My Rating: 9 of 10
Summary
Michael Ovitz is the founder of Creative Artists Agency, and in the late-80s early-90s, the king of Hollywood.
He represented all the big stars, and negotiated the sale of two studios. Like Teddy KGB, “he’s the one guy you don’t want to f- with.” By the time I arrived in Hollywood, Mr. Ovitz’s heyday had passed, but I was fascinated by him (I wrote about that fascination in October 2013.) In this article, he briefly looks back at what he built, mistakes he made, and talks about his new book.
Favorite quotes:
“Nathan Myhrvold was employee number three at Microsoft. One of the smartest men I’ve met. He said to me, ‘Michael, whatever comes out of a speaker is going to end up in the ether someplace and be able to be pulled down by people for free.’ I was an apostle of his point of view.
I told it to the head of every music company that I was an adviser to. And like anything else in life, they focused on what was immediate, which was quarterly sales of CDs and DVDs.”
For what it’s worth, James Andrew Miller isn’t impressed with Michael Ovitz’s memoir (“It’s like he wants to get to heaven but doesn’t want to die.”)
Mr. Miller wrote the fantastic book Powerhouse: The Untold Story of Hollywood’s Creative Artists Agency, a complete oral history of CAA, from its formation, rise to power, and aftermath of Ovitz’s departure. (He had 70 conversations with Ovitz in the writing of his book.)
“Ovitz begins his book by likening himself to Arnold Schwarzenegger’s character in The Terminator, being “relentless” and “inhuman” and later acknowledging how much disdain some others had for him. It’s good, candid stuff, but unfortunately for the reader, Ovitz’s goal with the book to emerge as respected and liked gets in the way of him being totally transparent about how he acted to get there. He rarely showcases the raw, unforgiving and, yes, brutal way he sometimes thought about and acted toward others.”
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Notes
Getting Dave Letterman The Late Show
I always tried to plot out, at the beginning of any complex negotiations, the desired end point. After we discussed the problem from every angle, it became clear that CBS was our desired end point. In June 1991, shortly after Leno took over at Tonight, I called one of my favorite executives, Howard Stringer, CBS’s president. Howard was bright and calm and lethally witty–and I knew he was determined to plant his flag in late night. “Dave’s not available now,” I said, “but we’re looking at possibilities after his contract expires. It might be a good idea if you started thinking about it.” (pg. 21)
could solve it. “Peter,” I said, “I know Dave’s circumstances. And so I know why you’re here. Dave is a star of such compelling staturre that, frankly, it makes me personally angry he finds himself this abused. We pride ourselves here at CAA in developing a career plan for our clients that protects them as much as enriches them. David has had such an incredibly high professional standard, and yet he’s going disturbingly unrewarded. That just doesn’t make sense. It’s bad business practice. Obviously,” I continued, “we have an intense interest in establishing a business relationship with you, Dave. And with you, Peter. Frankly, we have worked out a career plan for David, and it includes securing everything for Dave that he wants. Everything.” I let that sink in. “Of course, that means an 11:30 television show.” However, I added, “The geometry of the deal will be far larger. The studios will be in, the syndicators, the full range of the entertainment industry. We’ll frame a deal that will make you one of the giants. And if you give us the privilege of working with you, CAA will take care of everything your talent deserves.” (pg. 18)
Agents used to be like firemen: they ran from one crisis to the next, reacting to offers and ultimatums, never knowing what tomorrow would bring. At CAA, we prided ourselves on making tomorrows. Could we create a more brilliant one for Dave? We put five people on the project under Lee, and I asked them to analyze Nielsen ratings and late-night time slots and every conceivable bidder for his (pg. 8)
I’d made it my life’s work to understand people, to grasp what made them tick. I’d been certain that I was too wary to misplace my trust and too smart to be duped. So I’d like to think that these betrayals were random, and flagrantly unwarranted, and that I was the victim of some perverse instinct that destroys all human intimacy. I’d like to think that the problem was just that the tools and stratagems I’d used to get to the top inevitably created resentment, even among those who shared my success. That everyone was a winner. That just because I sought money and power and intimidated everyone to get them didn’t change me.
