The Brawl: Actors Vs. Agents

Will the tinkering of an old San Francisco lefty known for his crusades against deadbeat dads and sweatshop merchandise in U.C. logo stores do more harm than good to Hollywood’s broken deal machine? We’re about to find out.

As if the utility meltdown weren’t trouble enough, state Senate President Pro Tem John Burton (D-San Francisco) has quietly waded into the state’s other power crisis--a rancorous contractual dispute that has fouled relations between actors and agents for the last two years, and is beginning to fry the wiring inside filmdom’s antiquated business apparatus.

The breakdown lays bare a core problem in the New Hollywood, where ever-larger, increasingly integrated corporate entities blur what used to be a bright line between buyer and seller.

Panicked by the number of name actors who’ve left their agents behind in favor of largely unregulated talent-management companies, the principal Hollywood agencies in 1999 asked the Screen Actors Guild (SAG) to renegotiate a more than 60-year-old master franchise agreement that sets the terms under which screen performers are represented. Specifically, agents want SAG to loosen restrictions governing the sale of agencies--like International Creative Management or Creative Artists Agency--to bigger companies, or to be associated, as are unfettered management concerns like Michael Ovitz’s Artists Management Group, with the production or distribution of movies and TV shows.

Smelling conflict of interest--would an agent with a stake in the production side suddenly become the actor’s employer rather than employee?--SAG balked. Talks over the new agreement collapsed last fall, which started a clock ticking. On Jan. 20, 2002, the old actor-agent agreement expires, leaving agencies free to sell themselves or do pretty much anything else within the bounds of law.

Many actors--stars and struggling newcomers alike--are justifiably worried that powerful talent agencies, which increasingly act more as packagers of film projects than as simple flesh peddlers, are putting their own interests in front of the client’s, and would be even more likely to do so if they were permitted a financial interest in programming. Agents, who already do the work of assembling films, say such antique prohibitions leave them unable to do things that would benefit clients. Few would argue that the two sides couldn’t use a good referee. But it’s hard to imagine that a righteous politician looking for shades of good and evil in the dispute can help matters by loading new regulation on an industry that’s already saddled with old ones as silly as Labor Code Section 1700.35, which forbids agencies to allow gamblers, procurers, and persons of bad character to frequent their premises. Better, perhaps, to let Hollywood solve this one on its own, through the covert pressures and back-door dealing that, over the years, have created what amounts to a private system of common law.

Still, the specter of a forced choice between suddenly unfranchised agents and the actors guild terrified a portion of the talent community, which, as negotiations broke down, went scrambling in search of a savior.

The actors hope they’ve found one in Burton, who agreed last April to schedule legislative hearings on the fight and has already set Hollywood aquiver by turning his staff loose on a wide-ranging review of entertainment business practices. “Burton’s a bully, and I can’t say anything about him until I get past the hearing,” said one of several players who declined to speak publicly about the review. All confirmed, however, that the senator’s prep work for the session--originally set for early July, but now pushed back until fall--had reached beyond the actor-agent fight and into questions about perhaps illegal behavior by entertainment managers and lawyers, among other things.

A former congressman and rumored challenger to Willie Brown as San Francisco’s next mayor, the 68-year-old Burton is arguably the state’s most powerful politician after Gov. Gray Davis. But he can be a bull in the political China shop. If Davis wants to purchase Southern California Edison’s transmission lines, Burton argues for buying the whole company. In the past, he’s knocked the studios off balance with his so-called ‘Astaire’ legislation granting new rights to dead celebrities and an anti-paparazzi law broad enough to affect popular shows like “Entertainment Tonight” and “Extra.”

This time around, Burton appears to have been drawn into the fray by both personal connections and a righteous sense that actors are being abused. Shortly after the agency talks imploded last November, a key Burton staffer was collared at a party by Ninon Aprea, a SAG board member. According to a person familiar with the encounter, Aprea, who had known the senator since childhood through her father, retired state Sen. George Zenovich, said, in effect, “We need help.”

Other people close to the situation say that actor Warren Beatty, Burton’s long-time friend, also counseled him to intervene. “Beatty’s half the reason Senator Burton’s in there,” insisted one Burton ally. Beatty, however, strongly disputes that claim. “I certainly didn’t bring him into the process,” he said. “I’ve specifically avoided participating in the agent-manager thing. . . . My interests are in the energy crisis and what can be done about it.”

Once on board, in any case, Burton told SAG that he planned to consider not simply the so-called “financial interest” issue--whether agencies should be able to involve themselves in film distribution or finance, or sell themselves--but an entire range of law and practices affecting performers. According to insiders, the Burton camp was moved by a gut sense that agents were out to “let everyone screw the actors,” in the words of one ally, by loosening contractual restrictions. Yet the Senate’s closer look at the situation is already bringing it face to face with the complicated set of loopholes and compromises that keeps Hollywood from breaking down.

By several accounts, Burton’s researchers have concluded that any legislative attempt to crack down on agencies would have to be accompanied by a crackdown on managers, who are currently free to engage in production. One fix being contemplated is a tougher penalty for non-agents who “book business” for their clients, a prerogative reserved by state law for licensed agents. Under current law, managers who violate the provision are simply subject to rescission of contracts and nonpayment of commissions by any client who complains to the labor commissioner. Yet anyone who knows Hollywood knows that managers--and lawyers, as Burton’s staff has just discovered--often book business precisely because that’s what actors (and writers and directors) want them to do. Many clients, in fact, are thrilled by arrangements that let them side-step or reduce commissions by having their managers compensated not out of their fees, but, as producers, by the film’s financiers.

Studios hate that arrangement but have learned to live with it. “What are you going to do if they want the manager to take a credit? You might think it’s extortion, but you’re going to do it,” one Paramount executive said of the situation.

If Burton cracks down on managers and lawyers, he simply reduces options and raises cost for actors, who are already desperate for more representation. Indeed, only 20% of SAG’s 98,000 members have a franchised agent, according to the Assn. of Talent Agents. If the senator cracks down only on agents, however, he virtually guarantees not only open political and legal warfare with the likes of ICM’s Jeff Berg and William Morris’ Jim Wiatt, but a continued exodus from the agency business, which was shaken only last month by the closing of long-time actors’ agency Susan Smith & Associates.

Reluctant to force big-name actors like Robert Duvall or Leonardo Di Caprio to hire agents when they’re currently content to work only with managers, the Burton camp has floated the notion of a high-earner exemption from any new restrictions, on the theory that the tall guys can take care of themselves. But that would only make it easier for stars to strike comfortable producing and commission arrangements with their managers, while making it tough for a struggling actor to do the same. They’ve also played with the idea of bringing tighter conflict-of-interest standards to bear on Hollywood attorneys, who will often, in effect, book business by putting an actor-or director-client in touch with a producer-client. But any move in that direction flies in the face of show business thinking, which regards such conflicts as “synergies” and will pay handsomely for them.

SAG lobbyist Lance Simmens says the union is hoping for a badly needed “clarification of legislative intent” covering the entire body of law governing the representation of talent. But some observers believe the best Burton can do with this mess is to play what one of them calls “Big Daddy,” nudging actors and agents back to the table with the implied threat that he might just screw the business up royally if they don’t sort things out.

Or, he might simply start fixing things, and hope the wires don’t get too badly crossed.