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On Aug. 11, CAA President Richard Lovett convened the agency’s monthly staff meeting not with an update on top-priority clients but by addressing a sizable elephant in the room. “This book was not sanctioned by CAA,” Lovett told the troops gathered at the company’s Century City headquarters, according to two sources who were there. The new “book” in question is James Andrew Miller’s Powerhouse: The Untold Story of Hollywood’s Creative Artists Agency, which has revealed embarrassing financial details about the company and its leadership and has led to some rank-and-file morale issues at the storied agency.
The book, which CAA did not initiate but did participate in extensively, reports that the agency’s top three partners — Lovett, Bryan Lourd and Kevin Huvane — each earned $20 million when TPG Capital made its second investment in the agency in 2014, plus $20 million for each of the three men that came out of a discretionary proceeds fund controlled by Lovett and Lourd. That previously undisclosed windfall came at a time when, according to sources, many staff members were told their own bonuses and expense accounts were being trimmed thanks to the private equity firm’s now-majority stake in the agency.
CAA is downplaying the impact of the book, but several sources say the disclosures have caused anger, especially among midlevel agents who are not part of the management team, and have prompted rival agencies to ramp up poaching efforts. On Aug. 10, as a phalanx of high-profile agents converged at Brett Ratner’s estate for an event honoring United Nations Secretary-General Ban Ki-moon, Powerhouse‘s details dominated the conversations. The book also arrives as CAA’s litigation heats up with rival UTA over the 2015 defection of a dozen comedy agents. The agencies are fighting over whether a so-called “LLC agreement” many CAA agents signed when TPG made its second investment supersedes their individual employment contracts with the agency and, as a result, would allow CAA agents to leave with 30 days’ notice regardless of the term left on their original deals. If the court sides with UTA (there are hurdles, including an alleged carve-out in the LLC agreement for existing contracts), CAA’s exit door could swing wide open at a time when staff is pouting — specifically about Lovett, Lourd and Huvane’s 2014 payout, which came on top of about $90 million the three Young Turks split when TPG made its first investment (though staffers largely were aware of that payment and also shared in the TPG proceeds on the initial investment).
At the same time, Miller and his publisher, Custom House, are said to be furious at the rampant piracy of the book. Searchable PDFs have careened around Hollywood since the 700-page oral history was released Aug. 9, prompting the publisher and Miller’s ICM agents to threaten websites posting the book, according to sources. For its part, CAA, which declined to comment, has acted quickly to warn its own employees against passing Powerhouse around via email.
A version of this story first appeared in the Sept. 9 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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