Who Is Michael Ovitz?

by Michael Ovitz

  The painting was nearly finished when we celebrated our new headquarters with a party in the atrium, a candle-lit dinner for four hundred clients, studio and network executives, and Roy and I.M. Noting that I.M. had never formally signed on for the job, I toasted him by saying, “Someday I hope you’ll agree to do the building.”

  While CAA’s executives were free to choose any furniture they wanted, we suggested a contemporary style. We offered two carpet colors, beige and beige-green, neutral hues to complement I.M.’s clean lines. Everybody fell into line except Bill Haber. He ordered a Technicolor Asian rug and a fake fireplace. His furniture was Louis XIV, richly carved and gilded, and his bathroom contained a bidet. It was a mild fuck-you to me, and a strong statement of who he was.

  * * *

  —

  I grew up an L.A. Lakers fan in the days of Jerry West. But the first time I saw the Lakers play live was in 1980, when a gangly rookie grabbed my attention. Earvin “Magic” Johnson moved his team down court in a style both fluid and forceful. He never lost his cool or took a shot when he could pass to an open teammate. He was 100 percent about winning. When I had the chance to buy season tickets on the floor of the Forum, next to Jack Nicholson, I jumped at it.

  Four championships into Magic’s glorious run, I took a call from Joe Smith, the CEO at Capitol Records. No one rooted harder for the Lakers than Joe, a season-ticket holder since the franchise had moved to L.A. from Minnesota. “I know you don’t handle athletes,” he said, “but you need to meet with Magic Johnson. He wants to talk about a business career.”

  “You’re right,” I said. “I don’t handle athletes.”

  “Do it as a favor to me.”

  Reluctantly, I agreed to a meeting. There was little incentive to represent pro athletes in the late eighties. The average NBA salary was half a million dollars, and the league capped commissions at 4 percent. The Lakers had fifty-plus home games a year, counting playoffs, and their agents were expected to be at every one. Limited income + heavy servicing = bad deal.

  Magic arrived on time and bent his six-foot-nine frame through the doorway. As he folded himself onto my couch, I said, “So what do you want?”

  Magic said, “I want to learn about business and investments, so I don’t end up in my forties with nothing.”

  “I love watching you play, and I applaud that you’re thinking ahead—but we don’t work with athletes,” I said.

  He called to ask for another meeting, thereby passing my first test: he was determined. This time we talked about his Lakers contract. After his historic rookie season, owner Jerry Buss had given him the richest contract extension in the history of sports: $1 million a year for twenty-five years. It was a fabulous deal—for Jerry Buss. With the prime interest rate hovering in the teens, the contract was steeply discounted the instant it was signed. I told Earvin he should be getting a minimum of $5 million a year for five years. I said the same to Buss, who agreed to go along—if I could finesse the NBA’s salary cap, which constrained what teams spent.

  I met David Stern, the league’s commissioner, in his New York office to make my case. Stern yelled out, “Bring the books!” In walked Gary Bettman, the NBA’s general counsel (who’s now commissioner of the NHL). He carried the league’s very thick, very carefully worded collective bargaining agreement. Bettman and Stern were cheerfully smug about my chances of breaking it. I needed to find another way. I went back to Jerry Buss and pointed out that personal service contracts in California were limited to seven years. He agreed to accelerate Earvin’s payments and to sell him a piece of the team when his playing days were done.

  My third meeting with Earvin was at Spago. When we stepped in, the diners gave him a standing ovation. Here was a celebrity, I saw, who was already his own brand. He just needed to make it pay off for him.

  I found Earvin bright, sincere, and open. I gave him a Wall Street Journal and told him to read the front page every day. He glanced at it and said, “I have no idea what they’re talking about. I don’t understand the fundamentals.” Just jump in, I said: “The only thing holding you back is overcoming the jock stereotype and sounding as savvy as I know you are.” I bought him subscriptions to the Journal, Forbes, and Fortune, and quizzed him weekly, over the phone, about current business deals and trends. A naturally charismatic speaker, Earvin studied tapes of his TV interviews to become more polished.

