Michael Ovitz established himself as a major force in Hollywood while heading the powerhouse talent agency CAA (Creative Artists Agency) in 1975 by a group of breakaway talent agents from the William Morris agency. Under Ovitz’s direction and leadership, CAA expanded into film, investment banking, and advertising marketing. This made CAA one of the dominant figures in Hollywood. This powerful leverage and persistence provided Ovitz with one thing: knowing how to form and close deals.
Ovitz as a talent agent, managed major film stars such as Tom Cruise, Dustin Hoffman, Kevin Costner, Michael Douglas and Sylvester Stallone. In addition, he managed directors such as Steven Spielberg and Sydney Pollack. Ovitz was credited by other Hollywood power brokers with putting together the major elements of hit films such as Rain Man, Cliffhanger, and Jurassic Park. However, Ovitz’s power extended far beyond the creation of entertainment projects, as he used his deal making skills as an investment adviser for several industry transactions including Sony’s 1989 purchase of Columbia Pictures for $3.4 billion, the French bank Credit-Lyonnais’ rescue of MGM in 1993 and Matsushita’s purchase of entertainment conglomerate MCA for $6.6 billion in 1990.
Furthermore, Ovitz and his CAA army made a big impact on the advertising industry, as they won the assignment of Coca-Cola’s global advertising account in 1991. This assignment was aimed at television audiences and to innovative commercials. Not only did CAA produce the “Always Coca-Cola” advertising campaign, but also successfully popularized Coke-drinking computer animated polar bears, which we see even now in 2009.
Ovitz had a leadership strategy where his clients and deal making skills were evident in his earlier work as a television “packager.” A package is where an agency combines the elements of a proposed program, selected actors, scripts, and a director from their stable of clients. Then an agency will shop this “package” to the networks for approval and financing. This pitch and package is then agreed among investors, clients and the agents to make. However, in some cases it is known that agents themselves can receive 10% of any deal that is formed. Then the talent agency receives an overall packaging fee from the network and a percentage of the profits. In the 1970s, CAA was the first agency that packaged television programs, such as the game show the Rich Little Show and the Jackson Five Show.
Ovitz also worked with companies to help develop their new strategies in the technology industry, such as being a consultant to AT&T and to the Computer baron Bill Gates, the head of the computer software giant Microsoft. Under Ovitz’s authority, CAA also consulted with Bell Atlantic, Nynex, and Pacific Telesis to create Tele-TV. With Ovitz’s wisdom and knowledge, companies felt secure and safe when dealing with the super agent, as he used savvy business skills to lure in clients and create new channels for sponsorships and advertising, such as packaging deals and using digital media to create new market revenue.
Due to Ovitz being a prominent figure in Hollywood, he would go on with CAA to aggressively sign other talents agents and their clients. This not only increased CAA’s net value, but made the agency an international powerhouse. However in 1995, the talent industry was baffled when Ovitz decided to sell his stake in CAA and become the president of the Walt Disney Company. With this move to Walt Disney, chairman Michael Eisner made Ovitz in charge of Disney’s film studio, television production company, theme parks and resorts. Ovitz had authority in the merger and acquisition of Disney’s $19 billion investment of Capital Cities/ABC. Ovitz also integrated the companies’ products through providing various media channels, which included film, animation, television programming, publishing, cable television, and the national broadcast network, ABC.
From the early success of Ovitz’s leadership back in 90’s, CAA is still continuing to dominate in Hollywood. CAA currently represents A-list and emerging stars in movies, television, music, and sports, such as Lebron James, Will Smith, Ludicris and Oprah Winfery. This impressive list of clients can only come down to a factor: could CAA have done it without Ovitz? For an agency that started out on top of a pizza parlor in downtown LA and now dominating the industry, I’m not sure if CAA could of done without Ovitz’s leadership capabilities. What can we learn from Ovitz and his credentials? Well if you’re an inspiring agent, you need to be tenacious, have courage, think smart, communicate well, build relations and know what you are going for in the short and long term. CAA has kept this strategy in place and are ever climbing to be the best in the industry, but only time will tell if the outstanding CAA bubble will burst.
