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#382 Who Is Michael Ovitz- The Rise and Fall (And Rise) of the Most Powerful Man in Hollywood

Founders

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  • Mackey’s Regret
    • John Mackey claimed Founders Podcast would’ve kept Whole Foods independent by emphasizing cost control.
    • Carnegie’s mantra highlighted permanent cost savings over fluctuating profits and prices. Transcript: David Senra I’ve done a few of these I had dinner with episodes, Michael Ovitz being the latest one. And I did one with John Mackey, who’s the founder of Whole Foods a couple months ago. And John Mackey told me one of the craziest things that anyone has ever said about the podcast. By that time I had spoken to him, he’d already listened to over 100 episodes of Founders. And he said that if Founders podcast existed when he was a young man, Whole Foods would still be an independent company. That since the podcast and all of history’s greatestest Entrepreneurs are constantly emphasizing the importance of controlling expenses, he would have put more of a priority on It, especially during boom times, during good times, because it’s very natural for a company and really for human nature to just not watch your costs as closely because everything’s Going so well. And that is something that History’s Greatest founders all warn against. In fact, Andrew Carnegie has this great mantra that he would repeat over and over again. He says, profits and prices were cyclical, subject to any number of transient forces of the marketplace. Costs, however, could be strictly controlled and any savings achieved in the costs were permanent. This is something I was talking about with my friend, Eric, who’s the co-founder and CEO of Ramp. Ramp is now a presenting sponsor of this podcast. I’ve gotten to know all the co-founders of Ramp and have spent a ton of time with them over the last year or two. They all listened to the podcast, and they picked up on the fact that the main theme from History’s Greatest Entrepreneurs is the importance of watching your costs and controlling Your spend and how doing so will give you a massive competitive advantage. That is a main theme for Ramp. The reason that Ramp exists is to give you everything you need to control your spend. Ramp gives you everything you need to control your costs. Ramp gives you easy to use corporate cards for your entire team, automated expense reporting, and cost control. Matt Paulson, who’s the founder of MarketBeat, recently switched to Ramp and this is what he said about it. Ramp is the best. The amount of money you will save from unwanted renewals and employees who think company credit card equals buy whatever you want will far exceed the best credit card rewards program. Matt is talking about the importance of cost control. There’s a line in Andrew Carnegie’s biography that said cost control became nearly an obsession. Ramp helps you make an obsession in your business. If Carnegie was alive today, he’d be running his business on Ramp. Take the time to set up a demo to see this product, and you will see why many of the world’s top founders are running their company on Ramp. (Time 0:00:00)
  • Value of Autobiographies
    • Learn from older, wiser perspectives in autobiographies, reflecting on past actions.
    • Ovitz’s book combines honesty about struggles and regrets with valuable business-building ideas. Transcript: David Senra And this book is a perfect combination of him being very honest about his struggles, his regrets, the mistakes that he made. Again, with time and with wisdom, he can look back on that. And then equal combination of really great ideas on how to build a business and just fantastic ideas that I think future generations of entrepreneurs can benefit from. So I want to go right to the prologue. This goes, really speaks to why autobiographies are really important. He talks about, I was a terminator. The fear of my opponents felt derived from sheer hopelessness. How could they beat someone so tireless, so relentless, so inhuman? That was the image I took great care to project. It was an image I grew to hate. Who wants to scare the living shit out of people? So right there gives you a hint. I use certain tactics, certain strategies. They were very effective. (Time 0:07:45)
  • The Price of Dreams
    • Michael Ovitz projected a relentless image he grew to dislike, prioritizing dreams at a steep price.
    • Agenting, unlike artistic pursuits, fosters resentment due to its zero-sum nature and competition. Transcript: David Senra You know, he comes to dominate his entire industry. But looking back, it didn’t make for a pleasant life. Speaks a little bit more to this a few pages later. I’m a frustrated artist. I couldn’t paint or sculpt I wasn’t musical, and I sure couldn’t act. So I did the next best thing with my life. I spent it around artists, appreciating them, admiring them, helping them become their best, fullest selves. I was the whetstone that sharpened them so they could slice through anything. Our pitch at CAA was better material, better information, better deals, and will make your dream projects happen. Yet agents, it’s more regret, okay? It’s really important. Yet agents make dreams happen at a terrible price. When a painter paints, other painters might be jealous of his success, but they don’t believe he’s personally screwing them over with every brushstroke. It’s not a zero-sum game. There’s room for everyone to do his best. When an agent’s agents, though, the list of the personally embittered lengthens with the size of the deal. If we poached a new client, his old agency hated us. If one of our movies went to Universal, six other studios hated us. CAA’s goal was to have all the clients and therefore all the conflicts. We used to say no conflict, no interest. It was a heroic goal, but it cost us and it cost me. (Time 0:08:36)
  • Early Drive and Ambition
    • Ovitz’s grandmother instilled in him a drive to succeed at all costs, fueling his ambition.
