Powerhouse: The Untold Story of Hollywood's Creative Artists Agency

by James Andrew Miller

CAA long ago ceased to be a traditional talent agency, and what started out as a television representation business had since spiraled into movies, music, investment banking, advertising, marketing, and, most recently, sports.

In film, CAA represented more Academy Award winners in above-the-line categories over the past five years than the next four agencies combined.

Katy Perry, Bruce Springsteen, Lady Gaga, David Guetta, and dozens of other artists fill the ranks of CAA Music. Billboard has named CAA Music the Agency of the Year for nine of the past twelve years, and at the Grammys, artists represented by CAA won more awards over the past three years than any other agency.

In 1925, there were fewer than twelve agencies listed in Hollywood directories, so one could almost empathize with Clara Bow, nationally famous “It” girl, and her professional suffering. Like other actors in pretalkie times, Bow seemed to be on a trajectory toward auspicious stardom, or at least marketable adorability, but also like most actors, she was a resounding flop at managing her own business—that is, the business of herself. No sooner had Bow ascended to “It-ness” in 1926 than she naively signed a contract with Paramount that became a textbook case in stars failing to benefit from their own popularity. The contract paid her less than a third of what comparable performers were earning, and after it expired, it was too late for her to find financial success anywhere. She never attained the heights predicted, and her moment of financial leverage had been wasted.

In the 1950s, Lew Wasserman transformed the talent agency MCA into a “packager” that would approach studios with already assembled teams of directors, actors, and writers.

In 1962, MCA’s dominating presence in Hollywood ran smack into the Department of Justice. Its investigation into the company’s “monopolistic practices” resulted in a face-off between Wasserman (whose beloved allies included Ronald Reagan, then in the midst of leaving the Democratic Party and becoming a Republican) and Attorney General Robert F. Kennedy Jr. To avoid criminal and civil penalties for alleged antitrust violations, MCA agreed to divest itself of its talent agency at the same time that the company bought struggling Universal Pictures and Decca Records.

During the interview, the personnel director at William Morris asked me, “Why do you think you should get this job? There are twenty people in the mailroom, and lots more who want to get in there.” And I said, “I can learn everything there is to know about being an agent in ninety days, or I’ll give you back all the money you pay me.” I knew it was an outrageous and stupid statement, but he couldn’t stop laughing. Then he said, “I’m going to hire you.”

Michael Ovitz

I was a scavenger. Those guys were waiting to be fed things; I went looking for things. I viewed the mailroom as an education course, period, and was going to move over everyone very quickly. I volunteered for every job and was very aggressive.

Michael Ovitz

The corporate culture at William Morris was, by many accounts, largely governed by the rigidly hierarchic boys’ club of old-school agents. Seniority dictated power, and the only way to rise through the ranks was a combination of working, waiting, and ass-kissing.

What happened to them is television and movies started to change as movie stars started to consider doing television. All of a sudden, you had people in different disciplines that had always been behind walled gardens working in each other’s areas, and William Morris didn’t know how to deal with it. We were watching this happen and were mortified by their lack of flexibility. It just wasn’t a culture that was workable.

I signed a guy named Bill Carruthers, who was a daytime director, and Jim Young, who did General Hospital. I put this whole coterie together. I became very interested in packaging—putting things together rather than just individually handling clients, which turned out to be the base of CAA.

RON MEYER: Steve McQueen left William Morris to go with Freddie Fields at CMA. It was a devastating loss, and right after that, Weisbord made an announcement to everyone that he had just signed the tap dancer Ann Miller, who was then already in her later years. I had been there four years and decided I would make my bones and show them all my stuff. Now, no one at my level had ever spoken—or even asked a question—in a big staff meeting. We were supposed to be invisible. But I said, “Mr. Weisbord, can I say something? We’re the greatest agency with the greatest agents in the world and Ann Miller’s a talented woman, but we just lost Steve McQueen. We should be on a full attack at CMA. We should use all our resources to sign their stars and not worry about signing midlevel clients.”

BILL HABER: In any business on earth—I always say to people—nobody will ever leave you for money, and nobody will ever leave you over titles. People will only leave if they have no loyalty to you.

