In A Rare Interview, Ovitz Defends His Power

By JANICE CASTRO LOS ANGELES Michael Ovitz

Q. As a talent agency, CAA represents many of the top stars. Now you have agreed to advise Credit Lyonnais, the French bank that effectively controls MGM. Isn't it a blatant conflict of interest to advise a studio while representing movie stars, directors and writers who seek work at studios?

A. I'm not advising MGM. I'm advising a bank that holds a major stake in MGM, that has loaned $3.1 billion to various entertainment companies and wants to rethink its entertainment investment strategy.

Q. Why?

A. I didn't call them. Credit Lyonnais called us. They want to learn more about films, television and music. CAA represents many of the top people in those fields.

Q. Jeff Berg, who runs International Creative Management, your principal competitor, says it is not legal for you to receive compensation from MGM or any other studio while representing talent.

A. Everything about it is perfectly legal. I will be meeting with the guilds representing writers, actors and directors, and I will tell them everything about this consulting agreement to address any concerns they may have. Do you think if I had a blatant conflict I would be holding that meeting?

Q. Then why is Berg so adamant in attacking your deal with the bank?

A. This is a very competitive business.

Q. You mean he wants to make your clients nervous so that they'll go to ICM?

A. No comment.

, Q. But how can you separate your responsibility to represent a client's interests from your responsibility to advise a company that may employ your client?

A. Look, this industry invented conflicts of interest. In what other business would you have a lawyer who represents the chairman of a major film studio and also represents an important actor be the guy who makes the deal between the actor and the studio chief? Hollywood is a small, familial place. Everyone does business with everybody else. The same complications occur in investment banking. But just as they build a Chinese wall to separate the parts of their companies that have competing or conflicting interests, we have built a Chinese wall at CAA. It's all about ethics and how you do business.

Q. You helped Sony buy Columbia Pictures in 1989. You helped Matsushita buy MCA/Universal in 1990. People accused you of dabbling in investment banking to satisfy your ego.

A. Nonsense. We got paid very well for our help, and both of those studios are stronger as a result. That means my clients will have more good places to bring their projects. Look, all of the big studio companies are deep in debt except for Disney. I have helped to bring more new capital into the entertainment business than anyone else in recent memory. It's all about expanding markets for my clients.

Q. Your company also helped create Coca-Cola's new advertising campaign. You are consulting with Nike and advising computer firms on possible entertainment products. Are you bored with being a talent agent?

A. That is absolutely wrong. I spend 85% of my time handling the needs of my clients. And every single move we've made has been tied directly to our clients. My job is to help my clients understand how the landscape of our business is changing so that they can create great new kinds of entertainment.

Q. How so?

A. The entertainment business is evolving very rapidly. Within 10 years new technologies are going to completely change the way we receive entertainment and information. Video stores will probably go out of business, for example, as pay-per-view becomes widely available. And if soon you'll be able to choose from 500 channels on your television, what are they going to play on those 500 channels? There will be a high-tech box on your television that enables you to access a cornucopia of choices. I want to feed that box.

Q. Movie studios once picked the projects, hired the actors and directors, and - provided the financing; now you often package the talent, generate the projects and find the financing. It is as if you are eliminating the role of the studios, refusing to wait for them to offer your clients projects.

A. I don't want to wait for anyone! This business is in a contraction right now; money is tight, movies cost more, and fewer of them are being made. But as soon as these new technologies are in place, there will be a tremendous new demand for entertainment products. If I operated in the old-fashioned way and simply made deals with my clients at studios, where would my clients be in five years? Or 10 years? I wouldn't be doing a very good job for them.

Q. People say you are a control freak.

A. What's wrong with that? When I get on a plane, I don't want a laid-back pilot. I want a pilot who is a control freak, who is paying attention to every single detail of his job.

Q. Have you become too powerful? Your critics say people fear you. That you can be abusive when crossed.

A. I have been known to use an occasional gerund when it serves to make my point. I am very good at confrontation. I think that is part of my job. Ask my clients if they want a laid-back agent or a control freak.