Creative Artists Counterpunches in Ovitz Fight

Escalating a war with its founder, Hollywood’s most powerful talent agency has given its clients--including such superstars as Tom Hanks, Tom Cruise and Steven Spielberg--an unusual ultimatum: If you retain Michael Ovitz as your manager, we will no longer represent you as an agent.

The managers of Creative Artists Agency said they were refusing to share any of the company’s clients with Ovitz, who they contend is acting “aggressively and hostilely” toward the agency by raiding its clients.

Last week, Ovitz triggered what is shaping up to be a bitter war with the agency he co-founded more than two decades ago, when he poached one of CAA’s biggest moneymakers--Robin Williams.

Ovitz lured Williams’ longtime manager Michael Menchel, whose clients also include Dennis Hopper and directors John McTiernan and Joe Johnston, to his new management company Artists Management Group (AMG).

The move infuriated CAA’s managers, many of whom trained under Ovitz, worked for him for years and once revered him as their role model.

Ovitz declined comment Monday.

The roles of Hollywood talent agents and managers often cross and they often corroborate with each other and share clients. CAA said that it intends to continue sharing clients with all other managers as it always has, except where Ovitz is concerned.

Agents, who are licensed by the state and regulated by the guilds, can earn commissions of no more than 10% for procuring jobs and negotiating deals for their clients. Managers are legally prohibited from soliciting work for their clients but advise and guide their careers and rely on agents and/or lawyers to procure work and negotiate contracts. Because managers are unregulated, they can charge fees of 15% or more.

CAA contends that Ovitz is acting more like a nonlicensed agent than a manager.

Sources say Ovitz has approached other CAA clients, who joined AMG but have retained CAA as their agency.

CAA currently shares more than half a dozen clients with Ovitz, including director Sydney Pollack, a close Ovitz friend; director Martin Scorsese; and actors Claire Danes, Minnie Driver, Marisa Tomei, Lauren Holly and Mimi Rogers.

Sources at other Hollywood talent agencies said CAA’s bold move carries some risk. Some sources wondered if the move could backfire should powerful clients resent being told what they can and cannot do with regards to their own representation.

It’s unclear how shared clients like Scorsese and Pollack will react when forced to make a choice.

“Here’s the danger,” suggested one competitor, who nevertheless applauded the move. “They may be fighting a local skirmish with an atomic bomb. Does this represent overkill? Is it escalating something to a point that hasn’t occurred?”

On the other hand, the agent said, “This was a bold move and a necessary one to secure their business, or at least define who their client base is.”

Another rival concurred: “It’s good business practice not to let your enemy sit at your table. If you’re going to share a meal with someone, you do it with someone who will share it, not devour it.”

The Ovitz development will likely add urgency to the long-simmering issues between agencies and managers.

Hollywood’s talent guilds have yet to take a public position. But officials for guilds representing actors, directors and writers all said that the issue is being watched closely. Sources said that Screen Actors Guild officials discussed the issue at two recent meetings.

The biggest concern by the guilds is that managers aren’t covered by agent regulations aimed at keeping talent from being exploited. In addition, guilds often look to agents they franchise to help monitor and enforce guild contracts that producers and studios are supposed to honor.

But for guilds, the issue of managers isn’t a clear-cut one. Top stars often want managers in addition to agents. And fledging stars often have managers because they can’t afford agents.

Assembly Speaker Pro Tem Sheila Kuehl (D-Santa Monica) on Monday said she has drafted legislation she expects to introduce shortly that would subject managers to substantially the same regulations that agents must follow.

Kuehl, a former child actress who starred in the television comedy “The Many Loves of Dobie Gillis,” said that her proposal to amend the state labor and employment code would require managers, who are largely unregulated now, to get a license and post a bond.

In addition, the proposal includes specific wording saying that managers would be unable to procure work for clients unless they were working with and at the request of an agent.

Times staff writer James Bates contributed to this report.