Creative Artists Agency

History

Creative Artists Agency was formed by a handful of agents at the William Morris Agency in 1975. At a dinner, Mike Rosenfeld, Michael Ovitz, Ron Meyer, William Haber, and Rowland Perkins decided to create their own agency. According to one report, the agents were fired by William Morris before they could obtain financing. Their firm was incorporated in Delaware and had a $35,000 line of credit and a $21,000 bank loan and rented a small Century City office. Within a week, they sold a game show called Rhyme and Reason, the Rich Little Show, and The Jackson 5ive. An early plan was to form a medium-sized full-service agency, share proceeds equally, and do without nameplates on doors or formal titles or individual client lists, with guidelines like "be a team player" and "return phone calls promptly."

The firm grew. Representing numerous A-list actors and having about $90 million in annual bookings in the late 1980s, Ovitz led the agency to expand into the film business. By the mid-1990s, CAA had 550 employees, about 1,400 of Hollywood's top talent, and $150 million in revenue. In the 1990s, CAA was owned mostly by several key agents, including Michael Ovitz, Bill Haber, and Ron Meyer. Haber was credited for the revival of top TV producer Aaron Spelling.

Ovitz excelled at "packaging talent for movies and TV projects" and negotiating large deals between Japanese conglomerates, such as Sony and Matsushita, with Hollywood studios, such as Columbia/TriStar and MCA. Ovitz expanded the agency into advertising and telecommunications. In 1992, the Coca-Cola company placed CAA in charge of much of its marketing campaign, to work alongside advertising agency McCann Erickson. In 1995, CAA was described as the industry's most powerful agency.

In the middle 1990s, however, there were major changes in management. In 1995, Ron Meyer was appointed as the head of MCA, and Ovitz left for Disney. The departure of Ovitz and Meyer brought an exodus of some of CAA's top-marquee names. Talent agent Jay Moloney was originally part of the transition but due to his drug addiction, he was fired and later committed suicide. In 1996, several CAA agents defected to rival agency William Morris Endeavor, taking with them prominent directors and actors. The partners founded the CAA Foundation in 1996 to create positive social change by encouraging volunteerism, partnerships, and donations. In 2012, it worked with Insight Labs for education reform, and contributed to its School Is Not School reform effort.

The agency continued to grow in the 21st century. In 2003, it opened a New York City office to manage theatre clients. From 2005 to 2015, CAA developed greater fiscal discipline, with more emphasis on profits, possibly as the result of the influence of private equity firms. During these years, CAA doubled in size, from 750 to 1,500 employees. In 2010, new technological developments such as the digital distribution of movies put strains on the industry. There was pressure to diversify into television, publishing, concerts, and find other ways to grow. In that year, private equity firm TPG Capital invested substantial sums in CAA; it invested $165 million with an additional $200 million in debt financing.

Agents

Agents are the core of the business, the behind-the-scenes players, putting together deals, while the public focus is on the moviemakers and actors and TV and film shows that they bring together. For some agents, CAA is a training ground to learn the business, and they leave after a few years sometimes to form their own talent agencies. CAA has employed top sports agents such as Tom Condon.

Talent agents, as an unwritten rule, prefer not to tout their own accomplishments, so as not to divert the spotlight from their clients. CAA president Richard Lovett is regarded as shunning media attention and keeping a low profile. Lovett took the job position at CAA in 1995, and he was described as a "skillful agent" with a "trademark ever-ready smile" adept at schmoozing and hobnobbing with colleagues and studio heads. Lovett was described in the Wall Street Journal as being "elegantly aggressive."

Top agencies frequently raid each other's staff, and when key people defect to rivals, it makes news headlines and often leads to legal battles over breach-of-contract claims. When agents defect, the rivalry can degenerate quickly into vicious battles played out in courtrooms and in the media. When several key CAA clients Will Ferrell and Chris Pratt defected to rival United Talent Agency (UTA) in 2015, and were later followed by ten agents, it erupted into a full-frontal legal battle between the warring agencies. In the lawsuit, CAA accused UTA of conducting a "lawless, midnight raid" as part of a "illegal and unethical conspiracy" with agents deliberately delaying meetings with clients to divert business to UTA. In a bitter lawsuit and countersuit between CAA and UTA in 2015, which began after a slew of CAA's agents departed for UTA, there were accusations of fraud, malicious untruths, lying, and a range of charges including a "breach of duty of loyalty" as well as "conspiracy to breach fiduciary duty."

