Who Is Michael Ovitz?

by Michael Ovitz

  “Son of a bitch!”

  Sydney had the most relaxed shoot ever in Memphis—great food, friendly people. He and Tom became close. The Firm was a giant hit.

  And it would be the same tortuous process the next time around.

  * * *

  —

  When Disney was making Aladdin, Robin Williams was slotted to do three days of voice-over work as the Genie. But his ad-libbing was so wildly funny and prolific that Michael Eisner tossed the script aside and rebuilt the movie around Robin—without revising his compensation. Afterward, Robin asked me to come by his apartment in New York to discuss the issue. He began telling me about it in character, as the Genie. He was a troubled but lovable man, and he’d often take refuge in the voice of some character or other. I said, “Talk to me as you, Robin,” and he finally did, very quietly. We spoke for two hours, and I told him I’d fix it.

  I called Eisner, who tried the usual “Your client had a contract, and he got paid.” I told him Robin didn’t want any more money, but that he deserved a significant gesture of recognition for what he’d done for Disney—the movie would gross more than half a billion dollars. Michael finally agreed to give Robin a showpiece painting, such as a Picasso. I went and found a suitable Picasso at the Pace Gallery, and told Disney to send Arne Glimcher a check for $4 million. I knew that, expensive as the painting was, it was worth much more. At that point Eisner declared that the painting would remain a Disney property, but that he’d lend it to Robin. I got mad and said, “If I didn’t have a client as nice as Robin, I’d demand fifteen million dollars.” Robin got his Picasso.

  At Eisner’s surprise fortieth birthday party—and it was a genuine surprise because I threw it on his forty-first birthday—the producer Larry Gordon gave a toast to Eisner that, in passing, noted that I was always telling the studios how to run their business. The truth is I had learned, over the years, that creative people were much better at taking candid criticism than businesspeople. A Bob Towne would thank me for my notes on his scripts, but execs got intimidated and thought I was telling them I could run their businesses better than they could. I wasn’t telling them that, exactly, but there were certainly times that I thought that.

  My self-confidence alarmed Eisner in some fundamental way; he was surprisingly threatened by potential competitors. His wife, Jane, and I repeatedly tried to turn him around on his longtime deputy, Jeffrey Katzenberg, whom he was always accusing of imaginary crimes and planning to fire. There were real crimes to accuse Jeffrey of—he was dull to the point of robotic—but Michael’s main problem with him was that Katzenberg was capable and insanely hardworking, and therefore Michael’s obvious successor.

  Part of me loved Michael Eisner like a brother—he could be so charming and funny—and part of me thought he was even more paranoid and manipulative than I was. I watched him eviscerate numerous people over the years, but I always thought there were three people in Michael’s inner circle he’d never hurt: his childhood friend John Angelo, Larry Gordon, and me.

  When Michael had quadruple-bypass surgery, in 1994, I was at his side in the hospital round the clock, driven to try to fix him up. He was in terrible shape, depressed, shaky, and slow. One day, to galvanize him and get his mind back on business, I mentioned a big idea I’d had for a way to break the studio-network-cable stranglehold on content distribution. The phone companies had plugs in everybody’s walls—why not use them to bring content to the home? I told Michael I’d gone to Ivan Seidenberg, the NYNEX president, who had an eye for next-gen technology. Together we envisioned an interactive service that would combine telephony, TV, and the internet, all through existing phone wires. We’d have an array of news and sports and entertainment, with original programming by CAA clients. We had signed up not only NYNEX but also Bell Atlantic and PacTel and brought in CBS’s Howard Stringer as our CEO and Sandy Grushow from Fox to assist him, planning to rapidly establish a national footprint. It was a huge deal—CAA would get $50 million across the next five years, and own a quarter of the enterprise—and we believed we were going to completely disrupt the nascent cable industry. (As it turned out, Tele-TV was a great idea that was too far ahead of the technology: the cable “triple play” was five years off, and Verizon Fios more than a decade away.)

  After I left his hospital room, Michael immediately called Ivan Seidenberg to try to get him to leave me for a similar deal with Disney. When he struck out with Ivan, he called his deputies and had them sign up Americast and GTE to compete with us. Furious, I confronted him, but he danced away from what he’d done, as usual, and he was so sick I didn’t have the heart to press him.