    • He worked tirelessly, even as a child, driven by a desire to escape his perceived “wrong nest.” Transcript: David Senra She paid a lot of attention. And she says, she also said in a rather like harsh way, she says, you can be better than your father. And he bought into her what he calls the immigrant’s creed that in America, you can be anything that you want. So he says, instead of trying to emulate my father, who was a kind and loving man, I would be what my grandmother expected of me. I would succeed at all costs. And so we see right away, even as a child, and this is something me and Michael talked about at dinner. And we had a shared common bond. If you were to ask him, even now, even today, like, how many hours do you work? All of them. He’s like that at nine. He’s like that in his late seventies. At nine, I got a paper route. Then I asked for a second route, cutting my free time down to the bone. When he was not working, he was reading. He is a voracious reader, just consume so much information. It’s one of my favorite things in the book. And you’ll see this, I’ll point it out over and over again in so many different areas, so many different things he’s working on. He just constantly saying, hey, I’m going to just know everything about this. I’m going to collect more information and know more about the history of this, of what we’re working on than anybody else. He does this over and over again. So even as a kid, he goes, I read everything I could, but my favorites were biographies of successful men. Andrew Carnegie, Winston Churchill, Nathan Rothschild. In fact, one of the things that we talked about at dinner was that he said it. He’s like, I obviously read about the Carnegies and the Rockefellers and the Buffetts, but what he loved, and I’ve heard this from a few other people too, is that there’s a lot of well-known People I cover, but people seem to love even more. Like the unknown people that just live remarkable lives. Like these random, I mean, if you can see my desk, there’s, uh, I don’t even know. I lost count. There’s probably 25 old books on my desk right now. Many of, uh, many of which are about people that no one’s ever heard of. And so we see a young Ovitz working his ass off. No free time will not be like my dad. And I’m going to, Hey, if my dad’s not successful, it’s fine. Let me go pick up the books. Somebody’s going to teach me, right? I’m going to learn how to get out of this goddamn valley. And that’s really the way I think about, you know, he talks about this over and over again. I think a few pages later, he talks about he could see. He could see where he wanted to be. He was on the wrong side of the hill, but he would literally go and stare at the mansions in Beverly Hills as a kid. (Time 0:11:44)
  • Immersion and Hard Work
    • Go above and beyond in your work, exceeding expectations and immersing yourself in the field.
    • Young Ovitz worked extra hours, studied diligently, and sought learning opportunities at Universal Studios. Transcript: David Senra Everything he does is like this. So pay attention to this idea. You’re going to see it over and over again. The other guys to work, from nine to six, but I came in at seven each morning and stayed until nine at night. So two hours early, and I’m going to say three hours later. I walked the entire 400 acres of the lot, right? End to end. I read and reread and underlined my studio guide as if I was cramming for a final, writing out lists of questions for executives and technicians and keeping a notebook full of answers. At the end of each interview, I arranged to come back to observe. I had carte blanche at the busiest film and television studio in the world, and I was getting paid for it. What I learned at Universal, the way glorious films blossom out of an intricate mesh of mundane practicalities enthralls me still. I went in even on Sundays when I could wander the empty soundstage to my heart’s content. Now, the difference between Ovitz and other kids, most people are obsessed, you know, with the movie stars, with the actors. (Time 0:17:17)
  • Ambition in the Mailroom
    • Ovitz proposed learning agenting in 120 days; his ambition impressed the head of personnel.
