So, Now What? : Ovitz Decision Stirs Things Up at CAA and Rival Agencies

“They talked, I listened,” Michael Ovitz told his troops at Monday’s 9:30 a.m., regularly scheduled monthly staff meeting in the screening room at Creative Artists Agency. More than 120 agents and executives at the company rose to their feet in an emotional, collective cheer when their charismatic leader assured them that neither he nor his partners, Ron Meyer and Bill Haber, were going to MCA.

“I’m psyched,” one CAA agent said after the meeting.

“There was a huge sense of relief, and I think everybody was extremely happy about it,” said another, noting that Ovitz and Meyer were “nonplussed” when they got the standing ovation.

“They honestly did not expect it,” one insider said.

So ended two months of intense speculation that had Hollywood convinced that Ovitz was leaving the agency business and going to MCA. The 10-minute declaration about staying home and “refocusing on the business at hand” allayed anxiety among his loyal workers who couldn’t envision the future without him.

But the aftermath of the long-reported MCA-Ovitz courtship leaves much in question, both for insiders and clients at CAA and for rival talent agencies, which had been hoping that without Ovitz they’d have a better shot at a level playing field.

Naturally, Monday’s news came as a major disappointment to CAA’s competitors, which for weeks have been hitting on CAA’s clients in the hope they might switch agencies because of the company’s uncertain future without its visionary.

“Sure, there’s disappointment that Mike is still around,” the head of one rival agency said. “But no one thinks he will stay. His next move is clearly not to represent the next hot writer or director. He’s made that public by doing this.”

One studio head agrees that it’s only a matter of time before Ovitz makes the jump to the other side for the right opportunity--perhaps a better opportunity than MCA.

“He’s obviously itching,” the executive said.

Yet no one but Ovitz knows what job would lure him from the 20-year-old agency he built and which has come to dominate the movie business with such high-powered clients as Tom Hanks, Robert Redford, Tom Cruise, Kevin Costner, Barbra Streisand, Robin Williams, Whoopi Goldberg, Demi Moore, Sylvester Stallone, Meryl Streep, Steven Spielberg, Martin Scorsese, Barry Levinson and Robert Zemeckis.

The MCA job isn’t the only one of this type that Ovitz has turned down. Though the news didn’t surface until long after the fact, Ovitz declined an offer to head Sony Pictures Entertainment five years ago when the Japanese electronics giant bought Columbia and TriStar.

Sources close to Ovitz indicate that it wasn’t money that soured the MCA deal. It was more an issue of Ovitz’s ambivalence, they say.

“At one point, they [Seagram] came back with a very lucrative package,” one informed source said.

“I heard he just had second thoughts,” said a competitor.

“When you’re talking these kind of dollars, deals don’t blow over money,” suggested another industry insider, noting that Ovitz supposedly was offered a $250-million package.

The bottom line, apparently, was that Ovitz was not prepared to answer to a boss after calling his own shots for a couple of decades.

Regardless of the money, equity or guarantees of autonomy, it would have been hard to imagine the abrupt change in dynamics between Ovitz and his friend, Edgar Bronfman Jr., the 39-year-old chief of Seagram.

Even though Ovitz decided against an MCA move, the prospect of his leaving CAA undoubtedly forced many of the agents there to re-evaluate their own futures. Given that Ovitz had seriously considered the new post, many are left wondering what his next move will be.

Where, for instance, does this leave the “Young Turks,” as they are called, CAA’s close-knit clan of thirtysomething hot-shot agents who represent a powerful client list? They no doubt were key figures in a succession plan had Ovitz departed.

Sources speculate that the Turks--Jay Moloney, Richard Lovett, David O’Connor, Bryan Lord and Kevin Huvane--probably along with a few other veteran CAA agents, would have divvied up the 55% equity in the agency held by Ovitz.

But as high as their expectations might have been to own a chunk of CAA and have more of a role in its management, sources close to the well-paid Turks say the five are better off with Ovitz and Meyer staying.

“These guys are already stars,” one colleague said.

Indeed, their succession higher into the corporate ranks at CAA would have required a major change in lifestyle and created a whole new set of administrative worries and concerns.

“They’re better off getting a few more years of ballgames under their belt,” said the CAA source said.

One rival of CAA suggested that Ovitz has a lingering credibility and morale problem with his troops, since for many weeks he has been vehemently denying that he intended to go to MCA or was involved in any negotiations. Only last Thursday did he call a special meeting at the agency to confirm that he had in fact been approached by Seagram and that no decision had been made.

Sources say serious negotiations between Seagram and Ovitz intensified in the last seven to 10 days and fell apart in the wee hours of Sunday night.

But a studio head laughed at any suggestion that the events of the last two months could have any lasting effect on Ovitz or the agency.

“It’s rattled things a bit, but Mike Ovitz will be back in a week terrorizing everybody,” he said.