Talent Agencies Find Galaxies Beyond Stars : Entertainment: The top firms are assuming roles ranging from merchandising consultant to merchant banker, in addition to influencing trends in movies, television and music.

When Creative Artists Agency Chairman Michael Ovitz was named Coca-Cola’s pop-culture guru recently, it set off a wave of jokes about other possible talent agency marriages.

International Creative Management, one of CAA’s rivals, could represent 7-Up. Another rival might take on Valvoline. Hardly a company, it seemed, escaped parody.

Ovitz’s ambitious consulting pact with Coke marks the first time that a talent agency has been hired to shape a consumer product giant’s image. But Hollywood’s economic downturn and other developments have led many agencies to branch beyond traditional talent representation.

The top agencies these days function as everything from merchandising consultants to merchant bankers, in addition to influencing the trends in movies, television and music.

International Creative Management put Visa together with Paul McCartney when the ex-Beatle toured America last year. The upcoming Gatlin Brothers farewell concerts will be loaded with marketing tie-ins, courtesy of the William Morris Agency’s new corporate marketing department.

Agents are also finding backers for entertainment projects. Financing for “Columbus”--a saga about the discovery of America that is one of next year’s most ambitious movies--was secured, in part, by an agent.

The value placed on celebrities is partly responsible for the increased leverage of agents. In a star-fixated world, they control the heavens.

The agency business has also become more sophisticated. Most agencies are loaded with lawyers, accountants and MBAs capable of doing far more than the old-line tasks of booking concert tours, making book deals and securing movie and TV parts for their clients.

Agencies may have changed for good in the 1950s, when powerful MCA Inc. evolved from a talent agency into an entertainment conglomerate. Eventually, the Kennedy Administration forced MCA to divest itself of its talent business because of antitrust concerns.

Another advance was the creation of “packaging” deals--a product of the early days of television--in which agencies are paid for assembling the talent for a project.

In the advertising arena, agents contend that they are uniquely qualified to match big business with big stars--a role that advertisers historically have played. The public may recoil from the further commercialization of pop culture. But the mating dance between corporate America and Hollywood appears to be more passionate.

“Major corporate advertisers are slowly shifting from advertising to promotion,” said Bob Kachler, director of corporate marketing for the Beverly Hills-based Morris agency. “And with a tour, they know who the audience is going to be. We match them with the best client for their needs.”

Morris used to play a passive role in corporate sponsorship deals. Now its corporate marketing team takes the lead in matching companies with performers.

Los Angeles-based ICM has a commercial division staffed by agents in Los Angeles and New York that deals directly with advertising agencies and major companies. The department occasionally proposes its own marketing ideas. It also keeps its clients abreast of up-and-coming acts.

CAA gets more attention for its consulting work with companies than its talent deals these days. It is also heavily involved in endorsements and other business.

Although some performers will not consent to sponsorships, the money can be persuasive. Visa reportedly paid millions of dollars--10% of which went to ICM--for the right to sponsor the McCartney tour.

The 1992 Gatlin Brothers tour will be a bonanza for the Morris agency. Morris has already matched the country superstars with an undisclosed sponsor. A merchandising program, including medallions and belt buckles from the Franklin Mint, is planned.

In addition, Morris has geographically organized the tour to appeal to regional sponsors. “Part of the tour is being driven by corporate marketing needs,” Kachler said.

In diversifying their services, most agencies have remained close to their entertainment roots. Creative Artists Agency’s Ovitz is the only one who’s ventured so far beyond. He brokered the sales of Columbia Pictures Entertainment Co. and MCA Inc. to the Japanese. CAA consults with Apple Computer and Paramount Communications Inc. in addition to Coke.

Beverly Hills-based CAA has yet to specify what it is supposed to do for the soft drink company. It has offered about 50 marketing ideas to Coke. People close to the firms say the concepts won’t be publicized until next month.

Ovitz tends to stir strong emotions in rival agents. Charles H. Stern, who has a Los Angeles agency, recently asked the state Division of Labor Standards Enforcement, which licenses talent agents, to determine if Ovitz’s dual representation of talent and its employers constitutes a conflict of interest. CAA denies the allegation.

Others downplay the significance of Ovitz’s far-flung business activities.

“We want to remain in entertainment. We don’t want to sell soda pop,” one agent remarked when asked if other agencies might try to mimic the CAA-Coke deal.

But further diversification appears likely, even among smaller firms. Triad Artists Inc. is active in arranging foreign financing and multiple-partner production deals.

The Los Angeles firm also matches corporate sponsors with its music acts. Peter Grosslight, a partner in the company, said such activities are a small but growing part of the business. “Everyone is looking for opportunities,” he said. “We are always changing.”

With Hollywood reeling from one of its worst slumps in recent memory and lenders tightening credit, some agencies see undertaking a merchant-banking role as one survival tool.

ICM underscored the importance of merchant banking recently when it hired Frans J. Afman--a former banker and consultant to Hollywood companies--to head a new financial services unit. Afman’s job is to scour the globe for money to fund projects featuring ICM’s clients, who include Eddie Murphy, Arnold Schwarzenegger and Mel Gibson.

Morris and CAA, along with several smaller agencies, also have fund-raising divisions. Agent John Ptak, who works at CAA, helped launch Ridley Scott’s production of “Columbus” by attracting foreign investors to the movie.

Chet Migden, executive director of the Assn. of Talent Agents, said fast-moving changes in the media business have forced another round of changes in talent agencies.

“The general public,” Migden said, “has always had a more confining definition of what talent agents do than is really the fact.”