Ovitz, Michael

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Ovitz, Michael

(1946-)
Livent Inc.

Overview

Michael Ovitz became one of the most powerful persons in Hollywood during the 1980s and early 1990s. As founder and president of the Creative Artists Agency (CAA), he made important deals with talent agencies, entertainment conglomerates, actors, writers, and directors. He became known as a "super agent" for his use and promotion of the talent "package"—a combination of screenplay, actors, and director—for big studios. So successful was this concept that it established a new standard for the industry.

Personal Life

Ovitz was born on December 14, 1946, in Encino, California. His father sold wholesale liquor which afforded Ovitz a middle-class lifestyle as a child. He went to Birmingham High School where he was elected student body president. He attended University of California, Los Angeles (UCLA), where he joined the Zeta Beta Tau fraternity. Ovitz was later elected president of his fraternity.

While attending UCLA, Ovitz worked his way through school as a tour guide for Universal Studios. He explained to L.J. Davis of the New York Times that, "I came in contact with a lot of people from the agency business. I realized that there were a lot of areas in the entertainment business that I was interested in, and the career that would offer me the widest exposure to the entertainment business was the agency business. Agents can allow creative people to achieve their visions, and that's why I did it."

After graduating from UCLA in 1968, Ovitz considered going to medical school, but soon went to work as a trainee in the William Morris Agency in Beverly Hills. After a year there, he briefly attended law school but was soon back at William Morris. He married Judy Reich in 1969 and the couple has three children. In his free time, Ovitz enjoys aikido (a form of martial arts) and team sports.

Career Details

The William Morris Agency is a talent agency that seeks contracts and jobs for a variety of actors and actresses. Ovitz, hired right out of college, was put through a comprehensive and detailed training program before he was allowed to assume any of the duties of a talent agent/scout. He started off in the mail room and endured months of performing menial tasks and grunt work before he was "upgraded" to agent status. Though the dropout rate in the training program was over 50 percent, Ovitz managed not only to stay on but to rise steadily through the ranks. In time, he was representing such clients as Bob Barker, Chuck Barris, and Merv Griffin. Ovitz also developed game shows and collared contracts from two networks.

By 1974, though, Ovitz was growing disenchanted with the low pay and lack of advancement opportunities at William Morris. He was not alone in his feelings. His best friend at the agency, Ron Meyer, along with three other agents, also shared his disenchantment. The five of them started to make plans to start their own agency. When news of their plans got back to the management at William Morris, however, the five were fired in January, 1975.

Ovitz, Meyer, and the others responded by setting up shop in a small office on Wilshire Boulevard in Los Angeles. They had obtained a $100,000 line of credit and a bank loan of $21,000. With only two cars between them and their wives serving as secretaries, the group began to build the client base for their newly established Creative Artists Agency (CAA.) Ovitz used his clout and contacts from William Morris to help generate revenue at CAA. Some of his early clients included comedian Rich Little and the singing group The Jackson 5.

CAA started out wanting to be better than William Morris. To achieve this goal, CAA established lower rates than other agencies charged for their television package deals. These package deals were assemblages of the agency's writers, directors, and actors into unified packages that television networks could "purchase" as identifiable and trusted commodities. This saved the networks the extra work of having to put together the cast and crew themselves.

William Morris was unable to match the low rates set by CAA and, as a result, CAA grew by leaps and bounds. By 1980, CAA was the number three agency in Hollywood with bookings of approximately $100 million. Around this time, Ovitz sought to branch out and diversify his client base and actively sought to represent screenwriters. This enabled him to bill CAA as a literary talent agency. With a wide range of talent at his disposal, Ovitz brought the television package concept to the motion picture industry. The concept, which offered steady work to actors, was extremely popular among performers.

Ovitz had a keen ability to put different talents together. He teamed up Debra Winger and Robert Redford for Legal Eagles, and brought together Ivan Reitman, Harold Ramis, Bill Murray, and Dan Aykroyd for the hit comedy Ghostbusters. He also paired up Tom Cruise and Dustin Hoffman for the respected and popular Rain Man. By the late 1980s, CAA was handling 146 directors, 134 performers, and almost 300 screenwriters.

Social and Economic Impact

The film package deals were Ovitz's biggest contribution to the entertainment industry. As in television, the studios liked the notion that they were receiving a pre-assembled bankable commodity. As Tony Ludwig explained to Davis in The New York Times, "look at the letterhead of the CAA stationary. There you'll find a major reason so many attorneys moved their clients into the agency. It says literary and talent agency. The key is the fact that the material comes first. CAA represents an incredible number of screenwriters. They're the foundation the agency is built on. At CAA, you get the scripts you wanted. The stars followed the scripts." Fees were derived from a 10 percent cut of the salaries of the clients assembled in the package. This led to the hyper-inflated "going rates" for many actors, actresses, and screenwriters.

Though Ovitz enjoyed the power and influence he had through his client base at CAA, he eventually wanted a new challenge. After 20 years as chairman of CAA, he stepped down in 1995 to become president of Disney Studios. This was a dream come true for Ovitz—but it was not to last.

At Disney, Ovitz was second-in-command to his good friend and Disney chair, Michael Eisner. This was a role to which Ovitz was unaccustomed. Used to being in charge of his own organization, he did not adapt well to his new position and was responsible for many poor business decisions and ventures during his short appointment with the studio. Still thinking like a talent agent, Ovitz tried to lure a top executive from the National Broadcast Company (NBC) over to the Disney-owned American Broadcast Company (ABC). He also tried to lure David Letterman's former producer as well. These actions did not earn Ovitz many friends at either Disney or ABC.

Ovitz had been cautioned by a number of entertainment industry insiders to keep quiet, not to ruffle any feathers, and to lay low. But when he repeatedly ignored this advice, the stage was set for his termination. After only 14 months at Disney, Ovitz was fired in late 1996.

Disney paid Ovitz a severance package worth over $110 million, including numerous stock options. Ovitz was back in the news in early 1998, when he paid $20 million to help shore up the faltering Toronto-based theatre group, Livent Inc. Livent was responsible for the wildly successful Broadway musicals Phantom of the Opera, Show Boat, and Ragtime. Ovitz's contributions earned him a 36 percent share in the company and the title of the chair of the executive committee. His chief duties are to help the cash-strapped group increase its income, and to institute cost-cutting measures to stabilize the company. Some analysts predict that Ovitz will eventually add film to the theater company's business interests.

Chronology: Michael Ovitz

1946: Born.

1968: Graduated from University of California, Los Angeles.

1968: Started working at William Morris Agency.

1975: Fired from William Morris Agency.

1975: Established Creative Artists Agency (CAA).

1979: CAA Becomes third largest talent agency.

1995: Left CAA presidency.

1995: Became president of Disney.

1996: Fired from Disney.

1998: Became chair of Livent, Inc.

Since Ovitz gave up his role as talent agent, some believe that the art of making deals has declined. But Ovitz's influence in Hollywood is still felt. His emphasis on the casting package helped boost star salaries to $20 million. As Frank Rose of Fortune states, "Ovitz's singular contribution to Hollywood has been this obsession with the deal. As an agent, of course, deals were what he did—and whether they worked was somebody else's problem. But the media attention he got led to such a glorification of the deal that even young studio executives have developed an agent mentality; measuring success by how much they paid for that spec script or how many development deals they have going, as opposed to whether their movies work. The deal is king."