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Superagent’s Near Exit Could Lead to Talent Defections

June 8, 1995

BEVERLY HILLS, Calif. (AP) _ The polished marble facade of the mighty Creative Artists Agency is as shiny as ever. But the near-departure of CAA chairman Michael Ovitz for MCA Inc. may have put hairline cracks in the foundation.

After nearly two weeks of negotiating, Ovitz and new MCA owner Seagram Co. were unable to come to terms this past week on a lucrative package that would have brought the talent broker and several top lieutenants over to run the entertainment conglomerate.

MCA sources said Ovitz didn’t like the financial terms _ close to $250 million _ while CAA insiders said Ovitz and his CAA co-founders ultimately felt more loyal to the agency and its clients, which include Tom Hanks and Steven Spielberg.

Whatever the real reason, Ovitz’s serious contemplation of the MCA offer proved that the 48-year-old agent, considered one of Hollywood’s most powerful players, is restless and his days at CAA’s helm could be numbered. His near exit will likely make CAA’s star clients nervous because the agency’s management is now unstable by default.

Hours after negotiations between Ovitz and Seagram’s Edgar Bronfman Jr. collapsed, CAA was trying to put a positive spin on the agent’s near-exit. Ovitz and colleagues Ron Meyer and Bill Haber were staying, the company line went, out of a sense of allegiance: They didn’t want to abandon their clients and the ground-breaking agency they founded 20 years ago.

But CAA clients might feel they have been lied to because Ovitz and his associates said he was neither interested in the job nor negotiating for it. It’s not the first time Ovitz has dissembled, but these misstatements spoke directly to his priorities: Is it his clients or his own personal fortune and power?

While there has not been any wholesale poaching of CAA clients by rival agents so far, CAA’s star list could be vulnerable.

For all the drama, CAA is now and will continue to be the town’s dominant talent agency. It represents more than 1,000 top actors, writers, producers and musicians. Even with some defections _ Isabella Rossellini recently departed CAA for United Talent Agency _ CAA still claims the best and biggest stars. And whoever controls the talent controls the town, making the best (meaning expensive) deals and carrying the most clout.

The current CAA roster includes Kevin Costner, Demi Moore, Whoopi Goldberg, Sylvester Stallone and Barbra Streisand. Eddie Murphy, Brad Pitt and Hugh Grant are among the newest clients. CAA has struggled to attract top women, and archrival International Creative Management represents Julia Roberts, Michelle Pfeiffer, Jodie Foster, Meg Ryan, Laura Dern and Madonna.

Hollywood trade newspapers have been particularly fascinated by the future of five thirtysomething CAA agents. With Ovitz and his top associates poised to leave, CAA’s Bryan Lourd, Kevin Huvane, Jay Moloney, David O’Connor and Richard Lovett had a brief flash of owning _ or running _ CAA.

Now that such an opportunity has disappeared, the five ``Young Turks″ may become impatient, and leave.

MCA’s future, meanwhile, is bright but unclear.

No single name has emerged on the short list behind Ovitz. Bronfman, whose Seagram took control of MCA Monday for $5.7 billion, has spoken highly of Terry Semel, Warner Bros. chairman and co-chief executive officer. Semel issued a statement, however, saying he was under contract ``and is looking forward to enjoying yet another record-breaking year with the company.″

Whoever is named to replace MCA President Sid Sheinberg and Chairman Lew Wasserman will inherit a fairly healthy entertainment conglomerate.

Detailed MCA earnings released this week showed the company’s music and theme park units are generating strong cash flow, but the Universal Pictures movie division’s profit margins are lagging. Universal’s ``Casper″ has performed strongly in its first two weeks, and June 30′s ``Apollo 13″ with Hanks is expected to be popular, too.

But the July 28 release ``Waterworld″ has been criticized in a flurry of news stories for its record budget, reportedly $175 million. Some have predicted that the film cannot possibly make money.

Of course, many people predicted that Ovitz would be running MCA today, too.

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