Who Is Michael Ovitz?
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Peter Sealey asked who wanted to start. Before I could jump in, John Bergin said, “Let’s do a coin toss.” They won, and I was dying because I desperately wanted to go first. Then Bergin opted to go second, the by-the-book move to make the last impression: a final mistake.
We opened with a single slide, a calendar strip with Coke bottle images to mark the major holidays. I explained our relay race concept and stressed that our spots were designed to entertain. While I played to the Coke executives and referred to them by name, I occasionally turned to bore my gaze into McCann’s rank and file, the dazed and disoriented group at the rear. No harm in trying to intimidate them.
In closing, I said, “Pretend you’re sitting in front of your television set. You’ve had a rough day at work or with the kids. Your mind’s floating. You’re watching TV for the reason we all watch it—for passive entertainment. There’s nothing you need to do but sit there and have fun. Enjoy.”
Shelly and Len took it from there. Using their props (living-color storyboards, “rip-o-matic” videos, animation shuffle books), they acted out the commercials like a rapid-fire play. Some came with sound effects; one had Len panting like a dog on all fours. Others were introduced with an A-list name attached: “Dick Donner, the director of Superman and Lethal Weapon, will be doing this commercial.” It was a blizzard of ideas pitched Hollywood-style, with motion and emotion. Each spot closed with our tape player cuing an “Always Coca-Cola” beat.
I was prepared to jump in if needed, but their delivery was flawless. Don and Roberto were laughing at each joke and swaying to the “Always” theme. When the Latin beat came on, Roberto looked ready to glide across the floor. (He ordered two hundred copies of the tape for friends and relatives in Florida and Havana.) At McCann’s table, Bergin passed a note to the guy beside him. I caught the scrawled message: We’re screwed.
We saved our best for last: vividly drawn polar bears swigging Cokes as they watched the aurora borealis as if they were at a drive-in movie. When we needed a mascot for the Christmas season, it was Shelly who’d said, “What’s warmer or furrier or friendlier than a polar bear?” In real life, these animals are stone-cold killers. But curled up on a snow field, taking in the northern lights, they seemed positively lovable. Inspired by the bright primary colors in Bauhaus Stairway, the Roy Lichtenstein in CAA’s atrium, our polar bear vignettes became an animation landmark.
By the time Bill Haber gave a crisp summation, our momentum was an avalanche. I had the last word. Looking squarely at Roberto and Don, I said, “Give us six months and we’ll give Pepsi a run for their money. We can take them out. What do you have to lose?” I sat down. John Bergin later told BusinessWeek that my presentation “was so charming that I almost started applauding.”
Two young McCann creatives shuffled forward like death-row convicts, dead men walking. They made their first pitch, a stiff recitation off handheld notes. They began a second one—and then they crumbled. They broke off in the middle and sat down. Bergin said, “We’re done.” And they all filed out.
We had literally driven them from the field. The world’s marquee ad account belonged to CAA.
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Coke bought every one of our twenty-four ideas. We asked Rob Reiner to direct a spot for the daytime serial set. He tracked a couple’s romance from childhood to their fiftieth anniversary, with a Coke and two straws punctuating each time jump. For the soundtrack we wanted the Beatles song “When I’m Sixty-four,” a real nostalgia trigger for baby boomers like me. We used CAA’s clout to get the president of EMI to sell us the rights, albeit at a record price.
Other directors did little films for prime time, including a Tuscany shoot by Joshua Brand and John Falsey, the creators of Northern Exposure and St. Elsewhere. A Shelly Hochron special, it featured a sexy, sweaty glassblower crafting a Coke-shaped bottle while a sultry young woman watches through a doorway, clearly turned on. The sensuality and lack of dialogue were perfect for Europe. By making commercials that could travel overseas, we saved Coke millions in production costs.