    • Despite low pay, Ovitz’s drive was amplified by his wife’s support and his desire to succeed. Transcript: David Senra I needed another way to stand out. I told the head of personnel, I have a proposition for you. I think I can learn all I need to know to become an agent in 120 days. If I can’t, I’ll give you back everything you paid me. I was agenting him and he knew it. He broke out laughing. This is the craziest thing I ever heard, but I’m going to hire you. You start Monday. My salary was $55 a week. I said, I’d like to start tomorrow. Again, everything he does is like this. I showed up at 7 a.m., two hours early to learn my way around the building. There were 20 other mailroom trainees, which meant I had 19 rivals for advancement. Now he sticks out almost right away. So they bump him a little bit, his salary a little bit, but he’s making $75 a week. And again, I think this is just fuel and, you know, just adds to his drive because he’s already married. He married his wife, Judy, when I think he was still in college and he’s embarrassed because he’s just like, I have set, I’m making $75 a week. I’m surrounded by you’re in Hollywood. There’s wealth and there’s mansions and there’s fame. And I’m embarrassed. I have to take my wife out. The only place I could take my wife out is these cheap Mexican restaurants and just adds fuel to the fire. But you had a very, Judy was very supportive, especially in his early days. And I think this is really important. I said over and over again, that it’s obvious from reading these books that entrepreneurs either need a supportive spouse or no spouse at all. I think those are literally the only two options. And it says, Judy gave me the line I’d later use when I recruited people to an entry-level job at CA. You’re investing in your life. I despise the mailroom, but I fell in love with the world it served. (Time 0:23:22)
  • Hone Your Craft
    • Continuously hone your craft, studying its history and pioneers.
    • Ovitz meticulously studied client files and legal matters, gaining valuable industry knowledge. Transcript: David Senra And one of the quotes, there’s a bunch of great quotes in there, and he’s talking about how these people achieve great things, like how they went about doing it. And he has a line in there that I think of all the time. He says, hone your craft constantly. It’s extremely important to be obsessive about understanding everything you possibly can about your craft. Consider it an obligation. Hold yourself accountable. Keep learning over time. Study the history and know the pioneers. And his whole point is like, you don’t have to be a genius, right? You can just go out and collect more information than anybody else does. And considering that you have the internet, you have no excuse not to make yourself a world expert in whatever field that you happen to be interested in. And Ovitz does this when he’s a kid. Listen to what he does. So remember, there’s no computers. We’re in the 70s. So it says, we had a file room. Everything that you need to know about the history of this place and the history of Hollywood is in a paper folder. So he said, we had a file room the length of a basketball court. It was lined with steel cabinets, which were, he calls it, the hard drives of that air. They were all packed with 70 years’ worth of manila folders. I viewed those files as an encyclopedia of entertainment. I helped the woman who ran the file room marry. So he starts, he’s agenting her, essentially. I bought her little gifts, a box of candy, a scarf. One day I said, hey, you know, I’d really love to read some of those files. She told me to make myself at home. Within a week, she was letting me stay on after she left. Then she gave me a key. While other trainees waited to be told what to do and read and learn, I entered Mary’s domain each morning at seven and every evening after work. For weeks, I made my way from A to Z through the client files and the network and studio deals. I jotted on questions for Sam Sachs, the head of television’s legal affairs, who was charmed by my interest and lent me a tape of a talk he gave at USC on contract law in entertainment. I watched it at home. Then I came back the next day with more questions. He gave me nine more tapes. This is also really important because the legal office is adjacent to the first floor executives. And Sam Weisbord, who was the head of television worldwide and the top Morris executive in LA, passed it on his way to dinner and again when he returned. So there’s a lot of these people in the book that are like creatures of habit. (Time 0:25:29)
  • Becoming Indispensable
    • Make yourself indispensable by anticipating needs and offering proactive help, like Ovitz did for Sam Weisbord.
    • Ovitz strategically positioned himself to be noticed by Weisbord and provided invaluable assistance. Transcript: David Senra And Obis will just watch you and he’ll observe you. And then he realizes, this guy does the same thing every day he’s gonna leave the office at 6 30 everybody else leaves at 7 he’s gonna come back a few hours later and work another i think He works like what did it say three hours so it says uh the office was empty until sam returned for dinner dinner for another three hours to finish up so what do you think a young ovates does I planted myself at a cubicle where he could not help but notice me, spreading out my files so he would see them. A week later, around 9 p.m., no one else is there. He says, can you do me a favor? We were the only two in the building. In fact, Ovitz is going to wind up having this fight with David Geffen, and then they reconcile later in the book. If you read David Geffen’s biography, he does this exact same thing. Exactly. Starts in the mailroom, figures a way to get a bunch of one-on time with the top executive and then does whatever he needs for that person. So starting three months after my start date at William Morris, I became Sam Weisberg’s guy. I worked as his after hours assistant without being asked or paid. I never went by his office without ducking my head in to see what he might need. So he says service organizations live or die by time management. I lined up all the memos on Sam’s desk by priority. So he’s organizing his workflow. And then he would do very humble things. It’s like, I’m not, I don’t have an ego attached here. I’m going to serve you in any way possible. I would keep his refrigerator stock. I would call stockbrokers and ask for tips on stocks that Sam should buy or sell. (Time 0:27:40)
  • Minimize Internal Conflict
    • Minimize internal conflict for organizational success, similar to Genghis Khan’s strategy.
