Who Is Michael Ovitz?

by Michael Ovitz

As I’d become more involved in the New York art scene, I’d begun to see parallels between art and fashion and movies and television—a connection among all things creative. The more deeply I understood painters and sculptors, the better I related to film artists. Art deepened my feel for writers, in particular. When one of them pitched me an idea, I had a stronger visual sense of its possibilities than before. I could see how it might work on the screen (or not work). I had a frame of reference for production design, even lighting and costumes. I could be a more useful part of the conversation.

If a potential client was reluctant, I’d say, “You should take all the time you need. No pressure.” And by “no pressure,” I meant, “No pressure until the next time I’m in touch, which may be in an hour.” I tried to avoid coming across as a nudge, while making myself ubiquitous and inexorable. The smarter clients could see what I was doing, see how it worked, but it worked nonetheless because everyone wants to be wanted. And the realization that your would-be agent has a plan to handle whatever may be coming, and that he can execute it, is reassuring.

Creating a zone of calm, in a chronically overexcited world, proved disarming. Whenever disputes arose with a studio, and I had to deal with an exec sputtering with outrage, I’d go even calmer and say, “I’m confused about something.” Or, slightly more aggressively: “Could you educate me?” They’re expecting you to ream them, and you’ve put them at ease by being neutral and mildly curious. Also, you’ve gotten them talking, and you’re learning. It preserves your options.

Another move I developed, almost unconsciously, was ground shifting. If someone on the other side of the table very confidently asserted a number that was confidential or that was plausibly in dispute—the budget of a rival studio’s competing film, for instance—I would instantly say “It’s higher” or “It’s lower,” depending on which served our interests. That assertion would throw the other guy off balance, and suggest that I knew everything, when in truth I only knew some things. At the very least, it would give me a gauge of how solid their information was, and how confident they were. If they fired right back with “No, you’re absolutely wrong,” I’d just say, “That’s not what I’m hearing from the highest levels,” or something equally ominous, then change the topic.

We instituted CAA’s famous gifts office in the late seventies on the uncontroversial theory that people love free stuff. I had learned about gifting from my father, with his bottles of Seagram’s. So one of my assistants kept track of all our clients’ hobbies and charities. When an agent found out some new bit of relevant data—Tom Hanks is taking scuba lessons, or the like—it got passed to the gifts assistant via a buck slip, or interoffice memo. The next time the client had a birthday or a book coming out or a movie shooting, he’d get an outdoor watch or a nice piece of luggage or, say for Paul Newman and Tom Cruise on The Color of Money, an ornate pool cue. When Ron told me Sylvester Stallone admired my old Ferrari, I gave Sly the title. When Laverne & Shirley became a hit and I kept redoing Penny Marshall’s deal, I told Paramount’s Gary Nardino, “By the way, add a washer and dryer as a gift. From you to Penny.”

Except for start-date gifts, my rule was that important gifts shouldn’t be disposable: no champagne, no muffin baskets. Instead, rare first editions from Heritage books, ancient Greek coins, paintings and prints, even the occasional car—sturdy, thoughtful presents that would last. If a client was paying us $500,000 a year in commissions, and we spent $5,000 on a gift for him or her, it didn’t hurt us much and it made the client feel fabulous. Our gifts office spent more than $500,000 a year, and generated a ton of good will (though we did send one writer for The Simpsons the same Weber grill on three separate occasions). Every Christmas we gave Tiffany key rings or the like to the secretaries of our favorite executives, and we messengered over $500 to $1,000 to our favorite restaurant owners and maître d’s, those who’d made us seem more important at the beginning than we actually were—Ronnie, Tommy, Julius, and Pearl at Chasen’s; François and Anna at Harry’s Bar; Tom at Yamamoto’s; MaryLou and Monte at Scandia; Peter and Pam at Morton’s; Nobu at Matsuhisa; Giorgio and Elena at Giorgio’s; Jimmy and David at Jimmy’s; Gigi at the Palm; and on and on.

