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

by James Andrew Miller

The corollary was an agency was an interesting place to start because it was the crossroads to everything and a lot of people got their starts in the agency business. And they’re the one place that takes people with no experience and trains them.

The old adage in the booking business was “You can never get the popcorn and the peanuts.”

TONY KRANTZ: When the music division was getting started, Tommy Mottola, who was one of Mike Ovitz’s friends, said to Mike, “If you can get somebody like Tom Ross, I’ll give you every act we have.” Bob Cavallo and Sandy Gallin said the same thing.

We used to have meetings with Prince, and he was quite unusual, to say the least. He would sit in the room with his back to us, and we weren’t allowed to make eye contact at any time. We were told, “Do not look at him. If you look at him, you will probably lose a client.”

MICHAEL OVITZ: Prince called me up and told me that he didn’t want to record for Warner anymore. He said, “Can you get me out of it?” I said, “I don’t know,” so I called up Mo [Ostin], and Mo said, “Michael, I’d love to help you. I can’t let him out. He’s too good.” I said, “I’ll talk to him.” So I went and talked to him. He called me back like a month later and he said, “You know, I decided that I’m not Prince anymore.” And I said, “Who are you?” He said, “I’m the artist formerly known as Prince. Please advise my record label that Prince is no longer.” I did, and they let him out.

PHIL KENT: For the most part, Prince was kept far away from us by his team. One day he woke up and found out he owed Warner Bros. Records an enormous amount of money, we heard maybe $10 million or more—and he freaked out and fired his lawyers, fired his managers, publicists, and business manager. Michael thought he didn’t fire us because we were doing such a good job, but Tom said, “I hate to break it to you, but I don’t think he knew we represented him.”

Mark told me, “David, it’s completely different from ICM. It’s all about massive communication. If you don’t communicate here, you are gone. It is team first or you’re out.” And he was right. Although there were really good people at ICM, the attitude was We’ll give you some rope and you can hang on to it or you can hang yourself with it. Nobody was going to help show you how to make it all work.

MICHAEL OVITZ: We were putting movies together without the studios. TriStar was working out of an office in Century City when we gave them The Natural. We just used their checkbook. We brought the script for The Natural with Levinson and Redford attached to it. We also delivered Kim Basinger, Glenn Close, Bill Brimley, everybody in that movie. We walked into TriStar with a full script by Roger Towne and director’s notes. There was no guesswork. At the same time we packaged Places of the Heart with Sally Field, which won Academy Awards. That was their first release, The Natural was their second. Do you understand? We were a studio. We didn’t go to somebody and say, “Would you like . . . ?” We went to people with movies ready to go. We did all the development work. We did the casting.

RICK NICITA: I was never a volume kind of agent. What I call a volume agent is an agent who descends upon every square possible, wants an offer for every movie, and just keeps showing the client how much they’re doing. Everything has to be a building block for the next one. I tell every client they’re going to be underpaid or overpaid. They’re never going to be properly paid. If this one is too little, you’ll get too much another time. But if you do great, the money will find you. You’re going to be fine. Don’t worry about it. You’ll get there. I had a client, Kevin Kline, who if he got a big offer I’d be apprehensive about telling him because he was suspicious that any big offer was not a good movie—“If they’re offering me that much, then there must be a problem.” So I’d have to play down what he was offered.

