Books: Michael Ovitz Has Written the Best Business Book of the Year
“You’re there because you are in your industry what they are in theirs.” That’s what Judy Ovitz said to her husband Michael Ovitz in 1993. The most powerful man in Hollywood was at a David Rockefeller-hosted dinner in New York that included major players of the Akio Morita (Sony CEO), Henry Kissinger and James Wolfensohn (World Bank head) variety. Ovitz briefly stepped out in order to call his wife to ask if he belonged in such elite company, and Mrs. Ovitz’s response hit it on the head. In the late 20th century Ovitz was to film what Kissinger was to international diplomacy, and more realistically he was to the entertainment industry what Michael Jordan was to basketball.
In my case, I first learned about Ovitz sometime in the 1980s. I was in my teens and memory tells me that Ovitz and the talent agency he created with several former William Morris colleagues (Creative Artists Agency – CAA) was featured in the “Calendar” section of the then very thick and prosperous Sunday Los Angeles Times. As early as the ‘80s it was a known quantity that the aggressively low-profile, low talking Ovitz was the most important and most-feared man in Hollywood.
As someone who has long been fascinated by the movie industry, Ovitz fascinated me from the day I learned of his existence. And he still does. Having become a noun by the end of his rein atop CAA (Jerry Seinfeld joked that he “got the last Ovitz” when the superagent left agenting not long after negotiating a record television deal for the comedian), I’ve always wanted to know more about this famously private person. Ovitz has delivered with his unputdownable new memoir, Who Is Michael Ovitz? And while he’s clear in his book that “Mystique is ten times better than publicity,” Ovitz has finally shed some sunlight on the magic. I just wish the book had been three times longer.
Up front, this review will presume that readers are already somewhat familiar with Ovitz and the industry he transformed. At the same time it’s worth noting that the author’s story will interest anyone, so good is it. Along those lines, Ovitz’s book will be many things to many people. For those merely interested in insider-y tidbits about Hollywood, there’s lots of information in what will now be referred to as “Who” that will hold their attention. About Robert Redford, Ovitz observes that he “seemed deeply embarrassed by acting” and “took his unhappiness out on the people around him.” Ovitz adds that Redford was “one of our most difficult clients.”
Tom Cruise? Ovitz the businessman made plain to Scientology head David Miscavige that ‘”We don’t want to see Tom’s name in the paper for anything but his career.”’ And CAA largely succeeded until the talent agency and Cruise’s publicist Pat Kingsley “were no longer in Tom’s life.” Ovitz et al plainly did a good job as evidenced by their ability to keep under wraps Cruise’s odd decision to “set up a Scientology booth to proselytize the cast and crew” on the set of the 2005 film War of the Worlds.
Speaking of Cruise, it turns out that Rain Man was a movie that no director seemingly wanted. Four walked away from the script, and when the film was finally released in 1988, it was with “very low expectations.” Rain Man ultimately grossed $400 million worldwide, and CAA clients including Cruise earned “many multiples of their salaries” through CAA-negotiated shares of gross profits. The latter, versus “net profits,” is on its own, an economic lesson. Readers can expect to hear more about it in future columns. Rain Man was an example of a common practice for television that CAA brought to movies: the packaging of clients for studios. CAA didn’t just find work for its clients; rather it found great material only to bring writers, directors and cast members to studios on the way to the making of films.
As for the legendary Lew Wasserman (head of MCA, and seemingly Ovitz before Ovitz), Ovitz would eventually learn that his “only weakness was gambling.” The latter looms large in consideration of Ovitz’s longtime former business partner, Ron Meyer. He and Meyer talked “thirty times a day” and largely built CAA together. Ovitz plainly loves Meyer despite modern strains placed on the friendship that are detailed in Who. That’s what’s so interesting about his seeming revelation of Meyer’s gambling problem from the CAA days; one that led to multi-million dollar losses for the agent. CAA and Ovitz helped Meyer out of at least two financial jams, but Ovitz alludes to how their friendship perhaps never fully recovered from CAA’s #1 in Ovitz (in title, and in percentage of firm ownership) essentially putting his best friend and CAA’s #2 on an allowance while he worked off his gambling debts.
Crucial here for readers is that despite a split in their post CAA friendship that led to Meyer badmouthing Ovitz all over Hollywood, Ovitz can’t help but think the world of Meyer. By Ovitz’s own regular admission in Who, Meyer was his “agent” inside CAA and around Hollywood. As Ovitz puts it toward book’s end, “Money was important to me, but not as important as Ron’s friendship.” So while it would be interesting to hear Meyer’s side of the story, Ovitz indicates that he and Meyer (he’s now Vice Chairman at NBCUniversal) are on good terms. Better yet, Ovitz acknowledges throughout Who just how much he regrets not taking care of what had Meyer so frustrated.