Rivalry is not limited to rank-and-file agents, but can take the form of public barbs by company CEOs. Grudges can last for years; for example, movie producer Jay Weston sued CAA in 1979 about the rights to a film, and years later, it was revealed that Weston was "totally ostracized" by the agency. In effect, CAA would do the minimally required legal tasks of passing along required offers but otherwise staying uninvolved.

Top agents have had a reputation in the public's mind of living in a world of "fast cars, rooftop bars and foul-mouthed, phone-throwing power brokers," according to an account in the Los Angeles Times. CAA superagent Jay Moloney led a colorful yet self-destructive life. Moloney interned at CAA while studying at USC, became the right-hand man of Michael Ovitz, worked with clients such as Leonardo DiCaprio and made millions, dated actresses such as Jennifer Grey and Gina Gershon, and "battled personal demons" and became a "slave to cocaine"; Moloney committed suicide at age 35. In 2004 the HBO production entitled Entourage was made about a fictional Hollywood agent named Ari Gold. According to one report, the fictional Ari Gold character may have been based on a hybrid between an "even-keeled" Creative Artists Agency agent named Jeff Jacobs and an "abrasive 'go-for-the-jugular'" William Morris Endeavor agent named Ari Emmanuel. The report suggested that images like these may contribute to the public perception of agents as foul-mouthed and aggressive bullies. Perhaps because of its dominance in the industry, CAA agents have a reputation for being "coldhearted Hollywood power brokers," according to one report in the Wall Street Journal.

The talent agency business

The primary focus of the business is the deal: putting together content and talent in new ways to make new entertainment properties. In that sense, agencies serve as a "broker for information and opportunities." With many clients, agents charge a percentage fee based on monies that their clients make; one estimate was that CAA charges 10% of what its movie and television clients are paid. Most contracts made between writers and actors and directors with a talent agency last from one to three years. Contracts are an important part of the business.

CAA chiefs including Michael Ovitz, Ron Meyer and Bill Haber built the agency by packaging actors and directors with literary clients, but the scope of deal-making has widened in recent decades. For example, CAA crafted a deal between toy-maker Hasbro and DreamWorks and Paramount Pictures, along with numerous CAA writers and directors, to make the movie franchise Transformers. Sometimes deal-making entails creating new technology firms. CAA even manages deals with the estates of long-dead clients such as reggae musician Bob Marley, who died in 1981. CAA helped one former politician create an online career institute. CAA sold sponsorship rights for a baseball stadium in San Francisco.

While talent agencies can grow by making acquisitions, CAA has generally grown organically by bringing in new clients. The company divided its agents into two camps: traditional agents who manage the career tracks of 1,000 stars, and specialists in investment banking, consulting, advertising and digital media. The agency can use its more glamorous clients in film and TV to craft deals with steadier income streams; for example, using clients such as Julia Roberts, they can assemble marketing programs for less glamorous clients, such as Nationwide Insurance.

Like any business, talent agencies have to deal with contingencies such as recessions and strikes. For example, CAA's agents scrambled to deal with a strike by the Screen Actors Guild in 2008. When Hollywood agents change firms, and take stars and talent with them, it can have major financial repercussions for the departing agency, and can lead to much confusion as lawyers pour over the fine print of numerous contracts.

To market themselves, talent agencies often cater exclusive parties following awards ceremonies such as the Golden Globes. CAA has sometimes stepped beyond the bounds of propriety to harm its own public image. For example, in 2013, the agency threw a party at the Sundance Film Festival which caused embarrassment and a public relations backlash.

