Ovitz’s Departure Ends Agency’s Tele-TV Venture With Phone Firms

One of Creative Artists Agency’s most high-profile consulting ventures--advising three regional phone companies on an interactive video venture--has collapsed in the wake of CAA Chairman Michael S. Ovitz’s planned departure to Walt Disney Co.

CAA confirmed on Wednesday that former AT&T; senior executive Robert Kavner, whose hiring last year as the new in-house media expert was aimed at building CAA’s presence in the emerging world of technology, and associate Jim Griffiths will leave the agency to become exclusive consultants to the Tele-TV venture.

The two will maintain what one source described as a loose relationship with CAA and have offices at the agency’s building. But the talent agency’s involvement is expected to be minimal, and it will earn only a fraction of the $50-million fee it was to have received for advising the phone companies--Pacific Bell, Bell Atlantic and Nynex.

Sources said that the companies informed CAA by letter Tuesday night. The companies plan to continue the venture, which aims to provide a wide variety of interactive and video services to homes via phone line. Tele-TV has said it plans to begin offering basic cable-like service and more elaborate pay television services to some customers as early as next year.

In a statement late Wednesday, Tele-TV said, “Along with Mr. Kavner and Mr. Griffiths, [we] will be reviewing the venture’s future options and alliances.”

The collapse of the relationship between Tele-TV and CAA is not entirely a surprise, because the phone companies are known to have been irked by Ovitz’s surprise announcement last week that he is leaving the agency to become president of Disney. The companies had been counting on Ovitz to smooth their entry into Hollywood.

At noon Wednesday, Ovitz officially passed the torch to the new owners and managers of CAA, but the ensuing announcement left a number of unresolved issues swirling around Hollywood’s biggest talent agency.

In an interview at CAA’s Beverly Hills headquarters, a committee of nine new managing directors acknowledged that several other areas in which Ovitz expanded the agency beyond the traditional talent business--such as its advertising business with Coca-Cola and its consulting services to French bank Credit Lyonnais, which owns MGM/UA--remain up in the air.

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CAA’s veteran motion picture agent Jack Rapke, who along with Rick Nicita and Lee Gabler are the three newly installed co-chairmen of CAA, said, “We’re not abdicating the new media and new technology areas. We realize they have potential for enormous growth for our clients.”

But agent David (Doc) O’Connor, one of new owners, said that the agency’s first priority is to focus on its core business of booking clients in movie and TV projects.

Richard Lovett, 35, one of CAA’s younger agents, was named president. The remaining members of the new committee of managing directors are Jay Moloney, Bryan Lourd, Kevin Huvane and Tom Ross.

Gabler and Ross remain the respective heads of CAA’s television and music departments. Huvane and Lourd take over as co-heads of the talent division, which was previously run by Nicita.

The shake-up at the agency started in July, when President Ron Meyer, who owned 22.5%, jumped to MCA Inc. as president. Last week, Ovitz, who owns 55%, announced his impending departure. Partner Bill Haber, who also owns 22.5%, is selling his share but has not announced his plans.

To cut its ties with Ovitz and Meyer, the new team formed a new corporation under the moniker Creative Artists Agency LLC. Talent guilds’ rules prohibit studios or their executives from owning agencies. CAA said it is already in discussions with the guilds to assure them that Ovitz and Meyer will have no vested interest in the new ownership.

The management group declined to say whether they would buy the I.M. Pei-designed headquarters building, now owned by W & S Properties, a partnership that includes Ovitz, Meyer and Haber.

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They divulged no information about financial aspects of the buyout.

However, it is believed that the nine new controlling partners will assume the lion’s share of CAA’s ownership with other key agents believed to have small equity positions. Among those believed to be part of that group are Fred Specktor, who handles such important clients as Robert DeNiro, Jeremy Irons and Glenn Close; Mike Menchel, whose clients include Robin Williams; motion picture literary department head Jane Sindell; and Bob Bookman, whose clients include writer Michael Crichton.