But I did change, of course. Because I could get movies that no studio would touch released and celebrated (Stand by Me), make stars out nobodies (Steven Seagal, who’d been my martial arts instructor), even broker the sale of studios (Columbia and MGM once each, and Universal twice). With CAA’s power behind me, I could, for a time, make almost anything in Hollywood happen through leverage, acument, and sheer self-belief.
Those whom the gods wish to destroy they first give a gift. (pg. 11)
Ovitz’s Early Days At The Agency
As agents, we didn’t create anything, we were sellers; we sold our clients our time and expertise, and then we sold the buyers our clients. Our tenuous capital was the hours in the day, less the few we slept, and we spend that capital at a frenzied pace. I’d drop everything to get you the right cardiac surgeon, the right car, a place for your kid at the John Thomas Dye or Harvard-Westlake schools — whatever you needed. I was everyone’s chief psychiatrist, legal adviser, financial adviser, fixer, cultural translator, and shoulder to cry on. With so many clients’ very lives seemingly our responsibility, I obsessed about what might go wrong for them — and for the agency. At one point in the ‘80s we found an operative rooting through our trash, and (pg. 9)
He was a creature of habit. He stepped out to dine with Mr. Lastfogel — as everyone addressed him, including Sam — 6:30 every evening. At 7:00 the senior people took off, all except Stan Kamen, the famed motion picture agent, who returned calls with a second-shift assistant until 8:00. And then the office was empty until Sam returned from dinner for another three hours to finish up.
I planted myself at a cubicle where he could not help but notice me, spreading out my files so he’d see them. A week later, around nine p.m., came the call I’d been waiting for, “Can you do me a favor?” Sam said. It was just a clerical task, but we were the only two people in the building, and he sure wasn’t going to do it.
My play was totally calculated and manipulative. I’m sure Sam knew exactly what I was doing. He also knew that calculation and manipulation are prerequisites for the job. So three months after starting at William Morris, I became Sam Weisbord’s guy. I worked as his after-hours assistant without being asked or paid. I never went by his office without ducking my head in to see what he might need. When his secretary took sick and went on leave, he asked me to fill in. I was a terrible secretary, but a spectacular assistant. Because I struggled with word-for-word dictation, Sam would say, “I want you to take care of so-and-so and tell him such and such,” and then I’d flesh out the letter on my own. (pg. 51)
Forming CAA
I had made a checklist of everything we needed to do: find an office, get stationery, get a license, come up with a logo, and so on. I was the most junior of the group, an afterthought. But as I moved down my to-do list, nobody else was chiming in. Ron was superb at managing in the moment but indifferent to administration; Bill Haber had a counterpuncher’s style; Mike Rosenfeld had no desire for added responsibility. So I kept talking, and I never stopped. Through our first few weeks in business, jobs kept falling into my lap. We all liked the name “Artists Agency” because it denoted a client-centered culture — but another agency has previously used it. So I proposed adding “Creative” to suggest both our clients’ creativity and our own. Mike and I sketched the CAA logo, and I ordered stationery.
David Wolper, the William Morris client who produced Chico and the Man, gave us temporary office space, a room on La Cienega with two phones (WMA pressured him to throw us out, a hint of things to come.) Two weeks later we scraped together $100,000 by putting up our homes as collateral. Ron and I paid a deposit on a bargain-bin lease in a lower-end building on Doheny and Wilshire, at the very edge of Beverly Hills. The former tenant, the landlord said, had been a wigmaker. (pg. 68)
The Mort Janklow Story
The Jacqueline Bisset meeting convinced me that the way forward was to sell our clients on our reach. We’d give them more info than anybody; they’d dee every script and even get hot books in manuscript — preferential treatment befitting the CEO of his or her own corporation. We’d break into film by taking books and scripts and treatments to prospective client — we’d bring the mountain to Muhammad. When New York magazine touted Mort Janklow as the hottest literary agent, I rang him up. It took me ten days to get him on the phone to ask if I could come see him. I flew to New York at a cost that made my stomach twitch.