WHOOPI GOLDBERG: They built a wall that was supposed to be an outdoor wall to look like I was walking across a building, but they built it sort of at building height. I took a look at it and said, “I’m not going to do that!” And they kept on telling me to do it, so I threw my shoes at the producer and said, “Fuck you, I’m not doing that.” Then I called Ron and said, “I know, I’m an asshole, but what the fuck?!” And he was real calm and said, “Okay, I will take care of this.” I needed to be protected not only from myself, but from the craziness that was moviemaking in those days. I hadn’t been spoken to the way people were speaking to people. I was black, but I also thought that I was an actor, because that’s what I’d always been. And suddenly people were touching my hair, saying, “What are we going to do with it?” Ron would say, “Listen, these people don’t know any black people who aren’t working for them. They just don’t know any better. You can’t just hit people because they grab your hair and say stuff.” Because I would punch people and say, “Get out! What are you doing? Who are you talking to?” My head would explode. But what I came to understand is that they didn’t know any better. Ron really kept me from getting into too much crazy trouble. Fundamentally Ron’s a street kid and I’m a street kid. So he understood that there are many ways to deal with stuff. He would be able to say to people, “Relax. Leave her alone so she can do what she needs to do and she’ll be fine....

JOHN PTAK, Agent: There was a concept at CAA: “Hold the offer.” Hold the offer basically means even when you hear that your own client is turning it down, you don’t go back to the studio so quickly and let them know that. We may have somebody else at the agency who would be perfect for that and we could flip it to them and position the project for them to get the next offer. Something like that really never happened anywhere else, because the team concept was the bottom line.

RON MEYER: I didn’t lose a lot of clients. Agents lose clients for a variety of reasons: first and foremost, an agent not getting enough or the right work; second, not having a good enough relationship with the client; third, a client meeting another agent who convinces them they can do a better job no matter what; and fourth, some of these clients just having plain bad luck and holding their agent responsible. Shit happens.

RICK NICITA: Firing a client was an art. You told them that the agency wasn’t really working well for them, that it wasn’t personal, and that you knew they would be better served at another agency.

Ovitz’s line was “Think Yiddish. Dress British,” which wasn’t his but he used it all the time. Be kind of crafty but dress with class.

We probably looked a bit uncomfortable because we had never worn suits and ties, but in those first few months we followed company policy and dressed the CAA part. She looked at us and said. “If you’re going to be in a suit and tie, I can’t sign here.” And Tom walked her down the hall to Mike Ovitz’s office and said, “Martha, tell Mike what you just told me.” And that was the last day that we had to wear suits and ties in the music department.

Mike sat me down and said—and he wasn’t nice about this at all—“Listen, I own 55 percent of the company,” which by the way, only a few people knew at the time, “and nothing is going to happen to you unless I say so.”

SANDY CLIMAN: The entertainment industry is full of complex characters who have tremendously strong qualities as well as humongous flaws. For me, the goal has always been to study good qualities in order to learn what to do, and equally important, to study negative qualities to learn what not to do.

Sometimes I would ask him how he could be involved with such a lousy film and he would say, “We don’t smell them, we just sell them.” But there were times when I would ask, “How’s this movie?” and he would be really honest about whether it was good or not, and he had a pretty good track record—rare for many people, agents included. Here is another point. After I saw a movie on which he gave a review, I almost always agreed with his take. That was important, because later on, when I was going to hire him, I felt like I could trust his taste. But while he was at CAA, I always knew I was the buyer and he was the seller.

About Michael Ovitz

My first day, Ovitz came into the conference room to eyeball us. He asked for our schools, and when he heard mine he said, “You’re overqualified,” to the tune of you will never make it. It was a blast. I did runs during the day and read at night. Everything was fun. Hard work with no money makes you poor and bulletproof, so what the hell did I have to lose?

I learned a lot about time management from Bill and Ron. One time I walked into Bill’s office, and I simply sat down, and he said, “Don’t sit. This isn’t a meeting. This is just a conversation.” He never had chairs at his desk on purpose, so nobody would plop down.

