COMPANY TOWN : Why Hollywood Wants CAA’s Ovitz at MCA

While nobody but Michael S. Ovitz himself knows for sure whether he will leave the powerful agency he has built over the last 20 years to run MCA, there are numerous people in Hollywood with competing interests who have a severe case of wishful thinking.

If the man regarded as the most influential in Hollywood does leave his perch at Creative Artists Agency, industry insiders believe the balance of power would shift and even out the playing field.

“Everyone is rooting for him to go,” admits one rival agent.

Another source said Ovitz was told by a business associate this week that his leaving the agency business “is everyone’s dream.”

This may help explain why so many of those promoting Ovitz to a new job are ignoring the strong reasons for him to stay put. Probably the most compelling is that this is a man who has been his own boss for 20 years.

Though Ovitz continues to vehemently deny the rumor and is exasperated that journalists are even putting it in print, it’s a rumor nonetheless that has gripped Hollywood with a particular vengeance. It is all anyone in town wants to talk about. And it is something many feel certain about. Never mind that we’ve heard the same rumors about Ovitz many times before. When Matsushita purchased MCA, Ovitz was replacing Lew Wasserman. When Sony bought Columbia and TriStar, Ovitz was the guy. And when Coca-Cola fired David Puttnam, Ovitz was his replacement. When Steve Ross was on his death bed, Ovitz was taking over Time Warner.

Ever since Edgar Bronfman Jr. emerged as the suitor for MCA, Ovitz has been hounded by the press, his colleagues, his clients and his business associates--many of whom believe he is in the throes of negotiating the biggest deal of his life.

Why has the rumor taken on such humongous proportions?

*

First of all, it’s sexy. We’re talking about a guy Hollywood both reveres and fears for the amount of power he wields over an entire industry.

Naturally, every rival agency in town would like nothing better than to see CAA destabilized by the loss of Ovitz. While CAA wouldn’t crumble if Ovitz left--the agency has a strong management team in partners Ron Meyer and Bill Haber--such a cataclysm would make clients vulnerable and potentially easier to poach.

CAA represents much of Hollywood’s top-drawer talent, including Tom Cruise, Kevin Costner, Demi Moore, Robert Redford and Steven Spielberg. Over the years, rival agencies have lost a number of their A-list clients to CAA.

But it’s not just agency competitors who stand to gain from an Ovitz move.

“Every movie executive in this town is foaming at the mouth because it will change the balance of power in this town, which has decidedly been on the side of agents for so long,” said one studio head.

CAA’s recent precedent-setting $20-million blind movie deal with Savoy Pictures for client Sylvester Stallone is having a ripple effect across the pay scale for top Hollywood stars at other agencies.

Denials aside, most of Hollywood is more or less convinced that Ovitz is in the mood for a career change so he can forge new playgrounds and move into the billion-dollar club with the Eisners and the Geffens. Not that Ovitz is poor by any means, but an equity stake in a company such as MCA would put him in a different league of wealth.

But there are strong arguments to be made for why he would not make such a move--the most compelling being: This is someone who has called the shots for the past 20 years.

“What I do know about Michael, and I know him well, is that he revels in being his own boss,” says one close associate.

Even if Ovitz is offered an equity stake in MCA, it would still mean his having to answer to the company’s 39-year-old Bronfman--a close personal friend--and the board of directors of Seagram, a publicly held company.

The head of one rival agency says he’s also a nonbeliever: “It will never happen. Why would he want to go from being the most powerful man in Hollywood to calling me and saying, ‘Hey, can I come and see you?’ ”

It is, after all, hard to envision Ovitz cozying up to his now archrival, International Creative Management Chairman Jeff Berg, to get the latest Arnold Schwarzenegger movie.

Skeptics also wonder why Ovitz would give up such far-reaching power to operate a single company, no matter how big and worldly a conglomerate it may be.

And cutting ties with CAA may not be as easy as some assume. Arranging and financing a buyout of his interest could be complicated by the fact that the company’s major asset would be walking out the door.

Nevertheless, this undying rumor has clearly penetrated CAA’s I.M. Pei-designed Beverly Hills headquarters. Even the many among them who are skeptical that he will depart are admittedly paranoid about the off chance he might.

*

Sources close to CAA’s “young Turks”--a group of five thirtysomething, hyper-aggressive, mega-successful agents--flatly debunk rumors that their pals would splinter off and form their own agency if their visionary leader left.

The agents themselves--Jay Moloney, David (Doc) O’Connor, Kevin Huvane, Bryan Lourd and Richard Lovett--declined to be interviewed. They’re intensely loyal to both Ovitz and Meyer. But forget loyalty; these guys get paid between $500,000 and $1 million-plus and they’re treated like royalty. “Why would they want the Sturm und Drang of starting their own agency?” muses an associate.

One of the most destructive effects a rumor of this magnitude, founded or not, can have is the disruption it causes a company. Some say that is precisely why some people want to keep the Ovitz rumor alive and have even told CAA clients that his deal with MCA is a fait accompli .

Said one: “We’d all be thrilled, but . . . none of us have a clue whether it’s really happening.”

Well, since when did that stop anyone from gossiping? After all, as one executive reminds, “Gossiping is the mother’s milk of Hollywood.”