After that, I read Who as an economics writer. While Who belongs on any list of excellent business books, my reading is invariably focused on the economic lessons that can be learned from the business exploits of the prominent. Ovitz very much delivers in this regard. Like Phil Knight’s Shoe Dog, I’ll be quoting Who for a very long time. Ovitz probably didn’t know it as he wrote his memoir, but his business life instructs better than the economics books that academics cruelly foist on students.
For one, Ovitz’s grand achievements are a reminder to the redistributionists in our midst that wealth is never foreordained. Brilliant as Ovitz is, CAA’s evolution into the most important institution in entertainment was far from a sure thing. For one, the agency that Ovitz, Meyer and a few others left (William Morris) was intent on crushing CAA before it even got started. And while they didn’t succeed in squashing the nascent talent agency, the early days were lean: for office space they leased “in a lower-end building” at “the very edge of Beverly Hills.” For operating money, the founding partners “scraped together $100,000 by putting up our homes as collateral.”
Once in their “bargain-bin” building, Ovitz et al “brought in folding chairs and card tables for desks, and our wives each came in one day a week to answer the phones.” They had one paid assistant (a bookkeeper), and “two cars among the five of us.” For Ovitz himself, with CAA a start-up he wasn’t making much money early on. In that case, Judy Ovitz booked modeling jobs at Bullock’s (a long gone department store known to west coast readers), and worked in the lounge of a long lost airline, PSA. It was only after 2 ½ years during which CAA’s founding partners “netted nothing” that “each partner was able to take $80,000 out of our profits.”
But even with CAA on the path to success, Ovitz was still not comfortable. He recalls that “there wasn’t a day when I didn’t walk in the door and get hit by a rush of anxiety. What idea can I come up with today to pay the overhead?” We’re talking about someone who grew up on the wrong side of Muholland Drive in the unfashionable San Fernando Valley. Ovitz doesn’t hide that a driving ambition for the son of a liquor salesman was to get out of the Valley (literally and figuratively), and never look back.
All of this rates mention given the view on the left that the creators of great wealth must “pay their fair share” in taxes, and that they need to “give back” to seemingly atone for their success. Sorry, but Ovitz’s story is yet another reminder of how wrongheaded those beliefs are. Ovitz earned his wealth the hard way. It’s his. This is a liberty thing. That Ovitz knows how to allocate his wealth (he’s built a second career as an investor and advisor to Silicon Valley start-ups) exponentially better than those so unimaginative as to work in government just adds to your reviewer’s frustration that achievers like Ovitz are expected to hand so much over.
All of the above naturally leads to a question. As Ovitz is wrapping up Who, he updates readers on the doings of his three kids. He jokes about Eric Ovitz that “Somehow he came out Republican, despite my best efforts.” The quote had me wondering. Readers of this column are well aware of how critical it often times is of Republicans, but always because they depart from their small-government, low tax, non-interventionist rhetoric. Applied to Ovitz, I found myself wishing this most self-made of men would explain what about the Democrats rated and rates his good opinion. I say this as a registered Independent who thinks Republicans have mostly lost their way, and who thinks Donald Trump at times an insult to the GOP’s Reagan legacy. It’s a long way of saying that warts-and-all, Ovitz should be a Republican. While it’s a known quantity that Hollywood is near-monolithically Democrat, it says here that the Dems don’t deserve Ovitz?
To all this Ovitz might respond that government has a role when it comes to helping the have nots, but one wonders how well he could support such a belief. In a very strong sense his brilliant career rejects the view of government as fixer. To understand why, consider how he describes in the book’s prologue how very dedicated he was to his clients at CAA:
“Our tenuous capital was the hours in the day, less the few we slept, and we spent that capital at a frenzied pace. I’d drop everything to get you the right cardiac surgeon, the right car, a place for your kid at John Thomas Dye or Harvard-Westlake schools – whatever you needed. I was everyone’s chief psychiatrist, legal adviser, financial adviser, fixer, cultural translator, and shoulder to cry on. With so many clients’ very lives seemingly our responsibility, I obsessed about what might go wrong for them – and for the agency.”