SANDY GALLIN, Manager: There are some differences in the agencies, but I think there’s a bigger difference in the particular agent who’s looking out for you—and how much they’re really looking out for you. Mitch Rose sent me the Milli Vanilli album. They had only released one single, and I listened to the album and I thought, Oh my God. They are going to be huge! Enormous! Gigantic! I told everyone in my office, “Find Milli Vanilli. Get them to my house or to the office. I want to meet with these guys. They are going to be enormous.” We found them, met with them, and signed them. They had a horrible, horrible, horrible record deal. So I went to London to meet with Frank Farian, who was their producer, and I told him you’ve got to give them a new deal. They’re working for slave labor. And he said, “You don’t understand. They don’t sing.” I told him, “No, you don’t understand. Obviously they sing well enough that millions of people are buying their records and they have had one hit number one record. And the second one is on the way.” So again he says, “No, no, no. You don’t understand! They don’t sing!” And he gets mad and pounds on the table. Diana Ross was in the restaurant, and came over and asked, “Sandy, are you okay?” I said, “Yeah. I’m fine.” She said, “Well, you don’t look fine. This guy looks like he’s going to kill you.” She said, “My bodyguards are outside at my car if you need them.” Mitch Rose and CAA evidently had no clue they were the vocals on the record. So...

There was a moment early on that to me really defined Jay. He wasn’t an agent yet, and Madonna, who was a CAA client, was playing Anaheim Stadium. At this time, she was a big music star, but CAA wanted to get her acting career going, so they decided to bring a lot of studio people, big people in the business, to the stadium so they could see her. The agency organized buses to go from their offices in Century City to the stadium, and others followed in their private cars. Jay was one of the people who had to make sure everything turned out okay, and so he brought me. We all got on the bus, got down there, saw the concert, and then after went to the underground parking lot to get on our way home. Jay walks up to the guy at the gate and hands him this gigantic stack of garage tickets for all the buses and cars and a ton of validation stickers, so everyone could get past the gate. And the guy at the gate just says, “Nope, can’t do that. You have to take each sticker and put it on each ticket.” There were a lot of tickets. I was standing right there, and Jay says, “Look, I have all these important people who need to leave right now. It’s really late. Please do it this way,” and the guy just says, “No.” Jay tried to reason with him once more, but again, the guy wasn’t budging. Finally Jay said, “Okay, you’ve given me no choice,” and you know that wood bar that goes up and down that blocks passage to a parking garage? Jay went up to it, grabbed it, pulled it, and broke it totally...

MICHAEL OVITZ: Jerry Weintraub once said to me, “You’re going to get to be so powerful that at some point, people will start saying you did things you didn’t do and that you were in places you weren’t.” I laughed at him at the time, but that’s exactly what happened.

At first Ovitz refused to grant screenwriter Joe Eszterhas’s (Flashdance, F.I.S.T., Jagged Edge) request to be released from his CAA agency contract. Typical industry practice is for agents to grant releases to their clients if they are unhappy. During the meeting when Eszterhas announced his intentions to leave CAA for ICM, Ovitz allegedly told him, “My foot soldiers who go up and down Wilshire Boulevard each day will blow your brains out,” according to Eszterhas. Eszterhas detailed Ovitz’s comments in a four-page missive that circulated throughout Hollywood, with the Los Angeles Times calling it “The Letter That’s Shaking Hollywood.” “I knew when I walked in that you wouldn’t be happy—no other writer at CAA makes $1.25 million a screenplay—but I was unprepared for the crudity and severity of your response . . . you said that you would sue me,” Eszterhas wrote. “‘I don’t care if I win or lose,’ you said, ‘but I’m going to tie you up with depositions and court dates so that you won’t be able to spend any time at your typewriter.’ You said, ‘If you make me eat shit, I’m going to make you eat shit.’” Eszterhas also alleged Ovitz threatened to damage Eszterhas’s relationship with his attorney, Barry Hirsch, and with Irwin Winkler (the producer for two Eszterhas films, Music Box and Betrayed). CAA issued a response from Ovitz denying all of Eszterhas’s allegations. The Writers Guild of America later released a statement that absolved CAA of responsibility for Eszterhas’s claim...