    • Ovitz prioritized shared clients and teamwork, avoiding turf wars and silos at CAA. Transcript: David Senra And then when they get retribution, their family members are going to seek retribution. And there’s going to be retribution from retribution to retribution. And so we going to outlaw this because we need to reduce internal conflict. And so that was like one of Khan’s major principles, like reduce internal conflict. You see the same thing right at the get-go with Ovitz. Number four, tell the truth. So this is something I talked to him at dinner about. He really values friends that tell the truth, his friends that are able to tell the truth. Obviously, he’s famous and well-known. If you want, you could build people around you and you’ll never hear anything bad. And I think a lot of people make the mistake of doing that. The great founders that we’ve seen over and over again in history, Sam Walton, Jim Casey, Steve Jobs, they want to be told the truth. They respect you more if you push back at them. And I think the bad founders or the bad executives just surround the social sycophants. And then that may work for a little bit, but it always ends terribly. So number four, tell the truth. And number five, this is really one of the most innovative things that Ovid does is he’s going to create opportunities, not just wait around for it. So other agents, they’d field offers. He’s like, why are we just fielding offers? Like, why aren’t we the ones creating opportunities and then going on, try to sell them on behalf of our clients? And they they really like differentiate themselves around that idea. Like we’re going to come up with ideas and we’re going to put that together for you. And like, we’re essentially going to serve you. And he actually recruits a lot of clients. He starts working for people that he wants to be clients that have never signed with him. And what he’ll do is he’ll just bring him a great opportunity. And then that leads them. Then he comes to them with an opportunity. They’re like, this opportunity is great. (Time 0:32:39)
  • Early Challenges and Boldness
    • CAA, initially debt-ridden and doubted, faced threats but Ovitz’s bold bluff averted a lawsuit.
    • WMA’s threat solidified CAA’s “siege mentality,” driving aggressive competition. Transcript: David Senra Great. Do you want me to represent you? That’s a much easier sell. So we see that CAA has very humble beginnings. In debt. They wind up putting up homes as collateral. And it says CAA was a prototypical startup. We bought in folding chairs and card tables for desks. And our wives each came in one day a week to answer the phones. We had one assistant, a bookkeeper. And right away, they have to deal with one, everybody around them doubting them. You’re not going to succeed. The people that stayed at William Moore said, hey, just so you know, we have like a bet at the office that you guys are going to be out of business within six months. And then they WMA threatens a lawsuit and tries to destroy CAA before they get going. And so this is Ovitz’s response. And they were terrified. They’re late 20s, and they get this letter from one of the most powerful attorneys in Hollywood saying, essentially, we’re going to just crush you. And Ovitz’s response here is fascinating. He goes, my one play, A Long Shot, was try to intimidate my old boss. From working for Sam, I knew the Department of Justice was probing William Morris for monopolistic practices. So he calls up the attorney. OK, he goes, I rang up Leon Kaplan. He sounded arrogant. And why not? He pegged CAA as weak, broke and defenseless. Mr. Kaplan, I said, we haven’t met, but I know who you represent. I think you’re trying to put us out of business and I think it’s inappropriate and unfair. And it could be really interesting if this went to the Justice Department in the middle of their antitrust investigation. My tone was firm, but matter of a fact. I continued, you can rip up this letter, and we can all be friends and forget about it. Or you can pursue it, and I will call a pal of mine who works at Justice, the Justice Department, and I’ll ask him to throw this in the hopper, and we’ll see how this sorts out. And so the lawyer and WMA back off, and I think it’s probably obvious, but like, Ovis didn’t have a friend in the Justice Department. He was bluffing. But this is the punchline, the important part. That day forged our siege mentality. To defend our tiny position, we unleashed hell on anyone who crossed us. For the rest of my time at CAA, I was a great friend and ally, but an implacable foe. When you’re 28 years old and you’ve quit your job and there’s no going back, and then the industry leader tries to smother your baby in its cradle, you steal up pretty fast. Kaplan’s letter taught us to play hardball, and hardball we would play for the next 20 years. So when you’re not making any money, you don’t have a lot of money, you’re in debt. What option do you have in your startup? (Time 0:34:20)
  • Opportunities in Plain Sight
    • Capitalize on opportunities others overlook, turning seemingly insignificant ventures into major successes.
