If a talent agent’s job is to guide the careers of creative people, it is an irony of the Ovitz episode that the pre-eminent agent of his generation appears to have taken his career and crash-landed it. And that Ovitz’s ultimate client, Disney chairman Michael Eisner, was the one creative person he couldn’t handle. “This is the greatest fall, from the greatest height, that I can remember in Hollywood,” says one veteran top executive. Well, that’s his spin, and this saga is awash in it. On the other side of the stage, another Greek chorus intones that Ovitz, just 50 and a man of immense drive, resourcefulness and connections, will rise again. And surely they’re right, too.
In one sense, none of this matters much: Disney’s culture rejected Ovitz so swiftly, like foreign tissue, that his 14-month tenure will leave few scars. Disney was well aware that expunging this particular piece of bad news would be less painful now, just after reporting a record year financially, just as a hit movie puts spots in front of people’s eyes. True, some major management questions remain unresolved–such as who will succeed Eisner, and who dares temper his autocracy–but the stock market duly accounted for these by docking the stock a mere $1.88, then leveling off.
Ovitz’s failure is certainly a lesson in the exercise of power in Hollywood, and the perils of image-making. But it also touches on universal questions, like: Should you work for your best friend? Wait–do these people have best friends? Part of the current fascination with the media moguls is that they begin to seem less like grasping greedheads than something extraworldly and larger than life. Somewhat ridiculously, they enact elemental story lines about greed, ego, death, betrayal and humiliation.
Especially at Disney, which always seems to make observers reach for their Shakespeare. It was thus in 1984, when father figure Frank Wells performed an amazing act of self-abnegation and turned down the job of running Disney for its new controlling owners and instead suggested that the job go to the then 42-year-old Eisner, who had been president of Paramount. There he had been No. 2 to an overbearing Barry Diller. Wells receded to the background as president, while Eisner fashioned himself as the second coming of Walt himself. Along with the even younger Jeffrey Katzenberg, they engineered one of the business miracles of recent history. It was the heady days of the “three amigos,” with a corporate image as sanitized as the products they peddled around the world.
Of course, they weren’t the three amigos. Although the company continued to prosper, the cheerful facade crumbled after Wells died suddenly in a helicopter crash in mid-1993. The role of the much beloved Wells has been somewhat romanticized. Executives say he was often on the receiving end of Eisner’s abruptness and impatience. Many tolerated this: they saw Eisner as a genius. They were getting rich. But Ovitz wasn’t to see this side of his friend until he actually went inside the company.
Katzenberg, too, had lived with Eisner’s criticism and remoteness. He felt he deserved Wells’s job. He’d been loyal, and his film division was now driving the company. Eisner was clearly annoyed at his pushing, and at the increasing limelight he was commanding, especially for his active role in the huge success of animated hits like “The Lion King.” With that relationship unravelling, Eisner underwent quadruple-bypass surgery (Ovitz, not Katzenberg, took command of the bedside). This raised questions about the issue of succession at the company. Then, in a father-son drama, Eisner suddenly showed Katzenberg the door.
Eisner at first said he didn’t need a No. 2. Katzenberg’s duties were divvied up a bit, and two executives continued to fill the Wells vacuum, general counsel Sandy Litvack and chief financial officer Steven Bollenbach, the latter credited for persuading the cautious Eisner to take a $19 billion gamble by acquiring ABC last year. But that only made his job more complex. Partly at the urging of his wife, who was concerned for his health, Eisner made a gut decision, with little other input. He would bring in his “best friend.”
By this time Ovitz, though hardly ever quoted in the press, was a wildly public figure in Hollywood. Every story just heightened the “most powerful” perception. Indeed, Ovitz associates lobbied hard to keep him atop those published lists. Once, Ovitz had stayed out of the papers, but in the ’90s he began to spread his wings. The media were willing allies. Ovitz fed the perception that he was everywhere, gliding behind the scenes. “I’m trying to protect you,” he would say in his confidential whisper. “I’ll take care of you.” Everyone always assumed he was in the middle of things, and he sometimes was. He brokered Sony’s purchase of Columbia, Matsushita’s of MCA. He put CAA in the ad-agency business. He was at the forefront of Silicon Valley’s infatuation with Hollywood (a short-lived one, it turned out). He formed an alliance with three Baby Bells. He restructured MGM for the French. Eventually, business executives from all over saw him as the gatekeeper to Hollywood. Now, none of these deals turned into resounding successes, but that was the beauty of being an agent. The deal was the thing–you weren’t accountable for the endgame.
But by now Ovitz didn’t want to be an agent anymore. He had had talks with Sony in the past, and had asked for a mammoth compensation package. Those talks broke down. Then, last year, talks to run MCA–newly acquired by Seagram–apparently blew up for the same reason: the compensation package was worth more than $200 million, but discussions got hung up on mundane matters like the tax treatment of certain CAA assets to be purchased by MCA. Ovitz pledged fealty to CAA. Then came Disney.
Eisner had his problems with No. 2s–he didn’t trust them, executives say. But Ovitz was his friend. He would be his “partner,” with operating responsibility over every division of the company. This derailed from the first. Bollenbach and Litvack, who had once feuded, now had a reason to get together, executives say, adding that Ovitz wasn’t sufficiently solicitous of either man. Bollenbach, who felt he had been teed up as Eisner’s heir apparent, left Disney to become chairman of Hilton Hotels. He returned only to bash Ovitz with remarks in a scathing Vanity Fair article. Ovitz seemed to have no facility for corporate bureaucracy. His Hollywood ways didn’t endear him to the frugal corporate types at Disney. He knocked out an office balcony to create an imperial space for himself, his Calder mobile hanging over the desk. People he should have courted felt ignored. Accustomed to operating solo and omnipotent–he was treated like a god at CAA–he would order up an idea without assembling a constituency to support it.