  Our first move was to pursue a Pepsi-Cola bottling franchise; we happened to know that Pepsi badly wanted more minority owners in its system. Craig Weatherup, Pepsi-Cola’s president, was looking for someone to partner with magazine publisher Earl Graves to take over the Washington, D.C., franchise, and we put Earvin up for the slot. For the first time since high school, he had to interview for a job. We swamped him with research on the soft-drink industry. We sat him at our conference table for group interrogations on Pepsi history, revenue, earnings, and marketing. We critiqued his responses over and over until we knew he was ready.

  Craig set the meeting at the 21 Club in New York, and Earvin was on edge as we went inside. But he started off warmly sociable before shifting into business mode, as we’d rehearsed, and the execs were truly impressed. When we made Earvin’s deal with Earl Graves, it was Pepsi’s largest minority-owned franchise in the United States.

  I later introduced Earvin to Sony Pictures, and he bought into their theater division and developed Magic Johnson Theaters, focused on movie houses in African American neighborhoods. Magic Johnson Enterprises has since expanded into commercial real estate, private equity, restaurants, and a cable TV network catering to African Americans—and it’s now worth more than a billion dollars. In 2012, Earvin and Guggenheim Partners purchased the Los Angeles Dodgers for $2.15 billion, the most ever paid for an American sports franchise.

  We never took a penny in commissions. I guess I was paying Earvin back for all the pleasure he gave me at the Forum.

  * * *

  —

  It wasn’t all success. One of my more dramatic slipups was Legal Eagles, a 1986 Universal release. In collaboration with the director, Ivan Reitman, I envisioned it as a buddy picture for Dustin Hoffman and Bill Murray. Then Dustin became unavailable and Bill dropped out, and Ivan retooled it for Robert Redford and Debra Winger, as a starchy assistant district attorney and a balls-out young lawyer defending her client. After An Officer and a Gentleman and Terms of Endearment, Debra was white hot. She was sexy and warm and funny and seemed poised to become the Jennifer Lawrence of her day. I thought she’d make an ideal foil for Bob, who had long wanted to try a romantic comedy. Ivan made his comedies work, and he had a solid script from two CAA clients, Jim Cash and Jack Epps Jr., who had high-concept hits in the pipeline with Top Gun and The Secret of My Success.

  I was wrong on every count. In preproduction it became clear that Bob disliked Ivan because Ivan was too commercial, that Ivan disliked Debra because she was a prima donna, and that she disliked Ivan right back. Bob and Debra had zero chemistry, and the script was all concept and no highs. When I went to Tom Mankiewicz, a top script doctor, for a rewrite, he called it a TV movie. My sinking feeling told me he was right, but it was too late to back out.

  On set, every bad relationship got dramatically worse. As Debra’s scenes with Bob flatlined, she took it out on me for getting her into this mess. One day Ivan called and said, “I think you better get out here.”

  Lightning was splitting the sky outside my window. “What’s wrong?” I said.

  “Your client is refusing to leave her trailer.”

  “Why?”

  “She doesn’t like her dialogue.”

  I sighed. “I’ll be there.” By the time I weaved through traffic to the Universal lot, it was absolutely pouring. “Okay, Ivan,” I said. “Let’s go talk to her.”

  He gave me a pained smile: “Too late.” After sulking for two hours, Debra had walked from her trailer to the soundstage in the
rain and said, “I’m ready to shoot.” By then, of course, her hair and makeup were ruined and her costume soaked. It would have taken another two hours to make her camera ready again, so Ivan just sent everyone home.

  Though Legal Eagles recouped its costs, I kicked myself for ramming it through. Debra savaged me in the press for treating her like “a commodity” and then left CAA, the first and only star to defect in my time there. Other stars got upset—Bette Midler road tested three of our agents before settling in with Rick Nicita—but we kept them in the fold. Even Debra returned to us a few years later. She was impetuous, but not so impetuous she didn’t recognize our value. When we “slapped her into something,” as she put it, she said yes. And then she cashed her checks.

  * * *

  —

  Shortly after we moved to our new building, my assistant received a call from David Rockefeller’s office, asking if they could set a time for him to ring me. “It sounded real,” she told me.

