Power Business Managers
Hollywood business managers keep an eye on more than money.
A few years ago, two of Fred Nigro's biggest clients decided to get a divorce.
Nigro, one of Hollywood's top business managers, has a reputation as a problem solver. So he invited Tom Cruise and Nicole Kidman to leave their attorneys at home and come to a meeting in his office.
"It was me, Tom and Nicole one evening in a room without any lawyers, hammering out the divorce agreement," Nigro recalls. "That was a milestone."
But it wasn't unusual. As top entertainment business managers, Nigro and his partners at L.A.'s Nigro Karlin Segal & Feldstein belong to a rare and influential breed of showbiz power player. Equal parts financial quarterback, personal concierge and father figure, they are able to manage a balance sheet as well as a fragile ego. What they're not is well-known in Hollywood.
"Nobody comes to your funeral," says Nigro, whose clients run the gamut of film, television and music. "We accept that."
And yet A-list business managers have never been more influential. The economy might be stuck in the mud and the future of entertainment cloudier than ever, but the men and women who control talent purse strings are seeing a lot more love and respect.
These days, for instance, when a business manager says don't buy a yacht, talent tends to listen.
"The other week, I had a client go on David Letterman's show, saying, 'My business manager says I'm going broke,' " recalls Scott Feinstein, another top business manager at Feinstein & Berson. "I couldn't believe it. That's the first time that has happened."
Many of Hollywood's leading business managers got their start during the 1970s and '80s, abandoning big accounting firms like Ernst & Young to specialize in catering to high-net-worth individuals. As wealthy entertainers were multiplying, many wanted steady hands to keep track of income and expenses -- and to make sure studios weren't stiffing them on their backends. Business managers like Victor Meschures and Harley Newman began preparing taxes, negotiating insurance policies, hiring investment professionals and keeping expense ledgers sound.
By the '90s, several management boutiques such as Nigro's firm and Gelfand Rennert and Feldman had established a strong foothold in Hollywood. Suddenly they were asked to do a whole lot more.
Today, if roughly 50% of a business manager's job is bookkeeping, the other half is about responding to a client's daily financial needs, scouting real estate, looking into an investment proposition, even performing credit checks on a client's personal assistants.
When Joan Rivers wanted to start selling jewelry, Nigro got a call. And Letterman enlisted Nigro's help when he was being blackmailed.
"I once had to drive out and fire a housekeeper," says Barry Greenfield, whose clients include Hilary Swank and director Joel Schumacher. "I had to arrange bail for a client's family member. I often have to call the locksmith if a client gets locked out of his house or call the plumber when the toilet gets clogged."
There are no licensing requirements to be a business manager, though most tend to be certified public accountants. "Practically anybody can hang a shingle and call themselves a business manager," says Marty Fox of Macias Gini & O'Connell.
Most agree the successful ones aren't afraid to say no to a client. In an industry famous for its material excesses, the task of persuading talent to put money away for a rainy day often falls to business managers.
Feinstein, who manages Hilary Duff and several actors on "Gossip Girl" and "Glee," says he likes to clip and save dour real estate market reports to show clients when they approach him about buying a multimillion-dollar mansion.
"We try to be honest with our clients," he says. "I'll say, 'How are you going to pay for that? "Glee" may be one of the best shows on TV, but the best case is it goes for four to six years. Your contract can be terminated at any time, and beside the mortgage, you're going to need to pay for upkeep and property taxes.' "
If a client gets a bad review or his movie tanks, an agent might downplay it to lift the client's confidence; a business manager doesn't have that luxury. Signs of trouble on the career road must be dealt with brutally and immediately.
Andrew Blackman, a business manager at Shapiro Lobel, says he keeps bourbon in his office for when he needs to deliver tough love. Feinstein says that when he calls a client with unwelcome news, he will type as loudly as possible so clients get the message he means business. Other business managers arrange sit-downs armed with earnings projections. When clients still don't see a clear financial picture, they'll pull agents, lawyers and even family members into the conversation.
"Ultimately, it's all about choices," business manager Michael Karlin says. "Many times I'll say, 'While you can afford private jet travel now, you might look back in five years and regret it.' And it has happened."
Some clients, however, can't be steered. And often the business manager will get blamed.
In January, Nicolas Cage sued his business manager, Samuel Levin, for bringing him to "financial ruin," on the hook for more than $6 million in owed taxes. Cage claimed Levin placed him in highly speculative real estate investments, overextending his line of credit with banks and financial institutions and never advising him of the financial bottom line.
Levin countersued, saying he warned Cage that he needed to earn $30 million a year to maintain his lavish lifestyle, which allegedly included 15 palatial homes, 22 cars, four yachts, an island in the Bahamas and a Gulfstream jet.
Other business managers say they don't find this episode surprising. Artists have two characteristics that tend to put their financial security at risk: the need to keep up an image and an aversion to annoyances like financial matters. Almost all business managers say they've walked away from clients who wouldn't listen to them. And many believe their day-to-day duties include as much therapy as anything else.
That intimacy gives business managers unique power within a celebrity's entourage. A business manager might know everything from the prescriptions a client needs to their role in hiring personal assistants. Plus, while an agent's job might be to find and negotiate that next big gig, it's the business manager who often influences which jobs an agent goes after.
"Agents hate it when you call and say, 'Get him work because he really needs it,' " Fox says. But that comes with the territory; it is the business managers, in the end, who know their clients best.
"When you are paying someone's bills, you know everything about them," says Evan Bell at New York-based Bell & Co. "They can lie to their doctor or therapist or agent but not to me. I will know if a client of mine is smoking drugs, gambling, running around with women. And they know it."