  * * *

  —

  MGM was in real disarray. At a CAA movie-department meeting in the late eighties, one of our agents announced that he’d gotten an offer for Sean Connery for The Russia House, a spy picture based on the John le Carré novel. Another agent piped up: “Um, I have an offer for Michael Douglas for the same role.” Two MGM executives had gotten their signals crossed, the kind of screw-up that could prompt a star to shop for a new agency. We told both actors what had happened and got lucky—Michael passed after reading the script and Sean took the part.

  As MGM’s debt mounted, Kirk Kerkorian sold it to Ted Turner. Ted ran into financing problems and sold most of it back to Kirk, who threw it on the market once again. By then the studio was releasing fewer than ten films a year. In November 1990, Kerkorian sold MGM at a nice profit to a mystery man. Neither Hollywood nor Wall Street knew much about Giancarlo Parretti, who’d financed his $1.3 billion offer through Crédit Lyonnais, the largest bank in France. Parretti bought an $8 million house in Beverly Hills and made all the parties and premieres. I gave him a wide berth, instinctively distrusting the kinds of guys I called pop-ups—outsiders who popped up in our business looking for fun, glamour, or unrealistic profits.

  Over lunch one day Sean Connery remarked, “Damnedest thing about this guy Parretti. I met him when he was a maître d’ at the Savoy Hotel in London. I can’t quite figure out where he came up with a billion dollars.” There may have been less to Parretti’s fortune—and his home’s stunning art—than met the eye. After he gave Terry Semel a lovely small Picasso, Terry was ecstatic. Then he had it appraised and discovered it was a forgery. (Picassos in Hollywood are worth either much more or much less than you think.) MGM’s savior lost $500 million in two years before defaulting on his loan. In 1992, after prosecutors on two continents brought charges of securities fraud, Crédit Lyonnais foreclosed, and the end for MGM loomed.

  I saw an opportunity for CAA to replace MGM as the seventh major. Four out of five CAA packages turned a strong profit at the box office, and we’d been de facto executive producers for years. Why not take the next step and furnish the financing, too? My model was based in part on First Artists, a company put together in 1969 by Freddie Fields that featured Dustin Hoffman, Barbra Streisand, Steve McQueen, Paul Newman, and Sidney Poitier, each of whom agreed to produce three films. They had hits like A Star Is Born and Uptown Saturday Night, but the consortium slowly fell apart because Fields made the criminal mistake of not requiring the founders to make their big films for First Artists. Streisand did a dud called Up the Sandbox for First Artists the same year she made the hit What’s Up, Doc? for Warner Bros. I was also inspired by The Directors Company, which my old mentor Tony Fantozzi had put together at William Morris, a group founded around Peter Bogdanovich, Francis Ford Coppola, and William Friedkin. (It had a hit with Paper Moon, a critical success with The Conversation, and then it, too, slowly fell apart.)

  I wanted to assemble a group of our top directors, people like Spielberg, Zemeckis, Levinson, Scorsese, Pollack, Oliver Stone, and Ron Howard. The directors would pledge 75 percent of their projects to the cause. They’d get their normal deal, but 10 percent of their fees would go into a reserve fund to hedge against failure. After running the idea by five of the directors—all of whom said they were really int
erested—I asked Frank Rothman, the former MGM chairman and top litigator, to look into the jugular question: Could an agency produce movies? Under our guild agreements, CAA could own up to 10 percent of a production or distribution company, but I had in mind a more intricate deal, where a studio would be bought by a consortium but controlled by CAA. We’d partner with a bank, a private equity fund, and the pool of our top filmmakers.

  Frank’s white paper doused my enthusiasm. He concluded that CAA would probably get sued, and that we’d have to take on—and take down—at least two of the three guilds. Though they were less than full-fledged labor unions and eminently breakable, we had close relationships with those people. The heads of the Directors Guild and Writers Guild were CAA clients, and Bill Haber and I had helped settle the writers’ strike in 1988. The members counted on us in their skirmishes with the studios and networks. I reluctantly concluded that going to war with our clients was an unwinnable battle, even if we won.