Mort’s Midtown Manhattan office was done in Charles Gwathmey modernism, all angles and curves and rich oak paneling. Trying not seem overawed, I laid out our book-first strategy. I asked to call him Thursday at 10:00 a.m. in case he had something for us.
Mort could have set his watch by my calls. I kept at it for a year, every week, no matter where I was, before he gave us a novel called Chiefs, a police drama set in the South. The story was solid, but Mort neglected to tell us that the networks had already turned it down. Bill Haber worked round the clock to get Chiefs produced and prove we were for real. His friend and client Martin Manulis, the producer of Gunsmoke, somehow wrangled Charlton Heston, a big-enough star to get Chiefs adapted into a successful miniseries on CBS. Ecstatic, Mort started sending us manuscripts by his most commercial writers: Jackie Collins, Judith Krantz, Danielle Steele. We went on to package pulp (pg. 77)
But here it is: I could have worked ten percent less, and it wouldn’t have made a difference in my professional success. But I would have been a lot happier.
I’d Like to Have Your Job
Ted was absolutely right on both counts –it was great advice, and I didn’t take it. I see now that I could have worked as much as 20 percent less, and it wouldn’t have cost me. If I’d worked even 10 percent less, across thirty years, that’s three whole extra years of life I’d have enjoyed. On the other hand, Ted himself stepped down from Warner Bros. at a relatively young age, in his late fifties, and when I saw him a few years later, I was stunned by how listless he seemed.
I had no interest in retiring young after midlevel success. The same year that Ted gave me the advice on slowing down, he put me in a room with Steve Ross, CEO of Warner Bros., in New York. Steve was a visionary. He was tough, forceful, generous, and impossibly charming — hard as nails yet widely liked. Starting with a few parking lots, he had bought and sold his way to the very top of the media and entertainment industries.
Ted wanted me to come to Warner, and I was flattered. But only five years into CAA I knew I wasn’t ready for a studio position. “I’m really not that interested,” I told Steve.
“Well, what job are you interested in?” he asked.
“Yours. I want to learn everything I can, and then someday I’d like to have your job.”
He laughed. “That’s the answer I was hoping for,” he said. Instead of feeling threatened or offended, he found my ambition refreshing — the sign of a true leader. I took note of that quality, and tried to mirror Steve’s best aspects at CAA. (pg. 99)
How CAA Operated
CAA had no formula business hours. If the partners’ cars were in the garage at 8:00 in the morning, so were everybody else’s. When I made my evening rounds at 7:00, 80 percent of our people were at their desks. The work was the thing. We even had a no-fly-by-day rule: if you flew to New York, you took the red-eye so you didn’t waste a workday in the air. Ron and I would park our cars in the number one and number two spots and leave them there when we walked to business dinners, before coming back to retrieve them. We worked insanely hard, but we fostered the illusion of working impossibly hard. I believed momentum was everything — once a company relaxed, it was done for.
The lack of hierarchy was a myth, of course, a management tool. Nothing happened that Ron and Bill and I didn’t want to have happen. We were democratic dictators. I thought of creating our corporate culture as asking to making a giant pointillist painting, dabbing in a million dots that, when you stood back, came into focus as a coherent picture. Each dot was a detail. For instance, we took great pains in our hiring: everyone we brought on had been interviewed by the whole company first, so we had across the board buy-in. And I wrote memos to everyone about everything: the advantages of Pan Am over Continental for flights to New York; the imperative need to look for “any post-1900 female biographical characters that have not been covered in the media” for our client Sally Field to play; specifications for the cake for Marty Scorsese’s fiftieth birthday party (“Marty likes chocolate and is not averse to coconut”); even how to get Zegna suits at cost plus $200 so we’d all look sharp (“If you’re interested, I will set up an appointment for my oldest friend Steve Stearns to come into the office with all of the fabrics for the fall line. If you are not interested, I do not care.”). Sending out ten or more such memos every day, getting every detail just so, was extraordinary time consuming. But time was our nest egg. (pg. 104)
shaped and defined over the years. But among the partners I gave the most thought to what it should be. I scraped from an eclectic variety of sources, a businessmen’s version of Picasso’s method. From law firms, I took our phraseology — Ron was a partner, and so were the people in the mailroom — and also the paramount importance of confidentiality. Our collaborative approach came from the way Magic Johnson ran his fast break with the Lakers. He’d drive it up the middle, have an open shot, and pass it up to feed an unguarded teammate. Who wouldn’t kill to play with that point guard? At staff meetings and retreats, I began to talk about the philosophy of the Chinese general and military strategist Sun Tzu, whose The Art of War I’d read in college. We took his ideas on loyalty, on teamwork, and on how having complete information as the key to decision making. The book also resonated with me because it prioritized strength and toughness. Ron and Bill thought my emphasis on Sun Tzu was crazy, until they realized that it worked — that our team bought in. In truth, though, the Chinese general was always a bit of a prop. It wasn’t so much what he said that inspired CAA, as the idea that we, a five-year-old company, were adhering to a philosophy from 2,500 years earlier. It gave us instant roots.