JEREMY ZIMMER, Agent: The building was a symbol of power and artistry and the best of the best in I. M. Pei and the materials they used. The location was so key, you just couldn’t deny it. It was everything you would want to accomplish with a building, and that you would want a building to accomplish for you. But when we needed more space years later, we wanted to do the opposite of what CAA did, because all we kept hearing from people was “Oh, man, this new building: we hate it”; the clients hate it; and the agents hate it. It’s cold, imposing, and just a statement about power.

We always made it a point to take really good care of the agents who worked for us. They were all overpaid. We wanted to reward them and also make sure no one else in town could afford them. We would literally ask each other, “How much could this person get somewhere else?” and we’d give them 30 percent more. There were a good chunk of our agents making over a million dollars in the late ’80s.

RON MEYER: But the other part of it was, I would say to Mike, “You know, if we keep on increasing everyone year to year the way we have been, one day we’re going to wake up and not be able to afford them anymore.” Mike told me, “Don’t worry, one day we’re going to sell this place, and we need to keep everyone happy until then.”

A CAA actor and a CAA director make a really good movie, and then another actor calls their agent there and says, “Why the fuck wasn’t I up for that role? I’m at CAA. I didn’t even get a meeting on that.” They have to deal with that constant conflict of interest, which never goes away.

MICHAEL EISNER: When I was at Paramount, I had felt at various times that I should go out on my own, and I would say to Michael Ovitz maybe we should do something together, because I did represent him. But he would always change the subject. It was clear he really liked CAA and that job. As the years went by, however, he began to bristle at California state laws that restricted him as an agent, and when we talked, I could tell he was getting restless. That’s when he started doing the investment banking.

RAND HOLSTON: We took great care of the clients, not only their careers, but their personal lives—their kids, their wives, whatever they needed. We were 360-degree agents. Whatever was needed, we did it.

MICHAEL OVITZ: At the end, one hour before we’re set to take off, they said, “So if we were interested in looking to buy a motion picture studio, how would we pay you?” That’s what the question was. I looked at Hirata, straight in the eye and I said, “Hirata-san, if I provide a service that you find worthy and productive but does not result in anything, I expect nothing but my expenses.” And then I said, “But if, Hirata-san, I provide a service that you find worthy and productive, and if the price is to your satisfaction and you buy a company, I will then expect you to take a Brinks armored truck, load it with money, and send it to my house.” There was a beat because the translator has to translate. Then he bowed so deep, his head almost hit the table. We shook hands and we left.

Mike and Bob would take an Ambien and sleep for eleven hours.

MICHAEL OVITZ: On my first trip to Osaka, Hirata walked me into a room ten feet square. On the floor were twenty-five or thirty neat stacks, a couple inches apart, with cover letters on them from every investment bank in the world, thanking them for meeting, talking about their fee schedule, attaching a contract and information about their company, along with research on all the movie studios. Hirata had me look at it; then he looked at me, smiled, and then we walk out the door. He turned every one of them down and took me because I was the only one who asked for nothing, which is how they wanted to do business. They wanted a handshake. I never signed anything with them.

SANDY CLIMAN: For a studio head, Lew took an extremely modest salary, and the payout from his stocks was $300 million, also a relatively small payout for a lifetime of work in a company Lew largely founded. Other studio heads, with much shorter tenures, earned far larger salaries and had highly lucrative stock incentives. Lew took care of the shareholders rather than enrich himself.

Once in a while Mike would ask one of us to deliver a veiled threat to a studio executive to ensure cooperation. I never did. It was counterproductive, and there were far better ways to ensure a proper outcome.

JEFFREY KATZENBERG, Executive: There is no question that Michael Ovitz is someone who consistently dealt in ways that were destructive, deceitful, and in bad faith.

I’d sit there and look at my wife and be like, my God this is one of the greatest nights—we’re really inside the highest reaches of the movie business. If they didn’t like the movie they said fuck you in ten minutes.