  * * *

  —

  In March 1993, I flew to New York to meet François Gille, the multilingual managing director of Crédit Lyonnais, which now reluctantly owned MGM. After a leisurely conversation about the south of France and our mutual love of the region’s cuisine, we turned to the studio. Gille had met with eight leading investment banks. All offered the same advice: to deal with its $3.2 billion in troubled entertainment assets, the bank should break up MGM, lay off its 2,400 employees, and sell what assets were left, mainly the lion logo and sister studio United Artists’s 1,100-title film library. (MGM’s library already belonged to Ted Turner, and Lorimar already owned the famous studio lot.) On paper, that course seemed prudent, as the studio was burning through a million bucks a day. Total liquidation could shave the bank’s losses to $900 million.

  I said, “I have a different point of view. I think you should put another $150 million into MGM so it can start distributing movies again.”

  “And why would that be best?”

  “Because your bank wants to open branches in New York and do more business in America. It would be terrible public relations to fire more than a thousand Americans and plow the MGM name underground for good.”

  After letting that point sink in, I said, “I believe I can get you most of your money back, if not all of it.” CAA could jump-start the studio with a few movie packages, which would buy the French time to revive UA’s tent-pole franchises: Rocky, the Pink Panther, James Bond. New production would boost the older titles’ value. When Crédit Lyonnais eventually sold MGM, as required by the feds, it would get a much better price.

  Gille said, “No one else agrees with you.”

  I stayed impassive, but my heart leaped. In any multiplayer contest, you want to be the outlier. I told Gille, “Everyone you’ve met with is in the business of selling assets. But I’m in the business of building assets, and I think you are, too.”

  “You’ve given me a lot to think about,” he said.

  * * *

  —

  A day or two later, Gille called to say that he took my points about his bank’s image. (MGM was cherished in France, where people adored Gone with the Wind and The Wizard of Oz.) The bigger risk, Gille agreed, was to sack all those people and settle for forty cents on the dollar. The bank wanted to enlist CAA as its sole consultant.

  On the heels of our work with Columbia and Universal, our work with Crédit Lyonnais would give CAA an inside track with half the buyers in town. Yet reactions from our colleagues seemed very positive. I took calls from a dozen outside agents who were eager to see MGM saved and United Artists revived. Even rival studios felt protective of the house of Marcus Loew and Louis B. Mayer.

  Then came the backlash. In a story with ICM’s fingerprints all over it, the New York Times’s Bernie Weinraub raised a potential conflict. How could CAA consult with a studio’s owner while putting clients up for jobs in that studio’s movies? ICM’s chairman, Jeff Berg, publicly demanded that we divulge the details of our deal with Crédit Lyonnais, calling it an “unholy alliance.” He even went to the U.S. Department of Justice to ask for an antitrust investigation (which never happened).

  I understood why Jeff took his shot. ICM had ruled the business in the late seventies and early eighties, but now they were a distant second. We had signed Michael Mann, one of Jeff’s most important clients, and taken Meryl Streep, Glenn Close, and Mike Nichols from Sam Cohn. ICM still had Mel Gibson, Arnold Schwarzenegger, Julia Roberts, Richard Gere, and Eddie Murphy, but that was about it. All save Murphy were represented by Ed Limato—who was one of the people who’d called to thank me for MGM. He knew our plan meant more work for his clients.

  Berg’s next play was to front for the billionaire Bill Koch, who was toying with buying a movie studio. Believing that a premature offer could force the French to sell too low, we gave our seventy movie agents their marching orders: “Tell everyone you meet this week, and on every call you make, that the Koch story is nonsense and that Crédit Lyonnais is not selling MGM.” In the days before the internet, a unified body like CAA could shape what Hollywood was thinking. Koch helped us out with a bungled public reference to “French Lyonnais” and a press release on “Metro-Golden-Mayer.” He shelved his bid within the month.

