserman was well known for his ability to create a consensus when the heads of various companies met for policy decisions, primarily through their labor-bargaining alliance, or through the Motion Picture Assn. of America. Wasserman was as well known for urging company concessions in the interest of peace as for hanging tough.

Ovitz tried to devise a solution to the protracted 1988 Writers Guild of America strike, but failed. An extremely private man, Ovitz apparently lacks Wasserman’s engaging personality and appreciation for compromise. But people close to him say that may change.

“He’s only 43,” said one top entertainment figure. “Give the guy some time.”

Times staff writer Michael Cieply contributed to this report.