I was obsessed with the Spartan phalanx, the idea that you were only as strong as the colleague on your left. We’d go to meetings as a group, we’d go to screenings as a group, walking down the aisles together half an hour early, ten or fifteen strong, a show of power. I drove our people hard to sign at least two clients a week, and after we got up and running, our signing machine ws a thing of beauty. Let’s say you were a promising screenwriter and I met you at at dinner at Morton’s. I’d call you the next day for a quick chat — not about wanting to represent you, but about the virtues of your work (which three of our literary agents would have briefed me on). I’d casually toss in the names of a few well-known actors and directors who’d be a perfect fit with your sensibility. Ninety-nine percent of the time, you’d want to talk some more, and I’d suggest lunch or a drink. There we’d talk further about your work and your hopes and dreams. The killer move, as you (pg. 105)
lodes of information, and to do that we had to exploit a niche the rest had overlooked. Ron and Bill and I began by handling studio executives’ own employment contract, as we’d long done for TV execs. We took no fees for this; we were after something more valuable — an inside track. The vice presidents we handled would give us tips and take a second look at our clients. Then we shared those tips with the most powerful people in town. In the preemail era, when people were flooded by phone messages, which calls did they return first? CAA’s, on the chance they might learn something useful.
Soon we represented so many executives that we could see the entire chessboard. The instant we sensed someone was unhappy we’d be thinking about where to move them, and whom to move into their place. We knew about epnings before the executives themselves did. That’s how we helped move Less Moonves from Warner to run CBS, Brandon Tartikoff from NBC to Paramount, and Marcy Carsey and Tom Werner from ABC to their own production company, with a CAA-brokered guarantee for several pilots from their former employer. I would often tell our agents to watch a space: “In thirty to sixty days, something big will happen at Paramount.” If I was quietly settling Frank Mancuso’s dispute with Marty Davis about his severance pay, and Variety ran a story that Frank was going to sue Marty, I’d pay, and Variety ran a story that Frank was going to sue Marty, I’d say “Don’t count on it.” I enjoyed seeming all-knowing, the great Oz, but the real point was to signal our agents that we were working at a level above their heads– that if they were planning to leave for a studio job, for instance, we’d know before they’d even discussed their contract. (pg. 108)
I’d look at the phone logs every morning and afternoon and put dots next to each message in red ink. Five dots meant “call back right now”; four dots was “call within thirty minutes”; three was “call before next meal”; two was “call by end of day”; and one dot signaled “call before the end of the week.” Even the most important clients wouldn’t necessarily get a return call right away. When I signed Marty Scorsese, I fold him, “I’m not going to spend an hour on the phone with you a day — then I can’t be doing everything else I need to do to find out what’s going on, and I’m worthless to you.” So when Marty called me, if it wasn’t a crisis, one of my assistants would say, “He’s tied up, but he’ll be back to you by the end of the day.” Then Jay Moloney would call back for me, talk to Marty for an hour, and write up a buck slip explaining why Marty had called. The buck slips themselves would be ranked in order of importance — the rule was that if a buck slip contained a question, it had to be replied to by the end of the day– and I’d call whoever needed my attention most.
