As leader of the Creative Artists Agency (CAA) from 1975 to 1995, Michael Ovitz succeeded in increasing the importance of talent agents in the film and television industries during a key period of technological change and economic expansion in Hollywood. After a brief period as president of the Walt Disney Company (1995–96), Ovitz has been involved in talent management, as well as television and film production.

According to a fellow agent, Ovitz “redefined what an agent was” while at CAA. Ovitz modeled CAA on the legendary Music Corporation of America (MCA) talent agency led by Jules Stein and Lew Wasserman. Emphasizing teamwork, professionalism, and aggressiveness, Ovitz reshaped CAA from a small television agency that packaged programs such as The Rich Little Show and The Jackson Five Show, into a major film agency that corralled top stars, directors, and writers, including Tom Cruise, Dustin Hoffman, Barbra Streisand, Michael Douglas, Steven Spielberg, Barry Levinson, and Sydney Pollack, among others. During the early 1980s, Ovitz and his teams of agents courted contacts with access to new scripts, such as literary agent Morton Janklow, whose clients included authors Jackie Collins and Danielle Steele. These efforts resulted in successful television miniseries packaged by CAA, including Rage of Angels, Princess Daisy, and Hollywood Wives. Having signed major screenwriters, such as Joe Eszterhaus, CAA then attracted and signed top film talent with the promise that it would “package” script and talent into projects, shopping those projects around to studios for financing and production. This activist approach to securing work for clients resulted in films such as Rain Man (1988), Cliffhanger (1993), and Jurassic Park (1993), as well as flops such as Legal Eagles (1986). Although studio executives complained that CAA was superseding their producing prerogatives and raising the price for talent, the studios also benefited from CAA’s efficient packaging. In effect, CAA exploited the studios’ need for more product in the face of increasing demand due to the proliferation of multiplex theaters, home video recorders, and premium-movie cable services.

CAA’s film packaging tactic simply mirrored common agency practice in television. Since the 1950s, talent agencies have packaged program concepts, scripts, actors, and directors from their stables of clients and shopped these packages around to networks for financing and production, in return for fees representing percentages of the program’s production budget and syndication revenues. If the program is a hit, packaging fees are far more lucrative for the agency than single-client commissions because the fees are paid for the life of the program, on and off network. For example, the William Morris Agency earned at least $50 million for packaging The Cosby Show, a network and syndication hit.

Having successfully addressed the studios’ need for film and television projects, Ovitz began to focus on Hollywood’s increasing need for capital investment as well. Ovitz acted as broker between film studios and investors during several transactions that helped reshape Hollywood’s ownership structure, including Sony’s 1989 purchase of Columbia Pictures, the French bank Credit-Lyonnais’s rescue of MGM in 1993, Matsushita’s purchase of MCA/Universal in 1990, and its sale to Seagram in 1995. Seeking to apply his expertise to other fields, Ovitz also helped shape Coca-Cola’s “Always Coca-Cola” advertising campaign in the early 1990s and consulted with the “Baby Bells” (telephone and telecommunications companies) on their unsuccessful video-on-demand service, Tele-TV. By the mid-1990s, Ovitz was being hailed in the press as the “King of Hollywood” for his precedent-breaking involvement in its reshaping.

In 1995 Ovitz rattled the power structure of Hollywood by accepting a position as president of the Walt Disney Company to work with his then-friend, CEO Michael Eisner. Having just acquired Capital Cities/ABC, Eisner announced that Ovitz would help integrate the divisions of the rapidly growing entertainment conglomerate. After barely 14 months, however, Ovitz’s Disney presidency ended, and his reputation as a power broker was severely undercut.

Ovitz returned to the talent business in 1998 by founding Artists Management Group (AMG), whose clients included Leonardo DiCaprio, Cameron Diaz, Martin Scorsese, Michael Crichton, and Tom Clancy. Talent managers, unlike talent agents, are allowed to own equity stakes in their clients’ productions in addition to earning 10 percent commissions on clients’ earnings. Managers are not allowed to procure work for clients, which is the agents’ job, but only advise them as to which work to accept. In keeping with his strategy at CAA to generate work for his clients, Ovitz also started sister film and television production companies, Artists Television Group (ATG) and Artists Production Group (APG). The plan was to use the star power of the management group to drive production projects in which the stars (as well as Ovitz) would have ownership stakes despite having no distribution control.

ATG surprised the television industry by selling four of its programs to four different networks for the fall 2000 season: The $treet (FOX), Grosse Pointe (WB), The Weber Show (NBC), and Madigan Men (ABC). Although most television programs are produced by integrated film and television companies (such as Warner, FOX, and Disney) with deep pockets to absorb losses caused by the high failure rate of network programs, Ovitz decided to self-finance the independent ATG, and he signed numerous expensive pacts with talent to facilitate their participation. However, episode costs of $2 million each for the critical hit The $treet were not covered fully by network license fees (under the deficit financing system, networks pay 80 percent of production costs for the right to broadcast a program twice). ATG soon ran up huge deficits, cushioned only by Ovitz’s personal investment of an estimated $100 million. ATG produced 23 television pilots in two years, in the hope that one would emerge as a hit and in syndication generate the profits necessary to offset the failures. Unfortunately, all seven ATG programs that made it on to network schedules were canceled. In August 2001, despite having promised to produce The Ellen Show for CBS and Lost in the USA for the WB network, ATG closed its doors and sold off its assets, having succumbed to the 95 percent failure rate for new network programs. In 2002, after losing the support of major investors, Ovitz also sold control of the talent management company, AMG.

Ovitz’s efforts as a talent agent to leverage his clients’ star power into greater control over film and television projects as well as larger shares of revenues were successful from the late 1980s until the mid- 1990s. Ovitz and CAA were able to take advantage of Hollywood’s relatively decentralized production process, which—coupled with the rising demand for blockbuster, star-driven film and television vehicles in the 1980s and 1990s—allowed CAA’s agents to operate as “de facto producers” for a time. By the 2000s, however, no single talent agency retained that kind of clout. Although Ovitz subsequently followed the typical career path of former agents, working as a studio executive, talent manager, and film/television producer, his post-1995 efforts have been far less successful.