    • Ovitz transformed Shogun, a project languishing at William Morris, into a highly lucrative miniseries. Transcript: David Senra Even more today because the book is almost 10 years old. Shogun had, this is the important part. I think you and I have been talking about this over and over again the last few weeks. How many of these people were able to build empires? In many cases, billiondollar empires off of opportunity hiding in plain sight. Shogun, it’s not like the CAA was the first company to see Shogun. And Ogun says this over and over again. He takes things that other people pass on and turns them into phenomenal successes. Shogun had languished at William Morris for three years. CAA got it made. Never mind that the deal almost fell apart 20 times. Deals always almost fall apart 20 times. That was the first time we took a client’s farfetched dream and made it come true. So he’s doing the best with every opportunity in front of him, but he still has his long-term plan. (Time 0:43:51)
  • Deepen Your Understanding
    • Deepen your understanding of your field by immersing yourself in its history and nuances.
    • Ovitz watched every Oscar-winning film to grasp the language of film, enhancing his expertise. Transcript: David Senra He’s like, I want to have the best directors. I want to have the best actors. So he winds up making a list of all the best directors that he wants to represent one day. And he says, I was dreaming, though my dream would eventually come to pass. And so he winds up, some of these people are like Morton Sourcet, C and Stanley Kubrick. And one advantage that he did, right? Think about like, I’ve done a bunch of podcasts on directors like Christopher Nolan, Tarantino, Spielberg, George Lucas, they’re all the same in the sense that they have this encyclopedic Knowledge of film history in their head. And what Ovitz realizes is like, oh, I need to get that in my head. So then I can be able to relate to them and understand them and talk to them about this. So what does he do? Know the history of the industry. And right, I was beginning to believe that I can converse with those guys because when we launched CAA, I had started a private project, one that took me 10 years of watching every film That had won one of the big five Oscar, big five category Oscars. I discovered why Gone with the Wind had passed the test of time and how green was my valley hadn’t. I learned the relationship between vision and craft. Film had its own language and I needed to be bilingual. (Time 0:44:37)
  • Strategic Targeting
    • Target smaller players or weaknesses to gain a competitive edge, as Ovitz did with Steve Roth instead of Zig.
    • Ovitz secured key talent by strategically targeting Roth, Zig’s junior partner eager to leave. Transcript: David Senra Okay. And so Zig has just like one assistant and a junior partner. And so he says, I decided to try to buy him out. To make him more receptive, to soften him up, I escalated my campaign again to sign Sidney Pollack. I’ll kill for you, I told Sidney. All I had to sell was my passion and energy and the fact that I was 30 years younger than Zig. As Sidney wavered, we got screenplay after screenplay into his hands before Zig did. Each day, I spent up to two hours on Sid, on Sidney rather, excuse me, far more than anyone who spent on his biggest signed client. So this is actions expressed priority. He’s telling you with his actions what’s important. I’m going to get this guy. In 1981, with our courtship in a second year. Remember he started, I think the very first page, he calls himself the Terminator. And so in my mind, I have that scene where they just keep shooting. He just keeps coming and keeps coming and keeps coming. I just feel that that’s how Ovis was like, definitely in this situation and many others. So he’s like, okay, I’m going to spend two hours a day. It’s going to take me two years. And I’m just going to out hustle your agent and show you that I’m obviously better than that. So he signs with us at last. Having dealt Zig a body blow, we offered him $750,000 for his agency plus a lifetime royalty on his client’s work. He’d keep a piece of his business in perpetuity, even if he never came to the office. Zig passed. But during our discussions, we discovered that Steve Roth, the only other partner, his junior partner, right, is the one who was actually servicing their best clients and that Steve Was eager to leave. We promptly cut a deal for him to come to CAA that got us most of what we wanted. And all we had to pay Steve was $250,000 a year. Way better, cheaper than paying Zig $750,000. And then this just, again, more Terminator-like, I’m going to roll over everyone. Anyone in our way was going to get rolled over. With the core, his core business gone, Zig sold what remained to ICM, and he was done. The truth is that I didn’t give a thought to Zig after he turned us down. You never heard that someone was unhappy afterward. They just lost. But flattening Zig was the beginning of my Sherman-esque march to the sea. (Time 0:50:44)
  • Work-Life Balance
    • Be mindful of the toll a demanding schedule can take on personal relationships.