If we were trying to transition to a client whom I’d signed to the agent who’d be handing him today, I’d keep having that younger guy call back for me, and usually by the time I got back to Al Pacino, say, he was fine with having his daily business handled by Rick Nicita. All the senior people passed down their top artists as soon as younger agents could handle them, by slow-rolling the return calls. Manipulative, yes, but the pass-down process took pressure off signers like Ron and Bill, allowed younger agents to get in the game, and spurred CAA’s continuing growth. Warren Beatty once told me, “It’s smart of you guys to give so much work and support to the young guys — it makes you look that much more important.” He was right: it was self-serving for the agency’s leaders, but also agency serving. Those impulses felt synonymous at least at that point. (pg. 177)
The Sale of MCA/Universal
The last mogul got old. As the cost of making movies soared in the 1980s, in large part due to us, Universal hunkered down. Despite the runaway success of George Lucas’s Star Wars, the studio passed on Raiders of the Lost Ark when Tom Pollock, Lucas’s lawyer, demanded a fifty-fifty split. Paramount scooped it up on those terms and made a killing. Lew and Sid Sheinberg chose to ride out the bubble and pass on deals they deemed inflated. But the bubble lasted fifteen years. After Warner merged with Time Inc. and Sony bought Columbia, MCA began to look outmoded.
Their weakness was most glaring in TV. As Rupert Murdoch formed a fourth network at Fox and gobbled up Metromedia, Lew pulled back, at the last minute, from a merger with RCA/NBC — a terrible mistake. With RCA throwing off cash, Lew could have ruled MCA till his death. He had been the first to see TV’s potential, but now he missed out on pay television and HBO. His company had everything it needed to ride those waves: expertise, cash flow, mounds of collateral, zero debt. He owned or controlled 19 percent of MCA’s stock, and no one on his board dared cross him. Yet Universal, the fabled octopus, had crawled under a rock.
As MCA’s share price swooned and sharks such as Steve Wynn circled, taking big stock positions, Lew stayed defiant. In 1984, at age seventy-one, he said, “I do not intend to sell, I do not intend to retire, and I do not intend to die.” Six years later, all three of those events seemed increasingly plausible. If the share price dropped below thirty dollars, MCA’s real estate value would exceed its market cap. A raider could sell the company for parts and haul off the studio’s library — three thousand films and more than thirty thousand TV shows — for free. (pg. 251)
Getting Into the Advertising Business
But I thought Ron was missing the bigger picture. My epiphany came a few days later in Brentwood, after I put the kids to bed. I was in my home office, checking TV Guide to see what was on, and it hit me: The same Coke commercials aired on all of these shows. Traditional ad agencies cooked up seven or eight spots per client per year, and each one played morning till night: “One sight, one sound, one sell.” But the TV audience was not as fragmented as the rest of American society. Seinfeld or Letterman aficionados weren’t the same people who followed daytime soaps or the NBA playoffs. Friday-night sitcoms skewered younger than Saturday Night Love and much younger than ABC’s Sunday Night Movie. Why not trade the shotgun for the rifle — why not customize ads for each group? My first big idea for Coke was to make different spots for 60 Minutes and The Simpsons.
Our challenge was to restore Coke’s cachet with young people, but first we needed to get and hold their attention. Infrared TV remotes had invaded the American household. Viewers clicked to a new channel when ads came on, or went to the kitchen or the bathroom. My kids ran off to another room to play. So Coke’s commercials had to tell stories the way movies did, only much faster. They needed to entertain. Advertising wasn’t subatomic physics. Make commercials fun to watch and viewers would embrace them. From there I worked back inductively. Ad campaigns had three essential components: raw ideas, creative types to develop them, and technicians to produce the finished spots. The first two were CAA’s stock in trade and the third could be hired by the job. While outsourcing was frowned upon by ad execs (who raked in extra revenue by keeping everything in-house), film studios often outsourced their trailers. Why wouldn’t Coke do the same? (pg. 282)
The next morning I called Don and Roberto and said I had something, “and you’re either going to love it or hate it. My guess is you’ll love it, but it’s high risk, high reward.” Inoculation, pure and simple. Then I flew to Atlanta and, in Roberto’s icebox of an office, made my pitch for CAA to produce two dozen Coke commercials for what McCann charged for seven or eight. My thinking was to roll out a few spots at a time, each set tied to a season or a holiday. “Think of it as a relay race,” I said. The summer was about heat, the beach, refreshment. In September, a back-to-school feel. Then family gatherings for Thanksgiving; snow and holidays up to Christmas; hope and resolutions for New Year’s; love and companionship at Valentine’s Day; family themes again for Easter.