But the bash thrown by Hollywood's powerful Creative Artists Agency on Sunday night took festival revelry in an unexpectedly bawdy direction, as Sundance guests mingled with lingerie-clad women pretending to snort prop cocaine, erotic dancers outfitted with sex toys and an Alice in Wonderland look-alike performing a simulated sex act on a man in a rabbit costume.

CAA established CAA Marketing in 1998 to work with brands and clients for promotion purposes. CAA Marketing developed Chipotle's Back to the Start video. It created a marketing campaign for Coca-Cola.

CAA began an expansion into sports in 2006, under the leadership of CEO Richard Lovett. Athletes such as Sidney Crosby, Derek Jeter, Peyton Manning, David Beckham, and Cristiano Ronaldo and many agents from IMG have joined CAA. A report in USA Today suggested that CAA's development of its sports-related clientele was significant in 2007. A report in Nexus magazine in 2015 suggested that CAA was well-positioned to develop the E-Sports market. CAA puts together deals for sports stars such as writing their clients into fitness apps.

In 2010, TPG Capital gained a 35% interest in the agency and pledged $500 million for investments. The transaction enabled acquisitions in areas such as sports and overseas operations. It later sold a controlling stake to TPG Capital in October 2014. In 2015, TPG Capital was reported to own 53% of CAA. CAA is co-owner with an investment bank. Private equity firms have helped talent agencies make inroads into new and emerging businesses, with digital media firms such as Netflix, Amazon and Google. CAA has diversified into different businesses such as sports marketers and leagues and digital commerce. In 2014, CAA has been undergoing a transformation from relying solely on booking talent, into engineering multimedia deals worldwide.

Buildings

In the late 1980s, CAA commissioned architect I. M. Pei to design a new headquarters building at the corner of Santa Monica and Wilshire Boulevards in Beverly Hills. The 75,000-square-foot (7,000 m²), three-story building consists of two curved wings set around a central atrium with a skylight that rises into a conical glass tower. The 57-foot (17 m) high atrium was designed as an art-filled formal reception hall with a 100-seat screening room and gourmet kitchen and displays a 27-foot (8.2 m) by 18-foot (5.5 m) mural by Roy Lichtenstein. The design used feng shui principles. In 2007, CAA relocated to a new building in Century City, a district of Los Angeles. The new headquarters are sometimes referred to as "The Death Star" by entertainment professionals. CAA has offices in Los Angeles, New York City, Chicago, Nashville, London, Beijing, St. Louis, Stockholm, and Mumbai.

Competition

CAA was formed in 1975 from defections from the William Morris Agency, and there continue to be about four or five major talent agencies, although many reports suggest that CAA tends to be a dominant force in the industry.

In 2009, William Morris agency and Endeavor merged to form William Morris Endeavor (WME). In 2015, CAA and WME are the largest agencies in the business. In 2014 WME bought IMG Worldwide, a fashion and sports agency, for $2.4 billion. In 2014, WME had 4500 employees while CAA had 1500 employees. WME had a larger share of sports-related clients. The rivalry can get cantankerous: in one instance, the William Morris Endeavor agency placed dozens of ads around the city using Creative Artists Agency's red-and-white color signature with the headline being CAAN'T, a "playful nod to the CAA acronym." The agencies compete by "regularly poaching agents and clients from one another."

In Popular Culture

In Jay McInerney's short story The Business from How It Ended, the main character is a screenwriter represented by CAA. CAA's building is featured in the video game Midnight Club: Los Angeles.

Clients

CAA has a long list of A-list clients, including J. J. Abrams, George Clooney, Marion Cotillard, Tom Cruise, Michael Douglas, Tom Hanks, David Letterman, Brad Pitt, Martin Scorsese, Will Smith, Steven Spielberg, Sharon Stone, Meryl Streep, and numerous other stars and directors and filmmakers. Sports clients included Derek Jeter and David Beckham. Corporate clients included Coca-Cola and Mattel. In February 2017, former Vice President Joe Biden signed with the agency to represent Biden and his wife, Dr. Jill Biden, across all areas, including their initiative to end cancer they begun during their final years in office, partnerships with the University of Delaware and the University of Pennsylvania, and the Biden Foundation.