If we were trying to transition a client whom I’d signed to the agent who’d be handling him day to day, 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.

By the late seventies, studio contracts, and the studio system, had been a thing of the past for nearly a generation. And actors and directors had paid the price: public meltdowns, stalled careers, needless scandals, bankruptcies. We stepped into the breach by providing full-service management. Our rote functions, called on every half hour, were getting clients a copy of a film, theater tickets, or reservations at a hot restaurant. The next level of ask, which often rose to my desk, was someone who needed to get their children into a school, or needed an appointment with the best knee guy or a high-powered divorce lawyer. The highest level ask, which occurred strangely often, was for an audience with the pope. We couldn’t swing that—wrong religion—but we always said we’d look into it.

I laid out the deal, a more radical version of what we had done on Twins—a fifty-fifty joint venture between the studio and Michael and Steven, who’d waive their above-the-line fees up front. Costs came off the top. Once the gross covered the budget, every subsequent dollar would be split down the middle. If the movie flopped, my clients wound up with nothing. But Jurassic Park’s story and talent made that a smart gamble. As Universal was mired in a long dry spell and desperate for a blockbuster, Sid didn’t come back to us asking for 70/30 or 60/40 or even 55/45. He came back with a yes. We’d moved from typo-ridden manuscript to fully financed studio commitment in less than a week. And Steven was finally a CAA client! We never actually had that conversation or filled out any paperwork; I just started representing him from that point on, taking it for granted.

In one of his essays, Michael wrote: If you want to be happy, forget yourself. Forget all of it—how you look, how you feel, how your career is going. Just drop the whole subject of you. . . . People dedicated to something other than themselves—helping family and friends, or a political cause, or others less fortunate than they—are the happiest people in the world.

Underneath a New Age veneer, he was a tough customer. “I’m very spiritual,” he once said. “I connect spiritually with my inner self, then I go out and I try to fuck people.”

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.

By this point, with MGM/United Artists on life support, major studios were beginning to look like an endangered species—a terrifying development for agents because sellers had no leverage without multiple buyers. We were helping Matsushita to acquire a studio, but also helping the entertainment business to stay afloat. I felt like Louis Brandeis, who, after he spoke on behalf of competing interests in the United Shoe Machine Trust matter, was asked whom he actually represented. “I represent the situation,” he replied. Less nobly, I was delighted by the prospect of jousting with Lew again. I knew we wouldn’t end as friends—but then, we hadn’t started as friends. I stood for everything he deplored in the new Hollywood, from the ever-rising cost of production to artists’ demands to call their own shots. One of us would win this battle, and one of us would lose.

The real culture gap wasn’t East versus West; it was hardware versus software. If you’re the industry leader in videotape recorders, you design a dozen different boxes, but the pieces inside are the same. Your engineers tell you how long each part will last before breaking down. It’s all hard numbers. A movie idea, on the other hand, has no intrinsic worth. Give the same concept to ten directors and you’ll get ten different films. Film artists don’t make a garment from a bolt of cloth—they create the cloth. The finished product’s value is subjective, your taste against mine.

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 couldn’t Coke do the same? Ads were expensive because Madison Avenue bankrolled its own commercial houses and then marked up each fee by as much as 18 percent. CAA could undercut them by going straight to the talent. Our directors worked on big, draining movie projects. Many of them would jump at the chance to make a miniature film with total freedom for a six-figure paycheck. I grabbed a legal tablet and jotted down our manifesto: Holiday relay race. More commercials. Demographically stimulated. No “one sight, one sound.” New music, new graphics. Hire creative people.

The reporters were wowed. They watched lush stop-motion animation based on Thomas Hart Benton’s Heartland, with farmers plowing golden wheat fields to a score out of Aaron Copland. They saw a Dick Donner spaceship comedy with a big payoff. (To catch an alien impostor, the captain quizzes his crew about the world’s most popular soft drink.) We had a takeoff on Rene Magritte’s surrealist Golconda with Coke bottles dropping from the sky, and a haunting urban night scene out of Edward Hopper. From the erotic glassblower to an all-percussion spot with the Blue Man Group, our ads were wildly eclectic. But the final image for each commercial—backed by the “Always” jingle—was Coke’s “button,” a red bottle cap with the century-old trademark in white cursive. Peter Sealey told us the polar bears clinched it, and the press conference became a love fest. Journalists like to be entertained, too.