    • Ovitz’s intense work routine strained his family life due to exhaustion and constant work demands. Transcript: David Senra I was waking up at 5.45 a.m. 15 minutes later, I’d be riding the bike in the gym and making calls to Europe, skimming five newspapers, marking articles for my assistants to strip out and distribute to the firm. After 40 minutes on the bike, I’d do 30 or 40 minutes of martial arts, working myself to exhaustion. By 8 a.m., after showering and eating a fast breakfast, I’d be on the car phone in route to the office. After our morning meeting, I’d take meetings, have lunch, a drink with a colleague, and a working dinner, all in between running calls, up to 300 phone calls a day. After being a chameleon all day at work, it took me an hour or so to figure out who the fuck I was when I got home. And all the time, the phone would keep ringing, which drove Judy crazy. She would want to discuss my day to feel closer to me, but I was exhausted by my day. And I didn’t want to talk about work in front of the kids. I wanted them to feel normal and safe. After the kids went to sleep, I worked every night skimming through three or four VHS cassettes I’d brought home and chipping away at the stack of screenplays. Then I’d fall asleep to Johnny Carson at midnight and do it all over again the next day. My kids viewed my world less as something to aspire to than as something to lure me away from. They often noticed that though I was playing with them when they were young or asking about their days when they were older, that my attention was elsewhere. Could you please come back to reality, they’d say, or just earth to dad. (Time 1:03:41)
  • Hidden Issues
    • Hidden issues can exist even in close relationships, as Ovitz discovered with Ron’s gambling debt.
    • Despite Ovitz’s perceptiveness, Ron’s hidden gambling problem surprised and deeply shook him. Transcript: David Senra So then one of the most surprising parts of the book is just this insane co-founder conflict craziness. So one morning, 1987, Ron comes into my office, shuts the door and says, I’ve got a problem. I said, shoot, we’ve had a thousand conversations that started like that. I lost a lot of money in a poker game and I can’t pay up. I was shocked, but I said, okay, we’ll take care of it. I figured it was like $100,000 or so. How much? I’m not sure you’ll be able to take care of it. How much is it? Over $5 million. Ron told me he’d been going to Vegas several times a week. He’d make the flight after work, play deep into the night, and grab a few hours of sleep before flying back to LA in the morning and working his ass off as usual, never missing a meeting. I was unable to process this. My partner, my best friend, the guy I was tied to for life, clearly had an unconscious need to throw away everything that we had worked for. So the company winds up lending him a little bit of money. He was saying over and over again, don’t worry, it’s never going to happen again. For the next year and a half, Ron and I worked harder and more closely than ever. Then one morning, he closed my door, took a seat, and looked at me with a funeral expression. You’re not going to believe this, he said, but another poker game and an even bigger loss this time, $6.5 million. I felt that he’d smashed me with a baseball bat. Who was this man? I was deeply, deeply shaken. Despite my 360 degree paranoia, I hadn’t seen any of this coming, which scared the crap out of me. I prided myself on reading people and forecasting from subtle clues. And here I hadn’t been reading Ron right for 10 years. That fact was so shocking to me that I instantly tried to forget it. (Time 1:06:54)
  • Misjudging the Bubble
    • Ovitz acknowledges his role in escalating movie costs, contrasting with Wasserman’s approach.