  “Tell Bill I’ll call him back.” Both Bill Murray and Dustin Hoffman called my office a lot pretending to be some celebrity, often a dead one. One day it might be a marble-mouthed Marlon Brando, the next a probing, childhood-obsessed Sigmund Freud. Just in case, though, I asked her to call David’s office in New York to verify. Two hours later, David Rockefeller, the famed East Coast philanthropist and power broker who was chairman of the board of the Museum of Modern Art, was indeed on the phone.

  “I’d like to come out and talk to you about something,” he said.

  I told him I’d be delighted, but offered to see him in New York.

  “No,” he said, “I want to take a look at your building and see you there. I’ll come to you.”

  At that point, I wasn’t easily overawed. But it seemed surreal to me that David Rockefeller would make a special trip to visit a kid from the Valley who hadn’t seen his first real painting until he was eighteen. When David walked into our building, it felt like George Washington dropping by. And when he asked me to join MoMA’s board, it was the ultimate validation—one of the great honors of my life.

  Watching how David worked taught me the efficacy of elegance and understatement, how to sell by not selling. When MoMA was launching a capital campaign, David took Judy and me to dinner, and during the three-and-a-half-hour meal never once mentioned a donation. He just talked about how great I was, how great Judy was, and how magnificent the museum was going to be. Somehow, by the end of the meal, we knew we had to give at least the minimum: $5 million.

  Even after I joined other boards and prestigious institutions, such as the Council on Foreign Relations, I never quite felt that I belonged in that rarefied world. In 1993, David hosted a dinner for Akio Morita, the head of Sony, at Glorious Food on the Upper East Side. There were only thirteen people, and the guest list included Henry Kissinger; James Wolfensohn, the head of the World Bank; and Gustavo Cisneros, who basically owned Venezuela. They were all talking about countries and the global economy, and how to pull those levers, as casual as could be. I excused myself to go to the bathroom, and I called Judy from a pay phone. “I just needed a reality check,” I said. “Why am I here at this dinner?”

  Judy said, “You’re there because you are in your industry what they are in theirs.” I didn’t entirely believe her, but it was a very sweet thing to say.

  * * *

  —

  One morning in 1987, Ron came into my office, shut the door, and said, “I’ve got a problem.”

  I said, “Shoot.” We’d had a thousand conversations that started like that.

  “I lost a lot of money in a poker game, and I can’t pay up.”

  I was shocked, but I said, “Okay, we’ll take care of it.” I figured it was a hundred thousand dollars or so. “How much?”

  “I’m not sure you’ll be able to take care of it.”

  “How much is it?”

  “Over five million.”

  As I strove to underreact, Ron told me he’d been going to Vegas several times a week. He’d make the flight after work, play deep into the night, and grab a few hours’ sleep before flying back to L.A. in the morning and working his ass off as usual, never missing a meeting.

  I was unable to process this. When Ron and I went to Vegas on business, I’d occasionally watch him play blackjack for half an hour and win or lose $500. There was no hint he gambled for astronomical stakes. He must be a phenomenal poker player, I thought. He has no tells.

  Then again, he must be a shitty poker player because he’d just lost five million dollars. That was a substantial portion of his annual income. My immediate reaction was to feel worried for him, and want to help—but I swiftly suppressed that impulse because I’d read enough about compulsive behavior to be terrified. My partner, my best friend, the guy I was tied to for life, clearly had an unconscious need to throw away everything we’d worked for. (I would later learn that Lew Wasserman’s only weakness was gambling—he, too, lost big in Las Vegas, and had to get bailed out by his mentor and close friend, Jules Stein.)

  I told Bob Goldman, our chief financial officer, “Ron got himself in a jam, and we need to help him fix it. We’ve got to sew up the cut.” We lent Ron a million dollars, and Bob canceled his credit cards. Ron swore it would never happen again. I don’t know where he got the rest of the money, but he eventually paid our loan back. I put my concerns to rest, happy to sweep it all under the rug. And I never did tell him, “Hey, I’m worried about you. What’s going on, and what can I do to help?”

  For the next year and a half, Ron and I worked harder and more closely than ever. Then one morning, he closed my door, took a seat, and looked at me with a funereal expression. “You’re not going to believe this,” he said, “but . . .” Another poker game, an even bigger loss: $6.5 million.

  I felt like he’d smashed me with a baseball bat. Who was this man?