MICHAEL OVITZ: You have to realize at William Morris, there were two kinds of citizens: signers and servicers. Very few people did both. Ronnie and I did both. We went out and signed people and probably had between us seventy clients.

BILL HABER: Even though we were all young, we realized that in American capitalism you can’t make any real money unless you own your own company.

Outside the agency, attention centered on the departures of Perkins, Rosenfeld, and Haber because they were venerable senior guys who were well known, enjoyed positive reputations, and had the most to lose. Meyer was less known, but more people were aware of him than Ovitz, who was the most junior and youngest of the bunch.

The Creative Artists Agency was officially launched on January 20, 1975, by five equal partners, Bill Haber, Ron Meyer, Michael Ovitz, Rowland Perkins, and Michael Rosenfeld. The founders took out an ad in Daily Variety, announcing “Established 1975, Creative Artists Agency, Inc.”—a sly poke at William Morris, which always bragged that it was established in 1892—along with the agency’s new Wilshire Boulevard address and nothing more. It was a strikingly minimalist move given the aggressive and bold agenda for the new company.

At William Morris, if you left the company, partners had the right to buy back any stock, because they didn’t want to take a chance that we would sell to outside people. So I cashed out.

BILL HABER: There were people at William Morris who told us we were going to fail. They said, “You just can’t go and start your own agency out of nothing. You’ll wind up being casting directors.” They also spread rumors we had stolen typewriters.

RON MEYER: We went after everybody’s clients, and I always felt there was a shot if they agreed to meet you. Even if they didn’t come with us, rarely did anyone ever say, “Fuck you, I’m not leaving my agent.” There were a number of times when other small agencies came to us and wanted to merge. We came close once or twice, but it never happened.

During their time at William Morris, the CAA founders had objected to WM’s television packaging fee of 10 percent of the budget, believing it was “too rich” and “people couldn’t afford it.” CAA slashed it to 6 percent, and, according to Ovitz, “it increased the volume of our business so we wound up making far more than if we had charged the higher rate.”

MICHAEL OVITZ: You’ve got to remember there was no Internet, so we took every chance there was to create an image for ourselves. Because we drove all over town, we got five Jaguars at $15,000 apiece, which was double what a Buick cost or a Cadillac at the time. I arranged a loan with the bank to finance the $75,000 and put up 7,500 bucks. Then we got license plates with “CAA” and our initials. It was a complete show of muscle, which we couldn’t afford, but no one knew that, and we had to put on a big show.

They talked about their business, and how they treated their clients. I liked them and signed right away. Afterward, Mike told me, “Each client always has two of us, and Ron Meyer is going to be working with you as well.”

Ovitz would never say who he was on the phone—not even “Hi, it’s Mike.” He would just say, “Is he in?” You had to recognize his voice, and we jumped like it was God calling, because we knew that Mike had that authority over you.

RON MEYER: We had a lot of clients who were booking episodic television with guest shots. In those days they probably paid $1,500 or $2,500 for a guest shot on a Quinn-Martin show, or The Fugitive, and we depended on a lot of that. When you book something for $2,500, your commission is $250, and even though every penny was always important to us, and the appearances were important to the clients, I realized we should get out of the episodic television business so we could concentrate on the series business and the Movie-of-the-Week business. There was a real robust Movie-of-the-Week business back then, paying actors $25,000 or $30,000 for a two-hour movie. There was money to be made for a certain caliber of talent. This was a big turning point for us, but it meant we weren’t going to be able to represent a lot of clients who depended on us just for episodic appearances.

At the Morris office, you didn’t tell each other stuff—the older agents guarded their clients, and young agents had no upside in working for the older agents’ clients. They literally would not be compensated for that kind of work. CAA’s setup was the antithesis of that. I could be compensated for what I did in a way that was extremely meaningful. It was really about a free exchange of information. It was a win-win for everybody in the agency, for the clients who were represented by the agency, and I think for the buyers as well.