Alec Baldwin

He said, “Look. I have a lot of clients who were raised Jewish. And I have a lot of clients who were raised Catholic. My Jewish clients are all guilty about their success and my Catholic clients are all guilty about their sins.” He said, “Sydney’s the only client I have who’s guilty about the whole thing.”

A lot of people, including the executives at Columbia, were afraid to come on the set of Boyz N the Hood, down in deep South Central Los Angeles—not with those Mercedeses and Beemers—so because of that, I had a lot of autonomy.

I tried to get them to sign Ice Cube off Boyz N the Hood. They didn’t sign him. It was par for the course of business. A certain segment of the industry back then thought all pop culture was white. There’s a small section of the business that realizes that the world is bigger than that. But all CAA had to do was sign everybody I put in my movies to see the impact I could have.

We used to meet at Morton’s, and before we went there for the first time, he said, “We’re not just going to lunch; I want you to watch and see what happens.” So they sat us right in the middle of the whole restaurant, and within the first ten or fifteen minutes, everyone there had made their way over to say hello, and everybody wanted to talk about a deal with him. I said, “Man, it’s like everybody wanted to come over and kiss the ring.” He said, “I always get the middle table so I can see everybody, and everybody can see me.” I took that note.

Magic Johnson talking about Michael Ovitz.

MICHAEL OVITZ: To be a great agent in those days, you had to be a mini-expert on the beginnings of any subject. I had 250 magazine subscriptions. I was a strong believer in general knowledge. Every time I went to an event, an opening, a dinner, or a meeting, I was given a short briefing card on one of our buck slips by one of my assistants, and it generally had everything I needed to know.

TONY KRANTZ: I was aware that we were paid very handsomely and most of our compensation was paid via our bonus at year-end; perhaps it was 80 percent bonus, 20 percent draw over the course of the year.

MICHAEL OVITZ: The thesis for CAA that we developed was to be able to play roulette with a chip on every number, odd and even, red and black.

When Bill Clinton came to CAA’s Beverly Hills headquarters on December 4, 1993, Ovitz used the occasion not as a coronation of the president, but of CAA itself, going so far as to make sure competitors were left off the invitation list.

MICHAEL OVITZ: Post the first five years, TV was not that important to us. The company went from a 99 percent television revenue business to a humongous music business, and even with that, movies were sometimes as high as 80 percent of our revenue.

MICHAEL OVITZ: When people started losing to us, they started passing rumors that we didn’t pay full commission, like we took 5 percent or 2½ percent, and we’d get clients calling and potential clients’ business managers saying, “So-and-so will come but they want the special deal.” We used to laugh about it because we didn’t have a special deal. Nobody. No one. Aaron Spelling, Spielberg, Kubrick, all paid us. We asked for one thing: loyalty to the company and 10 percent if you’re a client. And we never, ever took less than 10 percent from anyone except in music and in TV packaging. So all these rumors that Sue Mengers spread around—“the boys take less than 10 percent”—we never did. Ever. None of us. Ron and I held that line. I remember I signed Al Pacino and he called up and said, “I’d like the 5 percent deal,” because William Morris told him to say that to us. And I said, “Al, we’d love to handle you, we don’t have a 5 percent deal. When you’re ready to pay what everybody else pays, call me.” He came back and paid us, and stayed with us.

You need to realize that the agency is going to do what’s in the interest of the greatest number of clients or the most important clients. I was very practical; I knew that five other guys had to say no before I got the part. Dustin Hoffman once said to me, “Alec, we’re all in line; some of us are just in a shorter line.”

MICHAEL OVITZ: Imagine being John Henry Rowland Perkins the III locked in a business that was 90 percent Jewish in those days. When we left William Morris, it was a very difficult transition for him. We were loyal to him; there was never a year when he brought in as much as he made, but we were happy to carry him for close to twenty years.

JACK RAPKE: I don’t think Michael wanted anybody to succeed away from CAA because it would then send the signal: Oh, there is life after CAA.