Small agencies shed illusions -- and clients

HOLLYWOOD – Last November, Sandy Bresler made a difficult decision. For years, his agency was the model all smaller agencies envied: His shop, anchored by loyal A-list player Jack Nicholson, allowed him to cultivate careers for a good-sized list of promising young clients.

But representing new talent is speculative and expensive. Last fall, Bresler decided it would make more business sense to concentrate on the handful of clients who made the bulk of the money. The move makes for an interesting study, because it’s an issue with which every smaller agency in town has been privately wrestling: Just what should the smaller talent agency of the 21st century look like?

As agents are addled by strike-phobia, climbing costs, the rise of managers and crumbling relations between SAG and the Assn. of Talent Agents, one thing seems certain: Few of Hollywood’s smaller agencies will function the same way next year as they do this year.

Bresler, a bearded, thoughtful man with a quiet intensity, has added a new twist to the bon mot that you can’t be too rich or too thin. Bresler-Kelly & Associates is ostensibly richer because it’s thinner — 35 clients and two agents thinner, to be exact.

“I’m very concerned about the future of the agency business,” says Bresler. “We’ve never had to worry about us — only the people we represented. Now, we’ve got to look out for ourselves, too. I’m very concerned about where agents will be in a year.”

For that matter, one could add an entire genre of working actors to that list, who are increasingly being squeezed out of representation.

“There’s a big problem here,” says Johnnie Planco, a 28-year veteran of the William Morris Agency who became a manager just over a year ago. “It’s very hard, much harder now, for working actors. Agencies are all focusing on the immediate upside to a client. That lower-middle to middle area is becoming very hard to find good representation. It saddens me. Somebody used to believe in these people, and at the same time represented Kevin Kline or Robert Redford.”

Of course, Hollywood’s big agencies face similarly skyrocketing overhead costs. But they have been able to rely on the windfall from TV talent and literary packaging fees, as they spread their risk across a wider array of fields — personal appearance, commercials, theater, young talent, music, books and so on — two benefits not available to most small and mid-size shops.

Part of some agencies’ cash woes, of course, are due to many tenpercenters’ great love of the high life, and an occasional propensity to reinvest in their businesses only after they’ve bought their third vacation home. But many more weathered the costly commercials strike with generosity and at great personal expense, as did Innovative Artists’ owner Scott Harris, who ate losses to protect his staff from wholesale layoffs.

“This is a troubled time,” says Harris. “It isn’t that I desire to become a management company, but agencies have to prosper and grow in order to represent SAG talent.”

Adds Agency for the Performing Arts prexy Jim Gosnell, “I don’t think franchised agencies can exist the way they are now. Is there some (type of) company between management firm and agency? I don’t know. But we’re going to have to go in that direction. We cannot run our business the way we have — or we’re out of business.”

Gosnell says that for now, the main protection against spiraling costs is TV packaging — long an annuity that keeps many an agencies’ bills paid and the complimentary Snapple chilled.

For smaller shops, getting into those profitable TV packages had always been a challenge.

Harry Gold and his partners in boutique agency Gold/Marshak/Liedtke are in the midst of forming a strategic alliance that could change that.

Seeking additional clout, the threesome are brokering an arrangement with the powerful Creative Artists Agency that will allow them to funnel their shop’s talent (which includes actors like Casper Van Dien, Pam Grier and Rod Steiger) into CAA’s television packages.

Implicit in this deal is that CAA will not poach Gold/Marshak clients; CAA will commission the package, and Gold/Marshak commissions its clients. In short, the two are operating like the smaller pilot fish and the Great White, with Gold/Marshak moving into a position to cast both a bigger shadow and reap the lucrative benefits of TV packaging previously only enjoyed by larger shops.

“They’re a packaging powerhouse,” Gold says simply. “And that allows us to be protected in the package process.”