The polar bear animation was outsourced to Rhythm & Hues, an L.A. visual effects studio that did wondrous things. (They went on to win Academy Awards for Babe and The Golden Compass.) We bounced their first drawings back, demanding more realism: Blacker eyes! Wetter noses! Furrier fur! Not a single execution went late or over budget. And, contrary to Ron Meyer’s fears, our clients loved the whole thing: two thirds of the commercials were shot by our directors.
“Timeline” was devised by Len Fink on an Apple IIe computer: “In 1886, Coca-Cola was invented in Atlanta, Georgia, ushering in the modern period of peace, harmony, tranquility, fire and rocks.” It was cool and funny and dirt cheap, conceived to run on Saturday Night Live. We billed Coke $35,500, exactly what it had cost us. They sent us $355,000. When we called the guy who cut their checks, he said, “It was Friday, we were closing, and we were sure you’d made a mistake.” No Coke commercial in memory, he said, had cost less than seven figures.
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In February 1993, days before our first spots hit the air, I asked Roberto to debut all twenty-four for the media in New York. Doubtful at first, he decided to trust in my enthusiasm. To avoid stealing our client’s thunder, I skipped the event. While I felt great about our work, I didn’t expect Coca-Cola to entirely share my confidence. I was stunned when I heard that Roberto ran the premiere himself.
The reporters were wowed. They watched lush stop-motion animation based on Thomas Hart Benton’s Heartland, with farmers plowing golden wheat fields to a score out of Aaron Copland. They saw a Dick Donner spaceship comedy with a big payoff. (To catch an alien impostor, the captain quizzes his crew about the world’s most popular soft drink.) We had a takeoff on Rene Magritte’s surrealist Golconda with Coke bottles dropping from the sky, and a haunting urban night scene out of Edward Hopper. From the erotic glassblower to an all-percussion spot with the Blue Man Group, our ads were wildly eclectic. But the final image for each commercial—backed by the “Always” jingle—was Coke’s “button,” a red bottle cap with the century-old trademark in white cursive. Peter Sealey told us the polar bears clinched it, and the press conference became a love fest. Journalists like to be entertained, too.
The New York Times called our campaign “as extraordinary for who created and produced it as for its unexpected freshness, breadth and playfulness. . . . Almost all [the commercials] are infused with a cleverness, an assertiveness and an edgy, yet fun-filled feeling absent from Coca-Cola advertising since the ‘new’ Coke fiasco in 1985.” Time wrote: “To the ad industry’s dismay, nearly all the new commercials introduced last week were produced by CAA. Even worse, they are terrific.” A few weeks later, Phil Dusenberry walked up to me at a New York cocktail party and said, “I don’t know where you came from, but my hat’s off to you. We’ve had to reassess everything we’re doing.”
Shortly after our first spots aired, Roberto Goizueta paid a visit to CAA. He strolled through the office passing out custom Hermès ties with a polar bear print: a victory lap.
Peter Sealey sent me a check for $10 million for the ads. Not bad, but I returned the check with a Post-it Note attached: “Pete. Let’s discuss this.” We did, and then I called Don and Robert. I was friendly but unrelenting, and Pete finally sent me a new check for $31 million. They thought it was too much. I still think it was too little. I should have insisted on a royalty for the polar bears, which they’ve used ever since.
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In the second quarter of 1994, Coke logged a 6 percent gain in U.S. case sales and a 12 percent increase in profits. By then our second campaign was airing, and even Advertising Age tipped its hat: “The new pool of 30 spots is the best Coke advertising, and maybe the best soft-drink advertising, in decades.”
CAA had demonstrated that no one had a monopoly on good ideas. We paved a two-way street
between Hollywood and Madison Avenue; in years to come, commercial directors like Michael Bay and David Fincher would migrate easily to feature films, and all sorts of people—design studios, digital shops, integrated marketing firms—would grab pieces of the advertising pie. Many borrowed the ingredients we pioneered with Coke, from a seasonal relay race to demographic tailoring to dialogue-free commercials for worldwide use. It wasn’t long before commercials, most notably for the Super Bowl, were expected to entertain.