    • Wasserman misjudged the film cost bubble, which lasted 15 years and impacted Universal’s success. Transcript: David Senra Now, there is an idea that I think might be related to today as well. So his, you know, Lou Wasserman is much older. And what’s happening is Ovis is pushing up the price to how much movie studios have to buy. Because if you own 75% of the market, you package everything together. I’m making up these numbers. But let’s say you used to be able to do the movie for a million and now it’s 5 million. It’s a substantial amount, maybe 10 million. It’s a lot larger amount. I think it’s very common. It’s like your industry was valued at one way for a very long time. And, you know, you came up and you kind of dominated that. And now you see this like huge step up and you’re like, oh, that’s, that’s like a bubble. I’ll just sit on the side and, and wait it out maybe, but maybe it’s not a bubble. And you’re starting to see that, you know, I think present day, it’s obvious, like with, with some of the value valuations of these companies, some of the, the huge rounds that are being Done. And so I just think there’s like, there’s a, there’s like an analogy here. I don’t know if it’s, you know, I’m not, I have no idea what things are worth. I just think it’s fascinating that somebody that lived and literally got to the top of their profession called this wrong. And so this will make sense in one second. Essentially Lou passed on movies that seemed too expensive, but that bubble lasted 15 years and it outlasted Lou’s career. So it says, when we founded CAA, Lou Wasserman’s MCA Universal was a power in film and dominant in television. Then the inconceivable happened. The Last Mogul got old. As the cost of making movies soared in the 1980s, in large part due to us, Universal hunkered down. Despite the runaway success of George Lucas’s Star Wars, the studio passed on Raiders of the Lost Ark when Lucas’s lawyer demanded a 50-50 split. Paramount scooped up the movie on those terms and they made a killing. Lou chose to ride out the bubble and pass on deals that he deemed inflated. But that bubble lasted 15 years. (Time 1:15:50)
  • Beyond Agenting
    • The desire for equity and a more impactful role can drive career transitions.
    • Ovitz sought equity and decision-making power, wanting to move beyond agenting. Transcript: David Senra And And then on top of that, he says, I yearn to build equity. Once an agent stopped working, there was no more accrued equity to fall back on. Executives I considered as my peers, Michael Eisner, Barry Diller, were raking in hundreds of millions of dollars in stock options. I wanted to play in that league too. And in truth, I’d always been faintly embarrassed to be an agent. As much as CAA had professionalized our field, it would never be a noble calling. (Time 1:22:07)
  • Co-founder Breakup
    • Ron Meyer’s decision to take the MCA job, originally intended for Ovitz, led to a painful professional breakup.
    • Ovitz felt betrayed and devastated by Meyer’s acceptance of the position. Transcript: David Senra I wanted to be one of the six people who could say yes to a movie without scrounging to assemble all of the elements ahead of time. So he almost leaves CAA to run MCA Universal. And Ron, his best friend and partner, was kind of acting his agent through the whole process. They get to the end and Ovitz realizes that he’s not too sure about the relationship with the owners and it’s too big of a chance. So he decides to not take the job. And his friend and partner arrives at the exact opposite conclusion. So this is where they complete, this is a co-founder breakup where he breaks up with his co-founder. Says, Ron called me one day. Guess what? I met with Edgar and there’s been a change in plans. He wants me to run MCA and I think I’m going to do it. I felt completely numb, with disbelief. The job on the table, chief operating officer, was one I’d negotiated for Ron in my last go-round with Edgar with one big difference. I was out of the picture. So they’re going to bring in somebody. Ovitz was going to be the COO or CEO and Ron was going to be the COO. And then they decided to ditch Ovitz. And then they bring in this other guy named Frank as the COO that Ron’s going to report to. After a long silence, when I felt I could speak without my voice breaking, I told Ron how much I needed him, what it meant to me to have him at my side. What came back in a burst of rage were all of Ron’s pent-up grievances. Remember when Ovitz said earlier that he had set off this emotional time bomb. It just took 16 years to explode. This is what he was talking about. What came back in a burst of range were all of Ron’s pent-up grievances. How I had made a big mistake by walking away from MCA. How it had always been all about me, never about him. How it was time to strike on his own, to be recognized as something more than my consigliere. I tried to sell him for two hours as the knot in my stomach swelled into my throat. Finally, my voice faltered and I gave way. His mind was made up. I felt absolutely crushed. (Time 1:22:32)
  • Disney Disappointment
    • Ovitz joined Disney despite warnings about Eisner’s leadership style, ultimately leading to his dismissal.