Readers might stop and think about the above, and then ask themselves if they’ve ever experienced anything close to that kind of service in their dealings with government at any level. Goodness, even getting a passport or something as basic as stamps can be a lengthy ordeal. As for the idea that Ovitz was serving the elite of the elite, readers need only ask whether America’s non-elite get better care from the DMV and FEMA, or from Walmart and Waffle House.
In a sense it’s a relief that Ovitz didn’t get all political in a book about his career, but his comment about son Eric’s switch to the Republican Party stuck with this reader. Bad as the Republicans have become in modern times (in my estimation George W. Bush is the worst president of my lifetime, and no one else comes close), Ovitz’s life and career is a loud rejection of the Democratic Party’s rhetorical assertions about the U.S. no longer being the land of opportunity, that the rich need to pay “their fair share,” and that government is necessary to aid the have-nots. I’ll take Ovitz allocating his millions over the feds any day of the week, and history supports my assertion.
Happily, Ovitz’s business experiences don’t just reject certain Democratic talking points. They also call into question a view that’s increasingly popular on both sides about long-term wage stagnation in the United States. What a laugh. If what’s accepted as real were true, then it would also be true that the world’s tired and hungry wouldn’t be regularly risking their lives to get to the United States. On their own, the actions of immigrants loudly mock the idea that the American worker is stuck in place. So does the story of CAA.
Ovitz writes that at CAA they paid their agents “well-above-market rates” to “ensure they didn’t leave.” Crucial here is that they similarly paid people around town well-above-market rates. Restaurant maître d’s could expect major tips at year end from CAA because the agency wanted to be sure that those who aided their agenting of clients similarly “didn’t leave” them.
Ovitz is a UCLA grad, and he worked hard to raise money for the school and its prestigious hospital more specifically “because it proved extremely useful for CAA to be able to get our clients or potential clients the best medical care with one call.” For its clients CAA maintained a “famous gifts office” on “the uncontroversial theory that people love free stuff.” Free stuff included Ovitz signing over the title of a Ferrari he owned to Sylvester Stallone. As Ovitz puts it, “If someone needed a personal trainer or a dog groomer or an impossible dinner reservation, our assistants were on the phone until it got done. Multiply that process by a thousand, and you get a reputation for taking care of everything.”
All of this rates mention in terms of wages for what it says about how business is done in the United States. So that CAA could overpay its agents, the same CAA overpaid its clients. Important here is that while CAA was the McKinsey of Hollywood, the U.S. is pregnant with businesses that are the best in the world at what they do. Implicit in the wage stagnation theory that’s taken hold is that the nation which houses the biggest, most valuable, and most service-oriented companies in the world is populated by companies that routinely underpay the very individuals who make those companies great. The very notion is absurd. CAA is but the latest example of a business that became great by overpaying its employees. And Michael Ovitz surely wasn’t alone in understanding that the most expensive employees are the ones who feel they’re undervalued by virtue of being underpaid. Stated simply, the wage stagnation narrative is exposed as ludicrous by the brilliance of U.S. businesses.
Regarding modern fear of China, Trump-loving Republicans and Bernie Sanders-loving Democrats would be wise to read Ovitz’s memoir. While he’s still an investment force today, Ovitz days as a Hollywood giant were in the two decades that ended the 20th century. This is important simply because Ovitz gradually evolved from being an agent to an advertising guru, corporation whisperer, and global M&A specialist with specific expertise in Japan. This is worth discussing because the global businessman in Ovitz understands from history that the wasted hysteria over China in the present is a repeat of what he heard in the ‘80s and ‘90s about Japan. Same fears, different country.
As the Trump administration shamefully talks of policing Chinese investment in U.S. businesses, back in the ‘80s and ‘90s those same wrongheaded fears were expressed about Japanese investment stateside. But as Ovitz puts it about the Japanese, “They weren’t pillaging – they were financing.” Absolutely! Seemingly forgotten by the emotional puddles who populate the political class is that liquidity and the need for liquidity is a nightly worry for all but the bluest of blue-chip of businesses. Applied to American businesses, a dollar is a dollar is a dollar. When protectionists strive to keep dollars out of American hands with “national security” in mind, they don’t just compromise American safety thanks to a lack of investment rendering future invasion of the shooting kind quite a bit less expensive. Figure that Chinese investment means much more than crucial liquidity: it means know-how, and it means crucial knowledge about how U.S. businesses can crack what is and will be a massive market for them. With China, it’s once again same fears, different country. If Ovitz is a Democrat in response to the GOP’s modern embrace of protectionism, maybe I’m with him….