In the months that followed, we were offered the accounts of Burger King and of GM’s Oldsmobile and Buick lines. We didn’t think we could do much with Burger King, and I told General Motors we’d only be interested if we could do all of their advertising, not just their two shakiest brands. I put it more politely than that, of course. We were also offered Kodak—but we knew, from our work with Sony, that digital photography was just around the corner, and that Kodak was basically doomed.
The overarching issue, and the reason I slow walked a lot of these inquiries, was that I had a plan with Teddy Forstmann to buy J. Walter Thompson, the huge multinational ad agency. That was my exit strategy. We’d give the Young Turks day-to-day responsibility for CAA, Ron would be its CEO, and I’d run the conglomerate, building it out to acquire other media properties.
I’d floated the idea with the guilds, telling them we were interested in an ad agency, and their reaction was violent: You can’t produce ads. We thought that getting our clients ad work would help strengthen the guilds, but they didn’t see it that way. Once again, being an agent had put me at the intersection of exciting possibilities—and prevented me from pursuing them. In retrospect, I should have just gone ahead with the J. Walter Thompson plan as a minority shareholder. CAA would take 49 percent, Teddy 51 percent, and I’d ease into the majority ownership later. It’s exactly the move Ari Emanuel and Patrick Whitesell made recently at William Morris Endeavor; they’re now producing ads. Of course, times have changed; the guilds, now eager to have work for their clients, didn’t fight WME.
At the turn of the twenty-first century, Advertising Age celebrated the top hundred people in the modern history of the field. A number of my heroes made the list: Leo Burnett, Dan Wieden and David Kennedy, Jay Chiat, Phil Dusenberry. Number eighty-seven was a surprise:
Michael Ovitz. . . . In September 1991, he rocked the advertising world by signing Coca-Cola. . . . That partnership set off bicoastal shockwaves and embarrassed longtime Coca-Cola agency McCann Erickson, especially after the soft-drink giant began airing CAA’s commercials featuring high-tech, animated polar bears and a catchy “Always” jingle. Such a la carte options still affect agency-client relationships.
We came into advertising—and went out of it—with a bang.
CHAPTER SIXTEEN
I’M NOT AFRAID OF YOU
In the early 1990s, the slumping U.S. economy created a slew of buying opportunities. With Matsushita sitting on mounds of cash, MCA could have bought a network, cable companies, a gaming company, and film libraries and made itself the industry leader. Instead it did nothing; Lew Wasserman and Sid Sheinberg flatly snubbed the Japanese. “You need to reach out to them,” I kept telling Sid. “Take them out for drinks, go to a restaurant and try their favorite foods. Go to Osaka and learn about their culture. Their arms are open. They only need to understand what you want to do.” Lew hosted one dinner in five years, and he and Sid treated the scribes like invisible men. The Americans took the money (Lew cleared $352 million in preferred stock from the deal; Sid, $92 million), but kept running MCA like they owned the place. Matsushita’s $6 billion bought it only contempt.
Finally, Lew moved to buy Virgin Records, which would have jumped MCA to the top of the music business. I warned Sid that his owners might be put off by Virgin’s name, and that he needed to help them understand what a British anchor could do for them in Europe. Sid never bothered to explain their thinking and Matsushita scuttled the deal.
It was the beginning of the end.
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My father used to tell me stories about the Seagram Company’s patriarch, Samuel Bronfman, the Canadian bootlegger who built a billion-dollar dynasty. He was a seat-of-the-pants entrepreneur, like the old studio chiefs. I could tell how much my dad respected him.
In 1985, my father turned sixty-five. I’d moved my parents to a house near us in Brentwood, but my father had no outside interests, no hobbies; without work, he’d fade away. Edgar Bronfman Jr., Sam’s grandson, was the company’s CEO. I made an appointment to see Edgar, whom I’d never met, in the Seagram Building on Park Avenue. After the usual pleasantries, I said, “I’d like to ask a favor, and I’ll owe you.”
“What’s the favor?”