AMY GROSSMAN: I did not find an uncomfortable culture within the company, vis-à-vis gender, but I was harassed sexually, certainly, out in the world. In those days, if you were to receive an unwanted advance from a man, pretty much the only appropriate response was to let it roll off your back. I have a very distinct memory of going to an appointment to see an important television executive. I was nervous; it was a big account for me to start that Bill was trying to extricate himself from—that was the whole process so the guys could move on to new opportunities and have the people under them fill in. I walked into the room and the man behind the desk said to me, “Wow, if Haber had told me what big tits you had, I would have seen you sooner.”

MICHAEL OVITZ: As part of our effort to sign more clients, we went out and befriended every major lawyer in town because that was where we thought we would get new business from.

What you learned in TV packaging—putting the elements together and representing the production—he brought to features, and he didn’t do it by coming in and assuming the mantle at a big agency; he did it by bringing in all these clients.

MICHAEL OVITZ: If they were writers, we would get material or source ideas and put them with people. If they were actors, actresses, we’d cover everything that was available for them, and they’d have five people out there working for them. That’s how we worked in the first three years—we would walk the extra mile in a business that pretty much wasn’t doing that.

ELLIOT WEBB, Agent: The CAA agents traveled in a pack, and they made great presentations. They were a new breed, and a lot of people in Hollywood wanted to help them because they were tired of William Morris and its monopoly.

MICHAEL OVITZ: We used to go to screenings and all go together and walk in together. I know this may sound crazy stupid, but it showed a solidity and it showed a different kind of thought process, that we were a group that worked together, that we weren’t just one agent with one client. That was our pitch.

We stayed close with our agents and always knew what was going on with them. This meant, for instance, if important writer clients wrote an unattached script, rather than sell it directly to a studio, we would put it together with a director and in some cases an actor or an actress, then sell it at a premium. Although we didn’t invent it, we did it very effectively and became known as a very strong packaging agency.

BILL HABER: I only handled corporations. I wasn’t allowed to handle actors. They couldn’t put me in a room with an actor. I would say to Ronnie and Michael, “Why can’t I handle actors?” And they would say, “You can’t handle actors because here’s what happens: you sit in a signing room with them, and within two minutes, you start tapping your fingers on the table.” They said I was “too transparent.” So I only handled companies, and the most important company we had, of course, was Aaron Spelling.

I said, “If you haven’t ordered dessert, don’t! Pay the check. You’ve got to get in your car and drive to LAX right away.” He said, “No, no, no—I’ve got to go home and pack a bag.” I said, “You don’t have time. You need to fucking go now.” He said, “Don’t curse at me! Who are you?” I said, “The guy who’s going to get you your job back. You’re wasting time and you need to go now.” He said, “Why? When’s the plane?” I said, “In twelve minutes.” He goes, “I’ll never make it.” I said, “You will make it. Just stop talking.” Now, there was a pay phone in the basement of our building at 1888 CPE and I had seen on Dragnet as a kid that supposedly if you use a pay phone and you put a handkerchief over it and you hang up within three minutes, they can’t trace the call. So I called up the airline and called in a bomb scare to delay the plane and hung up. Then I went back upstairs, called the airline, and a recording says, “Flight to Paris delayed.” Yes!!

MICHAEL OVITZ: There were three ways to go through the entertainment business in the ’60s through the ’90s. One was to go for money; one was to go for power; and the other was to go for fun. I decided to go for all three. I wanted money, power, and fun.

RON MEYER: They were surprised, but I told them, “At this time in our lives, I believe we can make more money being all together than splitting up, and I personally would rather make more money with less shares than less money with more shares.” For better or worse, I convinced them.

What was also important was the handoff from Ron’s efforts with Bill to me. That kind of cooperation never existed in the agency business before, where one agent couldn’t close but didn’t have an ego about it, so they called in someone else to come in and close. No one did that before in the agency business, ever. They’d keep it a secret because they didn’t want to look weak. We had no ego about that shit. We just wanted the client. That is a key part of the DNA of CAA. No ego.