Of course, predictions concerning Hollywood’s smaller talent shops vary depends on which topper you speak with. Others, unlike Bresler, are broadening their personnel and clients to find new revenue streams in the youth representation biz, or in reality programming, as is Metropolitan.

But given that the agency business has remained governed by largely the same set of rules for 60 years — the Screen Actors Guild’s franchise agreement — there is great resistance to what agents call the Big Kahunas of amendments: Commissioning residuals from movies that come from supplementary markets, and taking of outside investments.

The animosity between SAG and agents over this is palpable, for with a strike looming and fixed costs rising, all shops are nervously looking harder than ever at the bottom line — and resenting what they say are SAG’s outdated regulations.

“They don’t own the word agent,” says one tenpercenter bitterly.

Can unfranchised agents be too far off? To quote a line from the film “Meatballs”: “The rules are, there are no rules.”

SAG feels that may be coming to the world of representation. The driving force behind all this change is a feeling that a deal-making free-for-all is imminent.

The franchise agreement between SAG and the agents, which governed how all talent shops do business, expired last October. Theoretically, a gentleman’s agreement to do business under the old guidelines for 15 months was reached, and still exists.

Thus far, SAG — dealing with looming potential strikes against studios and TV contracts — has not yet returned to the bargaining table with ATA.

Prosperity (and the ability to represent the maximum amount of SAG talent) is becoming more difficult without new investments and commission structures, reps say. They want the ability to commission new revenue streams, which is one thing that drove agents like Sid Craig into management — and Craig says it makes it all the harder for SAG’s working class to get representation.

Craig was a ATA board member for 18 years and a veepee for six; he became a manager three years ago, trimmed his client list from 45 to nine and became the Jeane Kirkpatrick of the agency world.

“It is a bit of ‘if you can’t beat them,’ ” admits Craig, who for years was an outspoken critic of managers. “And yes, you can commission more, but more to the point you can be involved in all aspects of a client’s career.”

Agent Craig put client Pat Carroll as the voice of villain Ursula “The Little Mermaid” at $1,000 a day. That’s all he got the commission on; he was shut out of the actress’s $350,000 from supplementary markets on the pic. For Craig, that was the beginning of the end.

Equally dear to agents would be the ability to sell off financial stakes in their companies to ad agencies or Internet providers, who, in turn, hope to benefit from their talent rosters.

SAG had agreed to these demands last year, then reneged and scuttled the deal. The union has since steadfastly opposed both initiatives, claiming the outside investments would be a conflict of interest.

For months after talks stalled between the union and the percenters, agency toppers privately said they thought SAG would come around, especially after the commercial strike had been settled.

Instead, things have grown more acrimonious, with nasty letters between the two organizations, in which SAG began urging members not to sign general service contracts with agencies that departed from the franchise agreement.

“Some agencies have decided to reduce their clients,” says Christopher Barrett, prez of the Metropolitan Talent Agency. “But one man’s contraction is another’s expansion.”

Barrett has plans to launch both a kids representation arm and a reality TV unit in an effort to diversify and spread risk.

“We aren’t — not any of us — just an agency,” maintains Barrett. “We’re a Kinko’s, an accounting firm, a delivery service and an agency. That isn’t cheap. SAG then espouses that they can’t trust us — as if it’s 1945 and we’re all smoking huge cigars and have casting couches. So while the marketplace is an acceptable form of governance for attorneys, managers and PR people, it’s not for agents? It’s ridiculous.”

It remains to be seen whether agents will defect en masse for the pleasures of producing and commissioning as unregulated managers. But Planco points out that those shops making the switch for expediency’s sake do so at the expense of the working actor client, who will no doubt be trimmed from the rosters. But for those who make the cut, the result might equally fretful.

“I’d been moving to ward this management thing for years,” says Planco. “But if you’re doing it just to produce or collect other (additional) fees, then you’re either going to be a manager that’s a frustrated agent, or an agent that’s a frustrated manager.”

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