“My father, David Ovitz, has worked for you for forty-five years, and he’s about to be forced to retire. I’d like you to keep him on. I’ll reimburse you whatever you’re paying him, including taxes, so it won’t cost you anything. I just want to be sure he doesn’t lose his job.”
Edgar said, “I know your father’s been with us since Chicago.” He’d clearly prepped for the meeting, which I took as a sign of respect. “He’s a wonderful guy, and everyone likes him. I’ll keep him on, and you don’t have to pay me anything.” My dad worked for Seagram until he was nearly eighty, and never knew why an exception had been made.
Edgar, the third-generation Bronfman, wanted to recast the family legacy. Seagram’s capital was tied up in DuPont, the high-dividend chemical giant that brought in two thirds of the company’s earnings. It was safe and secure, but Edgar wanted action. He began calling me during the breaks in DuPont board meetings, saying, “Get me out of here!” By 1992 he was asking me how he could buy an entertainment company. I met with his father, Edgar Bronfman Sr., the Seagram chairman who’d once had his own fling with show business (in the late 1960s, he briefly owned a controlling interest in MGM). And then I gave a presentation to Seagram’s board in which I said their best option was Time Warner, the conglomerate run by Steve Ross.
With the exception of a theme park, Time Warner checked every box on my grid. It owned a leading cable operation, the top music company (Warner Bros. Records), and more than a hundred magazine titles, including Time, Fortune, and Sports Illustrated. But Steve’s advanced prostate cancer made the company’s future precarious, as his second in command, Jerry Levin, was an unknown quantity. In M&A, instability is red meat. I connected Edgar to Herb Allen, who said, “Time Warner is the one.” Edgar heard the same from Felix Rohatyn and John Weinberg, the ex–Goldman Sachs senior partner on the Bronfmans’ board.
Edgar believed he had his father’s blessing, but he wasn’t sure about his risk-averse uncle, Charles Bronfman. When I met with Seagram’s directors, it was Charles who’d asked the sharpest questions. But I thought he’d defer to his older brother when the time came.
We had agreed that any move should be tabled while Steve Ross was alive. I had another thought—why not go to Steve and work something out? Today’s friendly investment could be tomorrow’s power play. That September I reached Steve at his beach home in East Hampton. “I want to come see you,” I said. “I’ve got an idea that might help.”
“Come on out,” he said. “I’ll send the chopper for you.”
I cleared my visit with Steve’s doctor and nurse and called his wife, Courtney, to coordinate. The helicopter met me in Midtown Manhattan and landed forty minutes later at East Hampton Airport. When Steve came to his door, it was hard not to gasp: the strapping guy with thick white hair was a gaunt shell. It broke my heart to see him.
We went into the den, where Steve whipped out his omnipresent legal pad. The nurse granted me thirty minutes, so I got to the point: “Steve, I’m here because Seagram is willing to put six billion cash into your company, right now, to be used at your discretion. They want two board seats. They’ll sign a standstill for three years, so they won’t be moving in to take it over.”
“Sure,” I said. “But I have the feeling Jerry Levin will view this as a threat.”
“I’m still running the company,” Steve said. “And this is what I want to do.”
Ed Aboodi had no formal title. He was the emperor’s trusted counselor, which made him formidable: as he wasn’t subject to the usual chain of command, it was hard to leverage him. When I met Ed at the Palace Hotel, I could sense that I had no traction. I inferred that he had already aligned himself with Levin, who knew that Steve was terminal.
When I met with Levin not long after, my fears were confirmed. Some people were fooled by Jerry’s turtlenecks and meek demeanor, but he was a bare-knuckled infighter who had risen to COO by outmaneuvering his competitors. When I told Jerry what the Bronfmans were thinking, I hit a wall. “We’ll take the money,” he said, “but no board seats.”
I said, “You know, Jerry, the Bronfmans want to be in this business. They love your company and you’re pushing them into a difficult position.” My hint of a hostile play didn’t perturb him. Steve no longer had the juice to lock things down. Our deal was dead.