October 5, 2018 / 3:19 PM / 2 months ago

Breakingviews - Review: Michael Ovitz’s Hollywood adventure

NEW YORK (Reuters Breakingviews) - Posing a question for a book title is risky because the reader may not care to know the answer. But high-stakes gambling is in the DNA of the man behind “Who is Michael Ovitz?” Ovitz has been Hollywood super-agent, dealmaker, art collector and short-lived heir apparent to the corner office at Walt Disney. The last of these is one reason to tough out more than 350 pages. His time at the Mouse House serves as a cautionary tale of succession planning gone haywire. More than 20 years later, Disney will soon be seeking another new chief executive.

Michael Ovitz, chief operating officer of venture capital fund Broad Beach Ventures, waves as he arrives at the annual Allen and Co. conference in Sun Valley, Idaho July 9, 2013. REUTERS/Rick Wilking

Ovitz defined the stereotype of a brash Hollywood macher from the 1970s through the 1990s. He parlayed a coveted job in the mailroom of talent agency William Morris into bigger jobs, eventually breaking off to start a rival firm, Creative Artists Agency, better known simply as CAA. It was the powerhouse behind some of Tinseltown’s biggest movies including “Jurassic Park,” “Ghostbusters” and “Rain Man.”

The book is full of sweeping statements and copious name dropping. Tom Cruise. Steven Spielberg. Dustin Hoffman. There’s a whole chapter devoted to Paul “P.L.” Newman.  Ovitz was skilled at playing the role of his life. “I was a chameleon, becoming whomever I needed to be to make everyone comfortable and close the deal. My basic character was buttoned-up, omniscient, wise, loyal, indomitable ... A Terminator.”

Modesty and self-reflection are in short supply. At least Ovitz says he realized immediately it was a mistake to tell his client Barbara Streisand that she was too old and irrelevant to young men to push for equal compensation. She was 52 at the time. The anecdote presents a chance to discuss the subject of sexism in Hollywood – the casting couch is a notorious trope - but Ovitz gives it only a few paragraphs. Instead, the incident marks the beginning of the end of his time with CAA and the start of his ambition to be on the buyside: the person taking the calls, not returning them.

So he sets off to become a media executive. Crossing over wasn’t so easy. Here, too, it might have been instructive for Ovitz to expand on the experience. His friend, Disney Chief Executive Michael Eisner, was courting Ovitz to come aboard, promising him co-CEO duties and power. After turning down a top job at Universal, snapped up by his partner Ron Meyer, Disney’s overture looked like an enticing second chance.

Yet before Ovitz ever set foot in the Magic Kingdom, the relationship was fraught. For starters, Eisner wasn’t straight with Ovitz about his title and reporting line. Before the ink dried on the contract in 1995, he told his wife: “No matter what I do, I’m going to fail at this job. I think I just made the biggest mistake of my career.”

Indeed, Ovitz was thwarted at every turn. Attempts to bring in talent, negotiate a messy exit for former studio head Jeffrey Katzenberg and buy a stake in Yahoo from Masayoshi Son’s SoftBank were all shot down. Ovitz admits he made plenty of mistakes – “I came in like a whirlwind” – but the partnership was widely considered a disaster. Ovitz was fired a little over a year later and successfully sued the company to collect his $130 million compensation package.

The next several years at Disney ushered in a downward spiral. Eisner resisted identifying a successor. The company’s stock cratered, and Comcast’s Brian Roberts made a hostile takeover attempt. The effort ultimately failed, but Disney’s investors realized that Eisner needed to move on.

Luckily for the Mouse House, a promising leader named Bob Iger, acquired in the 1995 merger with Capital Cities/ABC, had what it took. He landed the top job in 2005, and Disney has flourished. The share price has quadrupled since he took over, making the company worth over $170 billion. Ovitz’s part in Iger’s success was brief, but he did help set the scene. Eisner dispatched him during his first week on the job to fire a suspicious Iger, but Ovitz instead talked the ABC executive into staying.

Now, though, Disney is once again at a crossroads. The company is spending an astonishing $71 billion, its largest deal yet, to acquire Twenty-First Century Fox’s entertainment and international assets. The integration will be one of the biggest challenges of Iger’s career, as he also belatedly battles Netflix and Amazon. Iger has postponed his retirement several times, and there’s no apparent successor. To help avoid a repeat Hollywood ending, maybe at least excerpts from “Who is Michael Ovitz?” should be on the Disney boss’s reading list.

Breakingviews

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