And then there’s the question of intellectual property. Here it would be so interesting to ask Ovitz endless questions about his comment that “A movie idea” has “no intrinsic worth.” The author continues with a crucial point: “Give the same concept to ten different directors and you’ll get ten different films.” Brilliant. And I say a refutation of all the handwringing about Chinese “theft” of “American” intellectual property. Really? What would they steal? They could rummage for days through Steven Spielberg’s files, they could plant countless spies on one of his movie sets, but they could never come anywhere close to making a Steven Spielberg Film. And since they could never emulate Spielberg, why are Americans so fearful of them mimicking Jeff Bezos and Apple’s Jonny Ive? When we make a lot of noise about so-called Chinese IP theft, we thoroughly insult those “stolen” from. Ovitz notes how his M&A client Matsushita from the CAA days “was nicknamed maneshita, or ‘copycat’,” and that’s a useful point about China: its businesses are in the mimic phase right now, but eventually they’ll be in the innovation phase. When they are Americans will benefit in astounding fashion much as the rest of the world has benefited from American innovators like Amazon, Apple and Microsoft.
It’s also worth mentioning that for others, Ovitz’s remarkable book will serve as a guide to doing businesses; perhaps a modern Art of War. Ovitz is ultimately a student of the human condition, and his innate understanding of people made him a great agent, advertiser, M&A specialist, and now investor. He gets things. He sees things. Ovitz plays to the desire of people to better themselves, and always let potential clients know that he would make their "dream project happen,” or he would ask “So what are your dreams?” Goldman Sachs has long taught “underpromise, overdeliver” but with Ovitz it’s overpromise and still overdeliver. As for “power,” it’s “only power until you exert it.” Perception is what matters. Ovitz always taught his employees to reach for the power club “every day, but to never – almost never – pick it up.” Ovitz was the club.
For those in sales, arguably the most crucial lesson within Who is for individuals to “Never count on anything.” When he and his partners left William Morris to start CAA, they left with what they assumed were a few “sure thing” clients who would sign with them right away. Except that they didn’t. Interesting about people who didn’t show up for work at CAA is that the always working Ovitz would call them “out of concern,” but more interesting from a management perspective is that “I also wanted them to know I was keeping a watchful eye.”
An odd thing about Who is that it seemingly had errors. This is surprising in consideration of just how detail-oriented Ovitz was and is. In that case it was puzzling in the pictures section of the book to see Jay Moloney’s (Ovitz’s talented CAA protégé who sadly crashed and burned) name spelled Jay Maloney. Son Eric’s wife is named Kendall, but in the picture of them at their wedding Kendall is spelled once with two ls, and once with one. When daughter Kimberly Ovitz was asked a CAA-related question by a security guard at her NYU dorm, the years were off when it’s remembered that Kimberly was born in 1983, but Ovitz left CAA in 1995. When Ari Emanuel left CAA for InterTalent, Ovitz recalls that Ron Meyer “fired Tom Strickland because Tom had known about the impending defection and hadn’t told us, and because he assumed Tom was going to InterTalent anyway (which he then did.)" Isn’t the name Tom Strickler?
As for quibbles, it’s a guess that the editor asked Ovitz to insert some last minute stuff about sexual harassment in Hollywood that read as though it was inserted. And then in certain introspective parts of the book, Ovitz references how in retrospect he wishes he’d been an architect, or done charitable work of the Red Cross variety. This didn’t read as real. Someone as ambitious as Ovitz would have always felt stifled in the world of non-profit. Without knowing him, it’s a safe bet that Ovitz had to be great and that he had to be high-profile in a high-profile industry by virtue of being low profile. Having grown up in the Valley, Ovitz had something to prove and wanted his success to be known. His inaccessibility and his mystery would be his high profile. Ovitz got it better than most about how to be famous via mystery. He needn’t be sheepish about what he achieved, but there’s a sense in Who that he’s apologizing for something. He needn’t. While great people sometimes step on toes and often have enemies, they make the world go ‘round.
Looking ahead, my hope is that Ovitz tours with the book and that he makes himself available for interviews. Engrossing and great as Who is, I wanted so much more. The questions for the author are endless, including whether there can ever be someone like him in Hollywood again. Ovitz seems to indicate no not out of ego, but because there are so many small screens showing so many different shows to so many more segmented audiences. The internet has robbed Hollywood of its essential mystery, and as a result it’s not just the screens that are shrinking. Power has been redistributed by technology? Or so it seems. Again, so many questions. For now, I’ll just simply say that Who Is Michael Ovitz? is the best business book of the year for it teaching readers about so much more than business.