    • Both Ovitz and Eisner expressed regret about their partnership shortly after it began. Transcript: David Senra But the reason I want to bring this up is because there was… Ovitz is talking about all these signs that he ignored because of his personal relationship and the way that he thought Michael would treat him. And we realized, we talked about this in the Jerry Jones episode. There’s some people that just are not they don’t they’re not they’re not the sharing type. Right. And Jerry Jones wasn’t like that. And everybody around him knew that. And they would tell you, like, if you’re going to come in here and you’re going to be his coach, like you’re a clear number two or like Jimmy Johnson, even though they were old friends, He wanted like equal billing. And Jones shows that he wasn’t down with that because he fired him right after he won the Super Bowl. And who he replaced him for, Barry Switzer was very comfortable being a number two. That was going to be a conflict, you know, with these two personality types. And there was also signs that Ovitz ignored. He talks about one here. This move came with risks. I knew how Michael treated his deputies. One of Eisner’s closest friends had told me flatly, Michael is incapable of sharing with anyone. But I believe that I was immune to Michael’s rages and suspicions. After Ron, he was my next best friend. But even before he officially takes the job, like it keeps shifting who’s reporting to, who’s reporting to him. And it’s just like he’s not listening to his intuition and so there’s this like weird thing that happens with Eisner and Ovitz and a few Disney executives at Eisner’s house before the Announcement takes place and Ovitz calls his wife and he says Michael just threw me under the bus. No matter what I do, I’m going to fail in this job. I think I just made the biggest mistake of my career. Eisner says almost the exact same thing. He’s actually working with this guy that I think was like writing a book on him. And when, you know, Ovitz like slept on it for a day and then he calls even after he told his wife that. And he’s like, OK, I’m going to take the job. It says minutes after I called him following my meeting with my brain trust to say I was in, he told this author exactly what I’d told my wife the night before, that he just made the biggest Mistake of his life. He wondered if he could take his offer back. I wish he had. And so Ovitz is only going to last 14 months at Disney. And again, he does what he always does. He’s like, let’s buy this company. Let’s innovate over here. Let’s try to do something different. And Eisner would tell him, that’s the stupidest idea I ever heard. He’d block him over and over again. He just felt very uncomfortable by, you know, trying to share the spotlight by any means with Ovitz. And he winds up being fired by Eisner. And so in September 1996, a Disney executive comes into Ovitz’s office, says, Michael doesn’t want you at the company anymore. Go tell Michael to come tell me myself, himself. I said after a 20 something year relationship with my so-called friend, I thought I deserved to be fired face to face. Michael didn’t appear. He had volunteered to throw the party for my 50th birthday that December. Three days before my birthday, Michael summoned me to sign off on my resignation, which he said was by mutual consent, which obviously it wasn’t. And then this gets really crazy. He said he still wanted to stay friends and he wanted to host my party. A bizarrely crazy idea that wouldn’t happen, of course, but one that was quintessential Eisner. 20 years later, I still have no interest in ever sitting down with him again. (Time 1:25:09)
  • The Value of Camaraderie
    • Cherish the camaraderie and shared passion in professional relationships.
    • Ovitz, despite his achievements, ultimately valued the relationships and shared experiences most. Transcript: David Senra And it’s actually found on the last two pages because he built this phenomenal headquarters for CAA and he just wound up holding onto it and keeping it, you know, decades after he had Left CAA. And so he ends this book in a really, frankly, beautiful way where he’s touring this old building that is now empty. Sony had leased it from him for like 20 years. And he’s walking around and he’s looking back on his life. He says, I was hit by the magnitude of what I had done in that building. And it seemed kind of amazing. This kid from the valley with no stature, no tenure, no network to rely on, reshaping the entertainment business. In my empty fortress, I realized that I wasn’t out of the valley yet. I’m free of it in my daily life and in my bank account, but I’ll never be free of it in my brain. You carry your origins with you. Still, those origins drove me here and built this place attracted so many bright, funny, and creative colleagues. In the silence, I discovered that the only thing I really miss about the agency business was the camaraderie, my comrades and friends, and the passionate way we spend our lives together. I miss the people. And so I think that closing lesson, like it’s all about the people. And the best way I describe about this is like one of your missions in life comes from Charlie Munger. You should be building, your goal is to build a seamless web of deserved trust and work with those people and do life with those people for the rest of your life. It is all about the people. And that is where I will leave it for the full story. Highly, highly, highly recommend buying this autobiography. It’s one of the best autobiographies. If you buy the book using the link, it’s in the show notes below and also available in your podcast player and at founderspodcast.com. (Time 1:29:24)