Michael Ovitz: Why I Really Left CAA (Exclusive Book Excerpt)
“The truth is I had always been faintly embarrassed to be an agent,” writes the CAA founder in his new memoir, revealing how he lost Barbra Streisand as a client, tried and failed to take over Universal and endured an explosive fallout with his friend and partner Ron Meyer: “I felt like I was getting divorced.”
Michael Ovitz, Ron Meyer and their Creative Artists Agency lorded over Hollywood for most of the 1980s and ‘90s. Ovitz, to some, was a master negotiator who took on the studios and skillfully tipped the scales in favor of his A-list clients. To others, he was a Machiavellian bully whose tactics built CAA into a talent powerhouse but who flamed out when he became Michael Eisner’s deputy at Disney and eventually turned all of showbiz against him. Meyer, smooth and savvy (and now vice chair at NBC Universal), was in many ways Ovitz’s opposite, but their partnership and friendship created the perfect one-two punch at CAA. Until it all imploded in late 1995. In this excerpt from Ovitz’s new memoir Who Is Michael Ovitz?, Ovitz, now a Silicon Valley investor, recounts the run-up to his decision to leave CAA, the agency he and Meyer founded with three William Morris agents in 1975, his failed effort to take over Universal Pictures parent MCA (then owned by Seagram liquor family the Bronfmans) and the “crushing” falling-out with Meyer when his longtime partner decided to join the company without him.....
One day in 1995, I called Barbra Streisand with big news: I’d found a home for her romantic comedy The Mirror Has Two Faces. TriStar wanted Barbra to produce, direct, and star. The money was excellent for an actress who was fifty-two, an age when leading roles become exceedingly scarce.
"They’ll pay you eight million dollars against a percentage of the gross," I told her.
"Barbra, it's a great deal," I said. "Plus, you get to make the movie you want to make." In the Brooklyn accent she never lost, she said, "Why can't you get me what Redford gets?"
Always strangely competitive with Bob, Barbra launched into a lecture about sexism in Hollywood and how women were overlooked and underpaid. She was right, of course. Despite inroads by players such as Sherry Lansing and Dawn Steel, it remained an uphill fight. But she was going on and on and on. Maybe it was the pressure of the corporate work, or too little sleep. Maybe I had taken one too many such calls in twenty-seven years of massaging celebrity egos. But I blurted out something an agent should never say to a superstar.
"Barbra," I said, "you know my fifteen-year-old son? All he and his friends think about is girls, but you're no longer on their list." Barbra laughed — but I wasn't sure what kind of laugh it was. Amused, or outraged? Horrified, I started laughing myself, pretending it was all a joke. Then I changed the topic to a minor deal point and wound the call up as fast as I could.
As I laid the phone down, wincing, I saw my assistant staring at me. "You’re gone, aren’t you?" she said. Yes, I was gone. I gave Ron the blow by blow and told him how upset I was. "You’ve got to get out of the agency business," he said, empathetic as always.
I never stopped loving artists and the creative process. But agenting was a young person’s game. At forty-eight, having run since my first day at William Morris, I was tired. I was tired of getting up at 6:00 a.m. and squeezing in a workout while on the phone with Europe. I was tired of rolling through three hundred calls a day, talking till my throat was raw. I was tired of having lunches and dinners scheduled three months out. I was tired of flying six hundred hours a year, the equivalent of one workweek a month. I was tired of owning six tuxedoes for the thirty obligatory events between November 1 and Christmas. It was time for a change.
On April 11, 1995, two days after Seagram and Matsushita closed, The New York Times ran a story headlined "New Thriller: Will Ovitz Go to MCA?” For a long time I had wondered what it might be like to lead a studio. Time Warner and MCA topped my list. Michael Eisner had repeatedly asked me to join him at Disney, but I kept saying no. I had held out for one of my dream jobs, and now I had been rewarded. Once Universal had a critical mass of CAA clients under contract, it could expand in every sector. We'd produce more movies and TV shows, more books and music albums. The same talent would help give us a digital presence in mobile telephony and video games.
Soon everyone would be carrying a cell phone, and those phones would be receptacles for data-rich content. With Ron replacing Sid Sheinberg and Bill Haber running Universal Television, I had no doubt we could flourish. Seagram's Edgar Bronfman was a hands-off chief executive. I was wary of Edgar senior and Charles Bronfman, but I thought I'd be able to get things done. I was about to become a very wealthy man.
But executives I considered as my peers — Michael Eisner, Barry Diller — were raking in hundreds of millions in stock options. My appetite for corporate buccaneering grew as I worked with Herb Allen and mingled with Fortune 50 CEOs in Sun Valley. It grew further whenever I lost an auction to an art collector with deeper resources.
I wanted to play in that league, too. And in truth I had always been faintly embarrassed to be an agent. As much as CAA had professionalized our field, it would never be a noble calling. I wanted to be one of the six people who could say yes to a movie without scrounging to assemble all the elements ahead of time.
Using Ron as my agent, I asked Edgar for 10 percent of MCA and agreed to take 5 percent. I was attacked later for being greedy, but it struck me as a reasonable ask. Many large companies set aside up to 10 percent of their stock for employee options, and the math that worked for me to run this large corporation was simple.