  The entertainment press called Jeff Berg Hollywood’s second-biggest agent, but he couldn’t have cracked CAA’s top five. Ron Meyer had a far stronger client list. So did Bill Haber, Jack Rapke, Paula Wagner, Lee Gabler, and Rick Nicita, the cohead of our movie department. Not long before I met with François Gille, Rick told me that Jeff had asked to see him about the ICM president’s job. I advised Rick to take the meeting, if only to find out what ICM had in the fire. “Just listen,” I told him. “Pretend you’re a client. Let him pitch you.” Jeff sold Rick hard, saying he intended to go on a hiring spree—the standard bullshit when you’re trying to poach a top agent. He said he wanted Rick so badly that he’d pay him more than he made himself, around $1 million a year. It had to be deflating when Rick said, “I’d have to take a huge pay cut.” He was making more than three times Jeff’s offer.

  Of course, Jeff had a fair point about our work on MGM: CAA was, by design, a confluence of conflicts. Whenever CAA packaged a movie or a TV show, we represented a producer (who wanted the tightest possible budget) as well as the artists (who deserved the market rate). A week after we paved the way for Les Moonves to go to CBS, we were pitching our clients’ pilots to him. The conflicts were all out in the open, known, factored in. That’s how Hollywood worked. But I assured the guilds we’d keep hands off MGM’s creative management and off any privileged information. (It made no difference to us what non-CAA clients were making, in any case—we were the ones setting the market.) The controversy ended there.

  * * *

  —

  In 1991, when Paramount fired Frank Mancuso from the top job and stonewalled on the $20 million plus it owed him (depending on how you did the accounting), we had returned one of his many favors. I went to Martin Davis at Gulf & Western, Paramount’s parent company, and reminded him that Frank was well liked in the community, and especially so at our agency. Marty paid Frank $15 million.

  Frank was available, highly capable, and well disposed to us. My original plan was to bring in Frank under MGM’s current chairman, Alan Ladd Jr., to get United Artists up and running. Then François Gille called: “We’ve removed Laddie,” he said. “How do you want to restructure?”

  By the next day we’d assembled an alternate hierarchy: “Let’s bring Frank in as chairman,” I told François. I’d found someone else for United Artists: John Calley, the former Warner production head. Twelve years earlier, John had called it quits at fifty and moved to his thirty-five-room house on Fishers Island in Long Island Sound. When we’d met up recently in New York at Mike Nichols’s office, he’d told me, “I know your time is valuable, so let me lay it out for you. I’m sleeping twelve hours a day. I’ve read every book that’s out
there. If I stay retired, I’m going to die. I want to go back to work.”

  I instantly thought of the sad retirement of Ted Ashley, John’s old boss, and I said, “Let me see what I can do.”

  Frank was sixty and John was sixty-two. They knew how to rapidly restock the studio’s pipelines. We completed the team with CAA’s Michael Marcus as MGM president under Frank. Mike was a first-rate film agent and packager, as good as anyone available, and I didn’t care what our critics might think.

  Crédit Lyonnais went beyond my proposal to more than double MGM’s credit line and remove a mass of debt from the studio’s balance sheet. It was money well spent. By 1994, the studio was out of danger. Two years later, Kirk Kerkorian paid Crédit Lyonnais $1.3 billion to once again become the studio’s owner—more than double MGM’s breakup price.

  Frank Mancuso thrived at MGM until he retired in 1999. John Calley used United Artists as a springboard to a valedictory run as chairman of Sony Pictures, where he had hits such as Jerry Maguire and Men in Black. In 2005, a partnership headed by Sony bought MGM in a deal worth $5 billion. To this day the studio provides jobs for working actors, writers, and directors.

  Six months or so after Crédit Lyonnais engaged us, we tallied MGM’s movies in development. One agency had far and away the most clients working there, three times as many as CAA.

  It was ICM.

  CHAPTER FIFTEEN

  ALWAYS COCA-COLA

  I met Coca-Cola’s top executives at the Allen & Company conference shortly before they acquired Columbia Pictures in 1982. Don Keough, a gregarious man who’d been at Coke since 1950, was the ideal number two for Roberto Goizueta, a suave, shrewd chemical engineer. While Don shared Roberto’s sweeping vision, he also sweated the details. (On a trip we shared to Texas, he found a pay phone to report an out-of-place Coke sign in the airport.) They functioned like co-CEOs, expanding a massive Fortune 50 company built on sugar and water. And they were fun to be around.