Michael Ovitz said he turned to investigator Anthony Pellicano in an effort to avoid another ambush.
Six years after unloading talent management, TV and film production entity Artists Management Group onto the Firm, the former Hollywood heavyweight found himself explaining to jurors Wednesday why he hired Pellicano to dig up info on individuals who could have hurt the sale.
Ovitz was specifically frustrated by a series of negative articles about the company, penned by Anita Busch and Bernard Weinraub that appeared in the New York Times in 2002 and detailed the company’s financial troubles and talent defections. One story described Ovitz as “having lost his powerful perch in Hollywood.”
The articles were “wildly embarrassing to myself and my family,” Ovitz testified during his hour on the witness stand, wearing a lilac-colored tie and sporting his signature navy blue suit. It was a rare moment in which he appeared uncomfortable in public.
Ovitz said the articles were “fueled by rumor and innuendo,” and he wanted desperately to find out where the reporters were obtaining their info. On top of that, AMG was facing a series of lawsuits that had to be dealt with before the company could be sold.
They included a sports commission issue involving AMG’s sports arm and a trademark infringement case with Advantage Marketing Group.
AMG repped talent, as well as produced film and TV shows through Artists Production Group and Artists Television Group.
The move to sell the company came after a series of “financial blows,” Ovitz said. Those included a deal with AT&T to finance part of ATG that fell through in 2001 and StudioCanal’s decision to bail from a joint venture with APG.
The entire company ultimately sold to the Firm in 2002, but Ovitz had also been fielding an offer from Paradigm as well.
Ovitz said he feared that bidders would get cold feet because of the seven articles on AMG’s travails that appeared in the New York Times.
“All I wanted was a graceful exit from the business,” Ovitz said.
Ovitz’s lawyers advised him to hire Pellicano to clear up the lawsuits. The lawyers paid Pellicano directly, with the private eye’s bills passed on to Ovitz as part of his legal fees.
Yet Ovitz personally turned to Pellicano as well in 2002.
In a recorded phone conversation between the two that year, Ovitz can be heard saying, “I have a situation I need advice on that would be beneficial to you and probably to me.”
“I assumed (Pellicano) had information that would be helpful to me at the time to get me past the finish line of these deals,” he said on the stand. “I wanted information from Pellicano so I could protect my business and the people who were working for me.”
Ovitz said he wanted to find out who was sourcing Busch and Weinraub’s articles, not necessarily info about the journalists themselves.
He turned to Pellicano because Ovitz considered Pellicano to be part of “the campus,” his term for the entertainment business. “It’s very much like high school,” he said.
Pellicano “was working with people I had problems with,” Ovitz added, citing Ron Meyer and David Geffen as examples. “There were a lot of people sourcing those articles I had problems with.”
In addition to obtaining potentially “embarrassing” information, Ovitz also “wanted to know when I would be ambushed and when the next shoe would drop,” he said.
The resulting information “was incredibly helpful to me,” Ovitz said. He declined to disclose exactly what that info was, although he said he was able to settle a potential lawsuit from a former employee who had confidential information about AMG — and that suit could have been detrimental to the sale of the company.
Pellicano didn’t end up finding any embarrassing information on Busch or Weinraub, Ovitz said. Pellicano was “rather dismissive” of Busch, he added.
In addition to the $25,000 in fees to hire Pellicano on the three separate cases, Ovitz said he paid Pellicano $75,000 in cash through the end of 2002. Whenever he contacted Pellicano at his office, he was ordered to use the code name “gaspar.” No reason was given for why that name was chosen.
In an interesting yet expected move, Pellicano declined to cross-examine Ovitz. The private eye has previously said he would not confront former clients unless forced to.
Ovitz denied having ordered Pellicano to threaten Busch or wiretap her phones. Busch has filed a civil suit against Ovitz claiming that he was involved with those actions by Pellicano.
And Ovitz denied any knowledge of Pellicano’s illegal acts of wiretapping or hiring police officers or telephone company employees to search databases.
“I assumed whatever he did, he did it legally,” Ovitz said.
Ovitz also had kind words for the P.I.
“He was always direct with me and gave me good advice,” Ovitz said. “When a lot of people were abandoning the ship, he didn’t. I was under the most pressure I’d ever been in in my life. He lended an ear.”