TIME: Almanac 1993/TIME Almanac 1993.iso/time/121090/1210201.000

Text File | 1992-08-28 | 3.7 KB | 83 lines

                                                                                BUSINESS, Page 70

"An Economic Samurai"



    Even before his latest coup, he was regarded as the most
powerful man in Hollywood. Michael Ovitz, the town's No. 1
talent agent, can make or break a movie project or an actor's
career. But as the power broker behind Matsushita's acquisition
of MCA, Ovitz has reached an international stature that even
legendary moguls might envy. "He is the mega-dealmaker," says
an industry executive. "Not only on a film-by-film basis, but
on the very largest scale of buying and selling studios. That
is the most significant thing you can do in Hollywood."

    Ovitz, 43, has pursued power with the fierce concentration
of a student of aikido, the Japanese martial art that he
practices each dawn. "He's an economic samurai," says a
colleague. Starting in 1975, when he and four young colleagues
left the William Morris Agency to form their own firm, Ovitz
has managed to assemble the hottest stable in town. Creative
Artists Agency has a roster of 675 clients ranging from
superstars Tom Cruise, Sylvester Stallone and Madonna to
directors Oliver Stone and Martin Scorsese.

    Ovitz prospered by matching such talent with CAA
screenwriters and peddling the stars and stories to studios.
But assembling the elements for such hits as Ghostbusters and
Rain Man only whetted Ovitz's appetite for even greater power
packages. His first real taste of corporate matchmaking came
last year when Sony, impressed by his unrivaled Hollywood
contacts, tapped him as a consultant for its $3.4 billion
acquisition of Columbia Pictures.

    Not long after the Columbia deal, Matsushita sought out
Ovitz to lead the company's search for a major acquisition. The
Japanese company first sent a group of top executives to meet
with Ovitz in Hawaii, where they talked about everything from
world politics to prospective merger partners. A team of CAA
experts then prepared a list three possible targets. The
Japanese company rejected one studio, Orion, as too small.
Another candidate, Paramount, was dismissed besome of its
holdings, ranging from publishing (Simon & Schuster) to sports

Ovitz recommended MCA, which had the mix of show-biz operations
that Matsushita wanted.

    Ovitz orchestrated the merger with cool precision. To avoid
the bickering that marred the Columbia deal, he handpicked the
law firm, investment bankers and public-relations agents to
represent Matsushita. He then served as a shuttle diplomat
between the two companies, anticipating problems before they
could grow. When the merger was clinched, Ovitz joined the army
of 100 dealmakers at Matsushita's law firm in Manhattan for a
9:15 a.m. champagne toast. For Ovitz's work on the merger,
Matsushita could eventually pay CAA as much as $40 million. The
sum aroused the green-eyed envy of deal-starved Wall Street
firms, which suffered the indignity of watching a talent agent
walk away with one of the biggest deals of the year.

    Ovitz predicts that the Japanese style of long-term planning
will help bring stability to Hollywood. "That's very important
to creative people," he says. By the same token, he feels that
Americans will grow more comfortable with such global
alliances. "It's crystal clear that we are no longer an
isolationist country."

    What's next for Hollywood's hottest leading man? After the
Matsushita deal, Ovitz may be in line to succeed Lew Wasserman
as head of MCA. Yet such a move could limit his power, which
now encompasses the entire movie business. And he is not yet
finished changing the face of Hollywood.


By John Greenwald. Reported by Jeanne McDowell and Edwin M.
Reingold/Los Angeles.