Agency animus

Tenpercenteries re-ignite H'wood turf wars

HOLLYWOOD — The Creative Artists Agency will host its annual MTV Movie Awards party after Saturday’s kudocast. But the fete has a bitter back story this year due to a change of address for the party’s former organizer, Patrick Whitesell.

Once a top agent at CAA, he left in February to become the 10th partner at archrival Endeavor, which is throwing a competing Saturday soiree. Agents from rival tenpercenteries are understood to be invited to the Endeavor bash, whereas CAA will exclude them.

The party maneuvers are the latest sign that the talent agency wars are back on after a three-year lull, and the tremors are being felt all over town.

Even last Christmas, the agency animus surfaced when a top-tier film director repped by CAA received a gift that still makes him chuckle. It was an answering machine, wrapped up with a bow, along with a note from the partners at Endeavor.

“This is what your agents are doing for you right now,” the note read. Rather than simply answering phones, the gift implied, good agents must actively guide career trajectories, build brands and steer clients to the right script. After the director’s smile faded, he grasped the larger meaning of the overture:

“I started to think that these Endeavor guys are what CAA used to be — young and hungry,” the director said. “I thought, what am I getting in exchange for 10% of my income? You have to ask them to get you involved with TV, like it’s some sort of privilege if they agree to help you.”

Change in philosophy

A change in philosophy is to blame for client disgruntlement, argued one prominent agent.

“There’s a gunslinger mentality in town,” said the veteran tenpercenter. “You don’t read scripts, you don’t give career advice; what you do is go out there and sign new clients and put another notch in your belt.”

Although CAA acknowledges the fiercer climate in which agencies now operate, it has chosen a strategy different from Endeavor’s: CAA seeks to focus on signing clients rather than hiring away top agents in order to gain clients.

Personality clash

In fact, the personalities of CAA and Endeavor contrast sharply in many respects.

Endeavor’s agents are known for their no-nonsense competitiveness and abrupt manners. When they answer phone calls, there are usually no “How are yous?”

CAA, on the other hand, maintains an above-the-fray attitude. Its agents tend to project a certain cool. Endeavor’s agents are fighting their way to the top; CAA’s are enjoying life at the top.

The basic precepts about client representation are at stake in this acrimonious fracas — and its scope reaches well beyond the Endeavor-CAA scrum. Other newly emboldened firms are actively poaching clients and agents alike.

William Morris has 14 former ICMers in its employ. UTA boasts an enviable stable of directors and has gained notice for some quietly aggressive moves.

“The Endeavor-CAA battles underscore the fact that we now have a level playing field,” observed one senior agent at a rival firm.

“Endeavor’s push has exposed some weaknesses in the CAA armor which we all will exploit.”

Patrick Whitesell’s departure from CAA in February to become the 10th partner at Endeavor fanned the flames of rivalry, as did the accompanying defections of Whitesell clients Ben Affleck, Drew Barrymore and Matt Damon. What enticed them is the same carrot Endeavor dangled in front of many top agents and clients perceived to be dissatisfied with CAA: an alternative to that agency’s greatest strength and most prominent liability — its sheer size.

Size matters

The size difference is a significant factor, according to the A-list director courted with the answering machine.

“There’s a pecking order, and Spielberg always gets first crack, you know, which is fine,” he lamented. “I don’t have any illusions about my place in the food chain. The question is, how long is that food chain? CAA is a big place. Endeavor is all run by these little Michael Ovitzes.”

The approach is working, at least so far: Almost overnight, Endeavor vaulted from an emerging talent agency in the movie biz with a few A-list actors like Adam Sandler, Mark Wahlberg and Edward Norton to a genuine player in the feature casting business — one that can make pictures go.

But how long the afterglow will last also is a matter of speculation: Whitesell has not gone on the signing spree that was initially feared after his defection. And clients like Jennifer Aniston and Kate Hudson remain lodged at CAA.

Meanwhile, top agents elsewhere look on worriedly and complain about a “frat house mentality” that is driving the conflict.

Of Endeavor partner Ari Emmanuel, one producer said: “He is going after (CAA partner) Kevin Huvane, pure and simple. He hates him, and he’s going to try to dismantle him. With glee.”

Reasons for any animus that may exist between the two men are not clear. Neither would comment for this story.

What is clear is that Whitesell’s departure augurs a destabilization of the agency business overall: Long the preeminent talent shop, CAA discovered a mighty dent had been whacked into its armor.

Not since the departure of William Morris’ Ed Limato to ICM more than a decade ago has one agent’s arrival meant so much for a talent shop. Worse, the defection comes at a time when the recent slugfest between William Morris and ICM has blurred the hierarchy.

Things have gotten so uncivil that, according to one oft-repeated tale, an Endeavor partner has started taunting CAA topper Lovett with emails to the effect of, “I’m taking another one of your clients. Can you guess which one?”

“The games are just about to begin between these guys,” said one top manager at a firm that has clients at both CAA and Endeavor. “It’s worse for CAA, because the perception is, ‘If (Whitesell) left, the one who was thought to have the keys to the shop, then who’s next?’ ”

The answer to that question has everything to do with how quickly CAA can act to prevent additional defections, both in staff and in clients, to Endeavor.

Stock incentive

Insiders with knowledge of CAA’s plans said that an equity ownership plan for senior employees, which has been in the works for some time, has now hurriedly been punched up in an effort to lock in the best and brightest CAA agents. Those participating would get a stake in the company, but would have to sign multiyear noncompete agreements.

Meanwhile, since CAA’s bruising experience with Endeavor, it has gotten religion about the “team” approach to client representation. CAA is now looking to replicate the Ovitz and Meyer days when a gaggle of agents served each client. While the teams for key stars had been in place on paper at CAA, they were often largely paper tigers, with the reality being that a single agent was often representing an A-lister.

Now managers say CAA deal memos are copied to as many as five agents, and often also to a partner on bigger clients — a very recent change in tactics.

“CAA used to be the big, fat kid on one side of the see-saw,” observed one manager. “Now, that kid has lost a lot of weight.”

CAA partners’ desires to nail down contracts where handshakes used to suffice is not solely for morale building or protection from poaching at the hands of Endeavor.

It may be a precursor to the moment — which is inevitable, many veterans asserted — when agencies align themselves with Madison Avenue. Ad firms and agencies have already held merger discussions, and in such a unified universe, retaining clients will become even more critical.

Certainly, the poaching of clients has been as much a staple of Hollywood life as the smog in Griffith Park or long lines for hot dogs at Pink’s, but the way they are poached has changed.

As William Morris and Endeavor have amply proven in the last 12 months, paying “retail” for agents can be expensive but does produce immediate results: immense pain for one’s rivals.

Whitesell’s departure is emblematic of the costly new method many agencies in transition will employ to achieve growth: buying in bulk but paying retail prices in the form of tripled agent salaries.

The real competition

This is troubling to many, not just because imbroglios between agencies can get bloody, but because, as one high-minded agent put it, “the real competition is not with other agents.”

His point is that increasingly vertically integrated conglomerates that own movie companies, TV networks and Internet divisions are making it harder than ever to get clients a good price or even a job. In short, this internecine clash is happening at a time when there are fewer opportunities for a broader base of clients.

There’s a lesson in that for all agencies, besieged or besieging.