COMPANY TOWN : CAA Gets in Fast Lane by Hiring AT&T; Media Exec

In a bold and surprising move that acknowledges the rapid convergence of entertainment and technology, Hollywood’s Creative Artists Agency on Thursday hired AT&T; multimedia chief Robert M. Kavner.

Kavner’s responsibilities will be far-reaching. But Chairman Michael S. Ovitz said Kavner will largely focus on creating new-media opportunities for CAA’s stable of clients, which includes such well-known technophiles as Steven Spielberg and Robin Williams.

“We want to put our clients in the express lane of the so-called information highway, and Bob is going to help formalize the architecture of that strategy,” Ovitz said.

Kavner, who runs AT&T;’s multimedia products and services group, is the most prominent executive to make the leap from technology to show business. But the move comes as much of Hollywood is racing to gain a foothold in the burgeoning multimedia market, where new alliances are routinely forming--often out of pure caution. Analysts foresee a day when many of the walls dividing the industries will tumble, as entertainment becomes more technology-driven and vice versa.

In his new post at CAA, Kavner said, he plans to forge a series of alliances with technology companies, though he did not rule out the possibility that the talent agency might acquire an interactive firm of its own. The executive said he “has a lot of learning to do” before he gets into more specific details.

Rumors of a possible deal involving CAA and AT&T; had circulated for weeks. But the Kavner announcement caught most of the industry off guard, because he is leaving a job in which he supervises more than 50,000 people to take over a staff of roughly 10. Sources speculated that CAA lured Kavner away with a hefty pay raise and the opportunity to play matchmaker between some of Hollywood’s top talent and some of the technology world’s biggest companies. AT&T;’s most recent proxy report shows Kavner already makes more than $1 million a year.

Asked why he took the job, Kavner said: “Life is short. I’m 50 years old, I’ve got a terrific family, and I wanted to force myself into another phase in my life.”

With Kavner coming from AT&T;, where Ovitz also has close ties, some onlookers took his hiring as a sign that one of the first new ventures will involve the New Jersey-based telecommunications giant, which has a market value of more than $61 billion. Neither side discouraged that speculation on Thursday.

Kavner has been on the front line of the information revolution at AT&T.; He was the keynote speaker at January’s Consumer Electronics Show in Las Vegas, where he took the cable industry to task for trying to act as “gatekeepers” to the home. He reported directly to AT&T; Chairman Robert E. Allen, and his duties have included finding commercial markets for products developed by Bell Laboratories. Kavner also led the charge for Eo, AT&T;’s disappointing foray into the portable communications world.

On Thursday, Allen said several AT&T; executives will assume Kavner’s responsibilities, with Global Operations Chairman Victor A. Pelson taking on multimedia.

Kavner formally joins CAA on July 1. Despite his soft-spoken manner, he is described as a fierce negotiator capable of “wielding his power like a knife.” While no one knows exactly how the new-media puzzle will sort out, analysts say Kavner has as good a grasp as anyone.

“It’s really a very smart move,” said Mitch Ratcliffe, editor of the San Francisco-based newsletter Digital Media. “With Kavner, CAA is an instantly powerful player (in the multimedia world). . . . He can point the way and arrange alliances.”

The negotiations that led to Kavner’s hiring were closely guarded, even by CAA’s rigid standards. Spielberg, who arguably has more new-media irons in the fire than any other CAA client and who recently struck a deal with CD-ROM developer Knowledge Adventure, professed ignorance of the Kavner talks. Informed of the deal Thursday, the director of “Schindler’s List” and “Jurassic Park” responded: “Really? He’s great.”

Kavner, a former Coopers & Lybrand accountant who has worked at AT&T; for 10 years, said the CAA deal came together very quickly: “It was only a matter of weeks ago that we sat down and opened up the subject of joining our capabilities,” he said. “It just seemed to flow naturally. . . . For a lot of people that may seem unusual, but there’s a part of me that wants to be in an entrepreneurial environment.”

At the same time, he insisted money wasn’t the motivating factor: “If you gave me the choice of taking Mr. Toad’s Wild Ride through my life or making money, I know what I’d take. I’d take the ride,” he said. “If my life also creates great wealth, that’s terrific.”

Ovitz and Kavner became acquainted over the past two years, as the CAA executive discussed possible business deals with AT&T.; “In our discussions it was clear this was really a first-rate thinker,” Ovitz said. “In putting together a strategy for our clients, we realized the convergence of creativity and communications technology is the future, and he has been involved at the highest level in every area.”

Sources say Kavner will do everything from negotiating video game design deals to working out the rights agreements for actors’ likenesses.

Besides Spielberg and Williams, CAA clients who are said to be interested in new-media opportunities include Francis Ford Coppola, John Hughes, John Singleton, Renny Harlin, Oliver Stone, Ron Howard, Janet Jackson and Sylvester Stallone.

One executive speculated that Kavner will run the new-media division as a stand-alone entity. The high-placed source noted that “Ovitz doesn’t need anyone to make introductions for him. He already knows everybody. Kavner’s the kind of guy you want running a business.”

In one of his first moves, Kavner is expected to bolster CAA’s new-media staff.

“Even though I’ve been in a leadership role at a very large company, it’s a few people that do very great things,” Kavner said. “It’s very hard to get 1,000 people to do very great things, but the right 10 people can climb the mountain.”

Profile: Robert M. Kavner

Age: 50

Residence: Basking Ridge, N.J.

Education: Bachelor’s degree from Adelphi University; graduate of Dartmouth’s Executive Management Program.

Career Highlights: Currently chief of AT&T;’s Multimedia & Products Group, reporting to Chairman and CEO Robert Allen. Since 1989, he has overseen 50,000 AT&T; employees working in five business units. Started with AT&T; in 1983 as the company’s chief financial officer in the New York office. Before 1983, was on the staff of Coopers & Lybrand in various capacities from 1965, eventually becoming co-chairman of its information industry practice.

Family: Married; two children from a previous marriage.