BARRY HIRSCH: To Michael’s credit, he was the first agent, at least that I was aware of, that embraced lawyers insofar as being part of the original dealmaking process. I think historically lawyers, especially with agents at the William Morris office and a couple of the other agencies at the time, were looked upon as people who caught paper and went over the paper. Most agents trained in those days were really trained to go over contracts. Michael realized that by getting the lawyer involved in the beginning, he could accomplish several things: One, he would nourish the relationship with the lawyer. Two, he realized that a lawyer might make the deal even better, which would then increase his commission. Three, having the lawyer involved protected him against the lawyer telling the client, “Why did Michael do this when I could have done better than that?” And finally, if the lawyer was involved early on, he wouldn’t have to waste his time being involved in secondary negotiable points as well as boilerplate points, which meant he could jump off and move on to do another deal. To my knowledge, he was the first contemporary agent that embraced the lawyer like that.

And Ovitz seemed to me at the time to be a sort of overlord. When I was hired, I was told CAA was a family. I just didn’t realize it was the Corleone family.

DAVID GEFFEN: When I was an independent, when I had Geffen Films, I tried to do business with CAA. I tried to have a good relationship with Mike Ovitz. Unfortunately, that never seemed to work out. He’d make lots of promises and never kept them. So I had a lot of problems with Mike Ovitz over the years. I helped him get his first very big star, which was Paul Newman. I would say without question that he was always grateful and never behaved as such.

MICHAEL OVITZ: When we were recruiting agents, we had our own complete process for it. We’d go around the table at staff meetings and ask, “Have you met anybody who you are competing with that you really like?” That’s how we got Rick Nicita, Rosalie Swedlin, and Paula Wagner. We cast the company like you would cast a movie.

ROBB ROTHMAN: It was really hard to sign clients if you were a junior agent because the senior guys wanted to be signing people. There was an expression called “Sign and Schmeckle,” where the most senior agents signed someone and then turned them over to the most junior agent.

went out to California with hopes of joining the union for cameramen, but the business manager of Local 52 told me to forget about it. It would be very difficult to get in.

Ron was very hard to work for—very demanding, very specific—but he taught me things that I carry with me to this day, like you have to return every phone call every day. Even now, I lie in bed feeling guilty if I don’t return someone’s call, and I’m not even working anymore.

Bill Graham was our competition at Berkeley, and all we could do was promote punk rock bands and jazz musicians because Bill wasn’t really interested in those businesses.

RON MEYER: Here I was, at the time just an okay agent, who had this whale by the tail. I always said if I could represent just one big star, I’d sign fifty; I would know how to parlay that into building a big business. Once an agent represents a big star like Sly, people believe you know something—even if you don’t. He was my calling card. He changed my life, and I’ve always been grateful to him for it.

TONY KRANTZ: In the training program, I had written a paper that was a hundred-page document about CAA and the music business, because CAA was not in the music business at the time. My vision was not to get into the booking of bands because I really didn’t love that business, having been the concert promoter at Berkeley; it was really about a different vision, about taking brilliant musical talent and moving them into film and television—say, Quincy Jones producing a movie, a Broadway musical starring Prince, having Ricki Lee Jones score a movie, having Elvis Costello write and produce a movie, taking advantage of CAA’s core strengths and bringing music people into the fold into this new kind of music/film/television programming that I really loved. Fred Specktor was my mentor and sort of supervised the writing of this document. It was, in many ways, the artistic dream of a twenty-two-year-old guy who led with his heart but didn’t necessarily lead with the practicality of agency commission. I delivered it to Fred; he gave it to Mike Ovitz. About a week later I was made an agent, not because of that document only, but also because Robb Rothman left the TV/literary department for a smaller agency. It was unheard of that any agent at CAA would ever leave because it was so clearly the place to be, but Robb did, and I had my shot finally to begin my career at CAA.

PAULA WAGNER: I had just come to CAA. A lot of the movie stars had outpriced themselves in the marketplace. Studios were getting wind of the youth film market and they were using more and more unknowns, so I got this idea: sign all the young top talented people out there I believed in, put them in the best projects, and make them movie stars.

Finding unknowns can be risky because some people make it, some people don’t, and when that happens, you’ve already put in a lot of effort.