Meanwhile, though, the skies were darkening over our core business. Reality television, which William Morris dominated, was crowding out our scripted programs. Fewer movies were produced each year, reducing demand for our clients. Prices had slumped for midtier actors and directors, a warning sign for our A-list. It won’t be long, I thought, before the studios begin to squeeze our gross percentages—or to reject our packages altogether. In ten years, did I want to be like an overworked mechanic trying to keep an old car on the road? (While CAA remains a force in entertainment, almost everything that I feared has come to pass. Growth in television is confined to cable—where talent makes much less than it does at the networks—and in the movie business there are very few gross-percentage players left.)

As Marc and Ben led me into their world, I felt like a privileged student in a graduate school of one. After they sold Opsware, I asked Marc about joining their angel investment group. “Funny you should mention that,” he said. “Ben and I are thinking about doing something more formal.” As their venture capital firm began to take shape, I coached them about how to make Andreessen Horowitz stand out. The idea that took was to offer a full menu of business services—a novel approach in venture, whose stars tend to be one-man bands who freelance out of a larger firm.

In other words, Marc and Ben set out to be the CAA of Silicon Valley. They borrowed our roots to give themselves gravitas the same way I had borrowed from Lew Wasserman and Sun Tzu. In essence, the firm linked all the partners’ networks and added specialists to strengthen the whole organism. No individual “owns” an account at Andreessen Horowitz; investments are chosen by joint approval of the general partners, with the entire staff having a say. Then the team provides in-house experts to assist its start-ups with recruitment, budgeting, operations, sales, publicity, IPO rollouts—whatever an entrepreneur might need.

While other venture firms seek out executive talent for their clients, Andreessen Horowitz goes further. It develops ties with the Valley’s best software engineers, designers, and product managers, helping them with introductions and career counseling. At times it connects these engineers and managers to one of its portfolio companies, but often there’s no direct payoff. It does the same for top Valley executives, much as CAA negotiated employment contracts for studio executives. Andreessen Horowitz aims to forge long-term relationships that might eventually prove helpful at a future start-up, or as part of future deal flow. And Marc and Ben’s thesis has worked brilliantly. They have rapidly established themselves as one of the nation’s top five venture firms, with prescient investments in Facebook, Skype, Stripe, Airbnb, GitHub, Instacart, Lyf...

Silicon Valley is a true meritocracy. The best idea with the best execution wins. In Hollywood I was always going to be judged against my own legacy at CAA, whereas in Silicon Valley I was judged simply on the ideas I brought to the whiteboard. My big mistake, in retrospect, had been starting AMG when I should have moved to Silicon Valley and become a principal in the tech revolution. The Valley ringingly echoes my shouted belief that hard work and good ideas are an unstoppable combination. The press is full of worries about the rise of China, but I remember the same worries about Japan a generation back, and what I see in the tech community makes me confident that American ingenuity will withstand this challenge, too.

I’m now working with at least twenty-five other companies, and new ones get in touch every week. I find that my “value add,” as they say, is advising on how to monetize a technology, how to market it, and how to avoid some of the pitfalls I fell into at CAA. I don’t always know the right move—who does?—but I can often help steer founders away from mistakes of inexperience: from making short-sighted hires, or needlessly alienating a rival who might become a collaborator, or not planning for the long term. Founders are much more interested in my mistakes (which can often be generalized to their situation) than in my successes (which were often particular to the agency business).

Then I added that one way to conceptualize how to think in business is a martial-arts precept: “If you aim at the target, you lose all your power. You have to hit through the target to really smash it.” To get where you want to go, you have to set out to go even further.