Who Is Michael Ovitz?
CAA's founder on building the agency that repriced Hollywood talent
Summary
Ovitz co-founded Creative Artists Agency in 1975 with four colleagues who left the William Morris Agency, built it into the dominant talent agency in Hollywood, and then failed conspicuously as president of Disney under Michael Eisner in 1995 and 1996, leaving after fourteen months with a settlement of around one hundred and thirty million dollars.
The agency-building material is the substance. Ovitz describes the decision to share commissions across the whole firm rather than let agents own their clients, which prevented the defections that broke every previous agency; the practice of packaging, in which CAA assembled a writer, director and stars from its own client list and sold the complete project to a studio, which shifted leverage from studios to the agency; and the deliberate expansion into corporate advisory work, including advising Coca-Cola, Credit Lyonnais on MGM and Matsushita on the acquisition of MCA.
He describes his methods directly, including the cultivation of information, the use of secrecy and the deliberate creation of a reputation for retaliation. The Disney chapters are the most revealing and the least flattering. Ovitz argues that Eisner never gave him authority, and also concedes that he did not adapt from running his own firm to serving inside someone else's. He acknowledges specific failures including his handling of executives and his inability to accept a subordinate role.
The book is a self-account and the score-settling is visible. Others involved dispute his version, particularly of the Disney period and of his treatment of colleagues. The material on how a services firm builds structural power over its customers is the most transferable part.
Key takeaways 8
- Sharing commissions across the whole firm rather than allowing agents to own clients prevented the defections that had destroyed every previous agency.
- Packaging complete projects from the firm's own client list shifted negotiating leverage from the studios to the agency.
- Control of information about who is available, what they will accept and what competitors are doing was the agency's real asset.
- A services firm can build structural power over larger customers by controlling access to the inputs those customers require.
- Deliberately cultivating a reputation for retaliation deterred competition and defection, and Ovitz treats this as a strategy rather than as temperament.
- Expanding from talent representation into corporate advisory work used the same relationships to reach much larger fees.
- The skills that build and run your own firm do not transfer to a senior role inside someone else's, which Ovitz concedes about his own failure.
- A senior executive hired without clearly defined authority will fail regardless of capability, and the definition must precede the hire.
Who should read it
Operators building services firms who want a case on structural leverage over customers, and executives considering a senior role inside an organisation they will not control.
Where it sits in the reference 2
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