Managers hold on while industry shifts

Feeling threats, opportunities during changing times

When Industry Entertainment partner Keith Addis recently went looking to add a talent manager to his company's roster, he didn't exactly need to hang a Help Wanted sign.

Industry, which counts as clients some of Hollywood's top writers, directors and actors, has been flush with employment inquiries lately, especially since the merger of WMA and Endeavor resulted in the layoffs of a host of top talent agents. Addis ended up hiring former WMA motion picture literary agent Sarah Botfeld, but not before she made a clean break from her former agency.

"We've been specific with her about what she can and cannot say to those clients," Addis says. "What she can say is: 'This is what I'm going to do. I'm excited about the people I'm working with, and if I can ever be of service to you, you know where to find me.' "

Botfeld is not alone in making the shift from agent to manager. While the industry has been abuzz during recent weeks about consolidation in the agency business, less discussed is the effect these changes are having on a management community that has grown exponentially during the past decade but faces the same industrywide slowdown in job opportunities.

"When I started in the '90s, there were about five significant management companies," says Brian Medavoy of the Glenn Rigberg Management Co. "Now there are probably 50 big players. With the WME shakeout, there are a lot of good pieces of manpower that did not make the cut who are now either starting management companies or joining them."

Aaron Kaplan is one of those newly minted managers. Squeezed out of WMA during the merger, he has started a management/production company, Kapital Entertainment, bringing along many of his TV clients. Nearly all didn't already have managers, but one, writer-producer Jeff Rake, recently left Anonymous Content to join Kaplan (Rake also departed WME for CAA).

"The business is continuing to change," Kaplan says. "There's still a little bit of chaos. Chaos breeds opportunity, and opportunity breeds success."

That chaos is affecting the already tenuous relationship between agencies and management companies, and between established managers and upstarts. More managers -- especially those who used to be agents -- mean more competition at a time when the industry is rattled by contraction: fewer movies, lower salaries and greater anxiety about when the next job is coming.

In many ways, the management biz always has been intertwined with talent agencies. Actors, directors and writers began taking personal managers in the 1980s as agencies like CAA grew larger and more impersonal.

"No individual agent would be able to have the personal relationship or give undivided attention to the clients; it just created this opportunity," says Alan Somers, a personal manager since he left WMA in 1979 and now a partner in Somers, Maudlin and the Rose Group.

By law, managers can offer career guidance, but only agents can "procure" work for clients. In contrast, managers may produce, which always has been a source of frustration for agencies eyeing fat producing fees and backend that managers sometimes command.

In the early years, Somers recalls, SAG franchised agents and, as part of the deal, froze out managers. "SAG had this deal with the agents where they would not favor managers," he says. "They would say, 'We only speak to the agents.' "

But beginning with early companies like Brillstein-Grey during the '80s and '90s and newer powers including Anonymous, Untitled, Management 360, 3 Arts and Generate, managers began winning seats at the negotiation table. Having the talent's ear helps, as does the perception that managers take the long view of a client's career.

The relationship changed for good in 2002 when SAG was unable to renew its franchise agreement with ATA, which represented agencies. "Now SAG doesn't police any of us," Somers says, "and the result has been an expansion of the role played by managers as well as agents."

Still, Erwin More, a manager before becoming a WMA agent, decided to stick with agenting when he was laid off. He says there are a lot of similarities in the work.

"At the heart of what we do is something absolutely the same," says More, now with Paradigm. "We're both representing actors, writers and directors, trying to do the best we can to see they succeed."

Crucial differences in culture between the agency and management communities still exist. Poaching clients, for instance, has long been a reality for agents but remains relatively rare among managers.

Addis recalls the story of Judy Hofflund when she left agenting at UTA 14 years ago to become a manager at Hofflund/Palone.

"Judy left and called a couple clients and said, 'I'm going to be a manager, and I'd love for you to come with me,' " Addis says. "She got calls that day from the heads of every single management company in town, saying: 'Judy, you're crossing the line. If you do it one more time, there's going to be hell to pay.' What that meant was we were all going to go after her clients. It made complete sense to her instantaneously."

Says Hofflund, whose client list includes Kenneth Branagh, Sally Field and Julia Louis-Dreyfus: "That's true. I am so happy to be away from the poaching culture; it's a huge relief to me. It's one of the biggest reasons I like managing better than agenting."

The seismic shifts in the agency business provide opportunities for managers in other ways.

"As there are changes in the agency world, talent relies more and more on managers to navigate through the thicket of Hollywood," says Jon Liebman, co-president of Brillstein Entertainment Partners, whose clients include Jennifer Aniston and Brad Pitt. "For good, established managers, the changes make them even more integral to their clients' lives."

Plus, clients who might have balked at paying an extra 10% to a manager are more willing to do so now that jobs are harder to come by.

"In an environment where the market is constricting, the need for more hands on deck to get the job done seems more acceptable to clients," says Anonymous manager Michael Sugar, who reps directors Steven Soderbergh and Gavin Hood.

Managers also have grown in value to clients as deals have grown more complex. A squeeze on the salaries of midlevel actors has cut cash flow, driving clients to ask managers to pursue such new avenues as branding and the Internet.

"Dealmaking has become far more complicated," says Suzan Bymel, a partner at Management 360, whose clients include Reese Witherspoon, Anne Hathaway and Kiefer Sutherland. "It used to be that actors had their quotes, and their raises were calculated based on the success of their last picture. It has become a much more creative and strategic process that differs with each project, depending upon your financial partners, the underlying material, its commercial viability and the other players involved."

Managers and agents now work closely with a marketing and branding department to help the company's talent branch out through ancillary sales, marketing deals with brands and new media.

"The new business model is you've got to work harder frankly to get the same things done," says Sam Gores, chairman and CEO of Paradigm. "Representing people used to be an easier job. You'd make a deal for a client with a major buyer and move on. Today you actually have to be smarter, work harder, piece together movies, financing and elements of TV shows. You have to look at every career -- whether it's an individual or a company -- as a brand and not get too distracted by areas where nobody is making huge amounts of money yet."

Still, the subtext of every conversation in Hollywood is uncertainty about where the representation business is going.

"Everybody is like a submarine with the periscope up, looking for land," says Joel Gotler, an agent-turned-literary manager at IPG. "If anybody can tell you what is going to happen, they really are geniuses."
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