  Ron and Bill and I were joined at the hip. The three of us signed everything together, from loans and leases to contracts; if one of us tripped, we all fell down. And I had no way of knowing if Ron was telling the truth, even now. His debt could be several times what he’d admitted—and what else might he be hiding? What if he lost $25 million at the next game?

  I was deeply, deeply shaken. Ever since Judy and I left the Valley, I’d been haunted by the fear that one day I’d have to go back. I’d done all I could to prevent that eventuality, locking every door and hatchway to our fortress—and, just as in a horror movie, I’d locked the problem in with me. The phone call came from inside the house.

  I told Bob Goldman, “Ron’s problem is back.” He grimaced. “What can we do to protect the business?”

  Bob said, “All we can do is try to control his spending—cancel his credit cards, put him on an allowance.”

  We budgeted Ron enough to sustain his standard of living and not penalize his children, but no more. This time he had to cover the debt on his own, which we hoped would deter him in the future. He borrowed the money from friends, which I found immediately reassuring—he’d put a Band-Aid on the wound—and also deeply troubling. He had a network with deep pockets and the skill set to take advantage of it, so why wouldn’t he keep taking advantage of it?

  Ron resented that I didn’t give him any more money and that I put a limit on his credit cards. (What Bob and I didn’t know was that in Vegas, Ron could easily get advances that vastly exceeded his card’s supposed limit.) But he did not strain visibly against our leash. He said, “You guys are right, I screwed up, I’m going to fix this.” I wish he’d fought with me about it so we could have gotten to the bottom of it. Instead Ron did what he did best. He handled me.

  Despite my 360-degree paranoia, I hadn’t seen any of this coming, which scared the crap out of me. I prided myself on reading people and forecasting from subtle clues. Is Tom Cruise great, or just a polite and attractive guy? Is Hal Ashby such a genius we should overlook his foibles, or is he too toxic? A
nd here I hadn’t been reading Ron right for ten years. That fact was so shocking to me that I instantly tried to forget it. I couldn’t, though, and from then on I was constantly worried that Ron would take the agency down. Still, it never occurred to me to think through the logic of the way Ron introduced himself to people as my agent—to think about how much any agent keeps secret from his client. And it certainly never crossed my mind to worry that Ron would take me down.

  CHAPTER ELEVEN

  DINOSAURS AND FOOT SOLDIERS

  By the late 1980s, with CAA established as the clear industry leader, interview requests flooded in. I hired a top New York media relations firm, Rubenstein Associates, to keep us out of the paper. But our aversion to talking to newspapers and magazines left us helpless to shape our public profile. We’d have been better served to soften our position—it might have diminished the impact of our only real scandal, which occurred in 1989.

  It began when Joe Eszterhas, whose screenwriting credits included Flashdance and Jagged Edge, decided to get a new agent. Or rather, when he decided to go back to his old one. Eszterhas was a big, bearded, noisy self-promoter who’d gotten his start as a Cleveland newspaperman, moved on to Rolling Stone, then become a screenwriter after his first script got made as the Stallone film F.I.S.T. Joe had come to CAA after his original agent, Guy McElwaine, left ICM to take a studio job at Columbia.

  Joe was a handful. What he styled as “colorful” was actually pure pain in the ass. But his energetic screenplays sold for $1.25 million, and served as the platform for lucrative packages. So we swallowed hard and reminded ourselves that it was a service business. After burning through two of our best agents in two years and bringing our tough-minded Rosalie Swedlin to tears, Joe was being handled by Rand Holston. Then Guy McElwaine was fired by Columbia and returned to ICM. Joe began telling everyone how much he loved Guy and how he felt honorbound to return to him. In September of 1989, he informed Rand that he wanted to leave. When Rand passed on the news, I winced and figured it was probably a lost cause. But I had to give it the old college try: I badly wanted to keep Joe as a client, and it was always a great tag line in pitch meetings: “No one ever leaves us.” Debra Winger had left—but she’d come back. Hell, Joe himself had left us in 1982—but he, too, had come back. Yet he was now a bigger, noisier deal, and I worried that this time he wouldn’t come back. My overriding fear was that if one big client left for good, it would embolden ten to follow, and then a hundred.