Second, each spot would be tailored to a demographic niche on the networks’ schedules.
Third, we’d blend people from movies and advertising to create a new kind of commercial, a mini movie.
Fourth, Coke would pay CAA a consultancy fee of a million dollars a month, plus expenses and outsourcing costs, but we wouldn’t charge supervisory markups on other people’s work. If we got the account, they’d pay us a fair price for the ads we did.
Fifth, we’d set our own ground rules. That meant no market research, because we trusted our taste more than we trusted focus groups. (Nontraditional agencies like Chiat/Day, which downplayed research (pg. 283)
who created and produced it as for its unexpected freshness, breadth and playfulness… Almost all [the commercials] are infused with a cleverness, an assertiveness and an edgy, yet fun-filled feeling absent from Coca-Cola advertising since the ‘new’ Coke fiasco in 1985.” Time wrote: “To the ad industry’s dismay, nearly all the new commercials introduced last week were produced by CAA. Even worse, they are terrific.” A few weeks later, Phil Dusenberry walked up to me at a New York cocktail party and said, “I don’t know where you came from, but my hat’s off to you. We’ve had to reassess everything we’re doing.”
Shortly after our first spots aired, Roberto Goizueta paid a visit to CAA. He strolled through the office passing out custom Hermès ties with a polar bear print: a victory lap.
Peter Sealey sent me a check for $10 million for the ads. Not bad, but I returned the check with a Post-it Note attached: “Pete. Let’s discuss this.” We did, and then I called Don and Robert. I was friendly but unrelenting, and Pete finally sent me a new check for $31 million. They thought it was too much. I still think it was too little. I should have insisted on a royalty for the polar bears, which they’ve used ever since.
In the second quarter of 1994, Coke logged a 6 percent gain in US case sales and a 12 percent increase in profits. By then our second campaign was airing, and even Advertising Age tipped its hat: “The new pool of 30 spots is the best Coke advertising, and maybe the best soft-drink advertising in decades.”
CAA had demonstrated that no one had a monopoly on good ideas. We paved a two-way street between Hollywood and Madison Avenue; in years to come, commercial directors like Michael Bay and David Fincher would migrate easily to feature films, and all sorts of people — design studios, digital shops, integrated marketing firms — would grab pieces of the advertising pie. Many borrowed the ingredients we pioneered with Coke, from a seasonal relay race to demographic tailoring to dialogue-free commercials for worldwide use. It wasn’t (pg. 292)
The overarching issue, and the reason I slow walked a lot of these inquiries, was that I had a plan with Teddy Forstmann to buy J. Walter Thompson, the huge multinational ad agency. That was my exit strategy. We’d give the Young Turks day-to-day responsibility for CAA. Ron would be its CEO, and I’d run the conglomerate, building it out to acquire other media properties.
I’d floated the idea with the guilds, telling them we were interested in an ad agency, and their reaction was violent: You can’t produce ads. We thought that getting our clients ad work would help strengthen the guilds, but they didn’t see it that way. Once again, being an agent had put me at the intersection of exciting possibilities — and prevented me from pursuing them. In retrospect, I should have just gone ahead with the J. Walter Thompson plan as a minority shareholder. CAA would take 49 percent, Teddy 51 percent, and I’d ease into the majority ownership later. It’s exactly the move Ari Emanuel and Patrick Whitesell made recently at William Morris Endeavor; they’re now producing ads. Of course, times have changed; the guilds, now eager to have work for their clients didn’t fight WME.
At the turn of the twenty-first century, Advertising Age celebrated the top hundred people in the modern history of the field. A number of my heroes made the list: Leo Burnett, Dan Wieden and David Kennedy, Jay Chiat, Phil Dusenberry. Number eighty-seven was a surprise: Michael Ovitz (pg. 293).