One such case was his attempt last spring to purchase Brad Grey’s management company, which controlled many of the big comedy names in TV and movies, a high-priced deal that few others in the company backed and Eisner had killed. Eisner seemed to lose faith in Ovitz after that incident, executives say. Another TV effort, to hire NBC executive Jamie Tarses to a top post at ABC, embarrassed ABC executives and turned NBC into an angry enemy. Much of this got into the papers. Another pricey deal was for David Letterman’s former producer, Robert Morton. ABC executives howled. And ABC was Eisner’s obsession. He’d worked there in the 1970s; he’s intimately involved with it. He didn’t like to hear ABC chairman Robert Iger chafe at Ovitz’s meddling. Ovitz’s feather-ruffling at ABC, several key executives agree, may have been the deepest of his self-inflicted wounds.
Ovitz also tried to implement what he envisioned as a companywide series of management reforms, including a weekly dinner between the six division chiefs, then weekly lunches with the “direct reports” just under them. The dinners convened exactly twice (Bollenbach and Litvack emitted monosyllabic grunts). The lunches never happened. He would try to launch ideas–like an “edutainment” plan for the inner cities–and nothing would ensue.
Eisner could have stepped in and given Ovitz what he needed, but he didn’t. Moreover, he bad-mouthed Ovitz, dressed him down, executives say. The way Eisner saw it, Ovitz was supposed to have lightened the workload; he was increasing it.
Keep your head down, people kept telling Ovitz. Learn the business. But he wanted to make his mark. He had attained his status through perception, and cared desperately about what people thought of him. They used to think he did everything. Now he had nothing to do.
Last summer Eisner and Ovitz sat down to talk about his role, but Eisner seemed unconcerned. Stay the course, he told him. But he offered no plan or support. Eisner had a way of avoiding direct confrontation, as Katzenberg had encountered. By September, executives say, Eisner had decided it was over. The pace quickened as some brutal press attention turned to Ovitz, fueled not only by Disney executives he’d angered but by legions of Hollywood people, once intimidated by him, now more willing to speak out.
Ovitz began spending more time overseas at staff meetings, and approached Sony over a plan to form a joint venture between Disney’s smallish record company and Sony’s huge one. That went nowhere, but Ovitz and Sony chairman Nobuyuki Idei began to talk about a role for Ovitz at Sony. Some say Ovitz pushed too hard on compensation; others say things never got to that point. At any rate, Ovitz let Disney executives know and it leaked around town, upping the pressure for a resolution.
Ovitz, somewhat humbled, was trying to befriend Disney executives he’d alienated, and furiously networking around town, as if to lay the groundwork for a departure he knew would come. Not quite so soon: Ovitz would have preferred a later denouement. But the press attention was getting increasingly ugly, and Eisner didn’t give him a chance to line up a more graceful exit. He wasn’t making it easy. Ovitz felt humiliated, degraded.
Last week supposedly innocent visits to Viacom and CBS were seen by some as hat-in-hand job searches. Even though the Sony talks had been off for weeks, the news that Idei was in town for a board meeting set off a new frenzy of media calls. Ovitz and Eisner stayed up till 2:30 a.m. Thursday huddled over settlement details in Eisner’s apartment, and the “mutual agreement” was announced after the market closed that day. Ovitz is said to be receiving a package of cash and stock totaling $90 million in present value, which has some Disneyites fuming. What next for Ovitz? He’s telling people he won’t work for anyone again, so he’s likely to try to tap his Wall Street connections to raise money to launch, or buy into, a company.
Meanwhile, Eisner and Ovitz will both be in Aspen for the holidays, and plan to get together. Apparently, they still think of themselves–and this is what is so truly remarkable about the soap operas of Hollywood moguldom–as the best of friends.
1964: Ovitz graduates from Birmingham High School in the San Fernando Valley, where he is class president. Schoolmates include bond dealer Michael Milken and actress Sally Field.
1964-68: Abandons pre-med at UCLA after catching Hollywood fever as a summer tour guide at Universal Studios. Lands job in the mailroom of William Morris Agency. Boss “discovers” him studying the day’s letters after hours and promotes him.
1975: Launches Creative Artists Agency. Initial clients include Rich Little (above) and Ernest Borgnine. Over the next 20 years, he builds a stable of more than 675 clients.
1988: Breaks ground on the new I. M. Pei-designed headquarters of CAA in Beverly Hills. By now, his public profile is beginning to approach his influence. Puts together the package of talent that produces the film “Rain Man,” which wins four Oscars. Among his clients are “Rain Man” stars Dustin Hoffman and Tom Cruise (right) and director Barry Levinson.
1989: His first taste of big-time corporate dealmaking. Sony hires Ovitz, who has a reputation for being Japan-savvy, to give advice on its $3.4 billion acquisition of Columbia Pictures. CAA’s take: a reported $10 million consulting fee.
1990: Brokers Matsushita’s $6.6 billion purchase of MCA/Universal, the movie studio that produced blockbusters like “King Kong” and “Back to the Future.” CAA reportedly earns as much as $40 million on the deal.
1995: Tops Edgar Bronfman Jr.’s (above) list to head Seagram’s MCA/Universal. Talks break down, reportedly because of Ovitz’s demands. He joins Disney shortly afterward.
