New Hollywood - Mark Litwak | Entertainment Companies | Business

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  The Rise of CAA 4  The Rise of CAA from   Reel Power: The Struggle for Influence and Success in the New Hollywood  MARK LITWAK Mark Litwak describes the shift of Hollywood power in the 1980saway from the studios to the new breed of superagencies like Cre-ative Artists, which have been able to determine the details of hugepackage deals (and create work for their talent) far beyond thedreams of earlier generations of agents. Michael Ovitz, the thenpresident of CAA, remains a leading business figure in Hollywoodmore than a decade after Litwak wrote. In 1990, he expanded thepurview of the traditional agent radically when he helped negotiatethe deals that sold Columbia and Tri-Star to SONY, and Universalto Matsushita. In 1995, he moved to the other side of the table asnumber two at Disney under Michael Eisner. (He was gone a yearlater.) The rise of the superagents has made room for a new classof personal managers to assume some of the agents’ more tradi-tional roles. Litwak, an outsider trying to make it in the small worldof Hollywood in the eighties, describes the rise of CAA with someinsight. More powerful than Sylvester Stallone, Steven Spielberg or BarryDiller, the most influential person in Hollywood is not a star, adirector or a studio head. While his name is rarely mentioned inthe news media, and he never gets a screen credit, everyone whomatters in the industry knows who he is. He is assiduously courtedby producers and studio heads alike because they need his coopera-tion in order to gain the services of the best writers, stars and direc-tors in the industry. He is Michael Ovitz, the president of CreativeArtists Agency (CAA). Since its formation in 1975, CAA has  The Rise of CAA 4 recruited to its stable such superstar clients as Robert Redford,Sylvester Stallone, Jane Fonda, Bill Murray, Dustin Hoffman andPaul Newman—overtaking the venerable William Morris for thedistinction of operating the industry’s most powerful agency. Thepartners are invariably described, even by their competitors, astough, hardworking, shrewd and aggressive. They have been lik-ened to the Yankees’ “Murderers’ Row”—a lineup of sluggers ledby Babe Ruth that demolished the opposition.Success has given each of the five CAA partners a reputed basesalary in excess of $1 million a year, along with such perks asmatching Jaguars and Ferraris (in assorted colors) with licenseplates reading CAA followed by each partner’s initials. In their busyoffices they are pampered with shoe shines and manicures as theycradle phones, negotiating deals nonstop.While there are five equal partners in the agency, Ovitz, as presi-dent, wields the most influence. He is respected for being smart,hard-driving and passionate in pursuit of the agency’s interests.Although lower-echelon employees consider him secretive andaloof, he nevertheless knows virtually everything that transpireswithin the agency. He insists that CAA agents follow his low-pro-file approach to agenting, disdaining the personal publicity-seekingthat such agents as ICM’s Sue Mengers are renowned for. CAAemployees are forbidden to speak to the press—which may explainwhy so little has been written about this agency.Ovitz’s style is that of the calm professional. “He is a smoothoperator,” says one industry observer. “He shakes hands nicely,doesn’t rile you, always wears the right kind of suit and nothing isever out of place.” But beneath the tranquil demeanor lurks anintensely ambitious man who set out to become the most powerful  The Rise of CAA 4  agent in Hollywood, and now that he has achieved his goal heshows no sign of letting up.Each of the other CAA partners is respected in his own right.Together they comprise such a diverse collection of characters thatthey could be the cast of a television sitcom.. . .“CAA is the best,” says Melinda Jason, then head of her own smallagency, echoing a widely held opinion in the industry. “Ovitz is agenius and has integrity and class. He is respected around town.The dumbest thing I ever did was not accepting a job offer fromhim. He is the finest agent alive today.”Says a former CAA agent, “Ovitz is the best at signing clients, atfar the best at keeping clients—I don’t think a single client has leftthat he didn’t want to leave—he is a terrific deal-maker and he runsthe company very efficiently. His incredible drive has made CAAwhat it is today. When CAA began he and the other partners hadno experience in the feature-film arena. They were all televisionagents. Ovitz had just one feature client, [writer] Robert Towne.But he put his mind to it and within two years he was one of thetop feature agents. No one has ever ascended that fast.”But not everyone is a fan of the agency. A William Morris agentcomplains that CAA agents are notoriously aggressive. “They arelike packs of wolves. They go up to clients and surround them.‘Come with us and we’ll make deals,’ they say. They are like hun-gry tigers, stealing clients away from other agencies.”CAA has been accused of cutting its rates to attract big-name cli-ents, a form of free-enterprise competition frowned on by otheragents. Although CAA denies the allegations, there is a widespreadbelief that the agency lured Robert Redford and Dustin Hoffmanto its stable by offering them a reduced commission of 5 percent,  The Rise of CAA  4  instead of the usual 10. If true, the upstart CAA was able to outma-neuver William Morris, which couldn’t cut its commissions forsome clients without alienating others. Indeed, CAA has over theyears spirited away a considerable number of big stars from bothWilliam Morris and International Creative Management (ICM)—the two behemoths of the agency business. Bright-red, full-pageads regularly appear in the trade press announcing that another starhas defected to CAA.One former CAA agent trainee says, “CAA has managed to getthemselves the best client list in the business. [And] they didn’t doit with just a smile.” Director Martin Ritt (  Norma Rae   ) is con-vinced that the allegations of CAA fee cuts are true.” When you’reRedford or Newman you don’t need an agent at all. Everything isoffered to you anyway. So the financing had to be better,” says Ritt.But a former CAA insider who claims to have read the agency’scontract with Redford, says the star pays the full 10 percent, andsigned with Ovitz simply because he is the best agent in town.Whatever fee cutting may have occurred should not detract fromthe more fundamental reasons underlying success. “They’reyounger and they’re hungrier,” says producer Leonard Goldberg(  War Games   ) of the partners. “They were willing to work longerhours and work harder, seven days a week. And it paid off …. .They’re like the other agencies used to be before they got really richand wealthy …. . ICM and William Morris got complacentbecause they were so used to just having the two of them share themarketplace.”Goldberg also credits the CAA partners for dealing with theirown clients firmly. “They are very aggressive with their clients. Inthe old MCA days you never heard an actor say he doesn’t want todo something. ‘What does he mean he doesn’t want to do it?’ [the
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