I was walking away from CAA, worth at least $350 million at the time. Five percent of a $6.6 billion company came to $330 million in equity, enough to recoup the cost of leaving CAA, cover Ron and Bill and their equity in the agency, and pay for the other senior agents I wanted to bring along. I'd be taking a sharp pay cut, but it was all about the equity. I thought we could grow MCA to a dramatic multiple of that $6.6 billion.
By late May of 1995, Edgar and I had an understanding in principle. As he flew to Montreal to report to the Seagram board, I tried to tamp down the growing angst at CAA. On June 1, I gathered the staff to confirm I'd been approached but that nothing was decided. I was still wavering, but Ron pleaded with me to carry the negotiations through, for both of our sakes. "It's time to try something new," he said. "You need a bigger playpen and you've trained your whole life for this. Besides, how bad can we do compared with Lew Wasserman and Sid Sheinberg?"
I met with Edgar in Los Angeles to close. Hours later, Edgar asked to see me again. "We're going to have to renegotiate," he said. "They won't accept the terms." They, of course, were his father and uncle. I broke the news to Ron, who calmly said that he understood. I convened the entire staff in our theater and announced that none of us were leaving.
I could feel relief surge through the room, and the whole company rose into a standing ovation. As people hugged one another, I watched the Young Turks — Richard Lovett, Kevin Huvane and Bryan Lourd — who were standing together in the front row. They kept their arms folded, resentfully, and I suddenly felt real alarm. I recognized the mulish look on their faces; it was just the way the five of us had felt at William Morris twenty years earlier: restless, underappreciated, ready to make a move. The difference was that they had great clients — whom Ron and I had given them — considerable authority, and financial security.
Yet I believed I could patch things up with the Young Turks, if only to buy time for an orderly succession while I scouted our next play. I liked the possibility of Time Warner, where Gerald Levin looked shaky. Ron and I could work miracles there. We could do anything as long as we hung together.
Early in July, Ron called from New York one afternoon.
"Guess what?" he said. "I've met with Edgar and there’s been a change in plans. He wants me to run MCA and I think I'm going to do it."
I felt completely numb; frozen with disbelief. The job on the table, chief operating officer, was what I'd negotiated for Ron in my last go-round with Edgar, with one big difference: I was out of the picture. (Edgar would bring in Frank Biondi as the CEO Ron reported to.)
After a long silence, when I felt that I could speak without my voice breaking, I told Ron how much I needed him, what it meant to have him at my side. I'm great at pitching even when I'm not sincere, and I was a thousand percent sincere, so it was my greatest pitch ever. I was sure he'd be won over.
What came back, in a burst of rage, were all of Ron's pent-up grievances. How I had undernegotiated for him with Edgar and overnegotiated for Bill Haber because I'd valued them equally in my ask. How I had made a big mistake by walking away from MCA, and how it had always been all about me, never about him. How it was time to strike out on his own, to be recognized as something more than my consigliere.
I tried to sell him for two hours, as the knot in my stomach swelled into my throat. Finally, my voice faltered and I gave way. His mind was made up. I felt absolutely crushed. Ron was leaving, and taking the best, most human part of me with him. It felt like I was getting divorced.
After I hung up, I tried to add up the mistakes I’d made with Ron over the years. One problem was money, our way of keeping score. Both Ron and Bill banked big slices of my corporate deals even though they’d had next to nothing to do with them. But knowing Ron's feelings, I should have done more.
Money was important to me, but not as important as Ron's friendship. My second error was even dumber, because it wouldn’t have cost a dime to fix. From the start, CAA was antihierarchical. We dispensed with the usual title pyramid and rotated the heads of our departments; I introduced everyone as my partner. For years my business card had just my name, no title.
But once I started meeting with Fortune 50 CEOs, I needed formal standing, so in 1990, I became CAA's chief executive officer. Ron was named president. I should have made Ron the CEO and called myself the chairman. Because he'd never brought the matter up, it never occurred to me what that kind of recognition might have meant to him.
When I looked at my partner, I still saw the brash young man with the cojones to flirt with Genevieve Bujold. I saw the guy who hung out with the biggest stars in the world like he'd grown up with them. I had forgotten that Ron was a high school dropout who craved approval just as much as I did — maybe even more.
The biggest problem was that our friendship never quite recovered after I put him in handcuffs for his poker debts back in 1987. I should have taken Ron aside to talk to him about how he was doing, reestablished that unshakable bond, made it clear that I was with him through thick and thin. But men like me weren't too good about opening up, about acknowledging our fears.
And so his resentment festered. I didn’t want to be who I'd become, and Ron didn't, either. But we were who we were. To this day Ron tells people, "I’m the best number two in the world." And I have to hand it to him — he’s lasted as Universal's number two for more than twenty years, through four different owners. I couldn't have done that.
As I was about to learn in the most painful way possible, I suck at being number two.
Adapted from the book Who Is Michael Ovitz? Reprinted with permission of Penguin Random House Books and Portfolio. All rights reserved.