7 lessons from the story of CAA

A few months ago, James Andrew Miller released his new book telling the tale of Creative Artists Agency (CAA), one of Hollywood’s most renowned and powerful companies.

Coming in at 707 pages, it’s a pretty hefty read. There are definitely a few flaws and some sections feel like a slog, but the snappy talking heads style works well and plenty of juicy anecdotes can be found.

If you don’t want to work your way through the whole thing, here are seven key lessons from the company’s 40 year history.

1. Think Long

One of the best passages in the book describes how CAA founder Ron Meyer began working with Sylvester Stallone. It’s a great example of the benefits of forgoing the short term gain for the longer term opportunity.

At the time, Stallone was on the cusp of becoming one of the biggest movie stars in the world but didn’t have an agent, only management.

The management company were very wary of their client being wooed by a talent agency and strongly advised him to keep Meyer at bay as they felt he’d just be looking for cash, even when he hadn’t earned it.

Whilst not (yet) his agent, Meyer had been informally advising Stallone on script matters around ‘Rambo: First Blood’, and upon a deal being closed for Stallone to star in the film for $5m, the star decided to test his would-be representative.

Knowing that the then-fledgling CAA was in need of cash, Stallone called Meyer to offer him 10% of his fee as a commission. Without Meyer being aware, Stallone had one of his management team listen in on the call so they could both gauge the reaction.

Meyer declined, feeling he hadn’t done enough to earn the $500k, and that he wished Stallone the best of luck and hoped they’d work together down the road.

With his manager red-faced, Stallone knew he had his man and signed with Meyer and CAA, knowing the long game would always be front of mind.

2. Get in the centre of the action

There are many examples of this throughout the book, and a few cases that veer into nepotism territory, but either way the chances of success increase hugely if you’re in the middle of the industry you want to be in.

In the late 80s a young writer moved to LA to study at UCLA and write movie scripts. Via a friend who knew someone at CAA, the writer got a meeting with a CAA agent and one of these scripts (which had been left in a bin for the previous 6 weeks) piqued the agent’s interest.

Within a few days it had sold to Warner Brothers for $250,000 and became one of the biggest hits of the decade — Lethal Weapon. The writer, Shane Black, went on to write some of the biggest action and adventure movies of the last 20 years.

Without being in the middle of an industry, that kind of rapid breakthrough is far more difficult.

Marc Andreessen also talks about this in his Guide to Career Planning

Once you have picked an industry, get right to the center of it as fast as you possibly can.
Your target is the core of change and opportunity — figure out where the action is and head there, and do not delay your progress for extraneous opportunities, no matter how lucrative they might be.

3. Know the numbers; data can make deals

Kevin Huvane and his quartet of fellow ‘Young Turks’ rapidly rose to take over the running of the agency in 1995. However, whilst they were very capable agents, they realised running the business was a completely different proposition and that the numbers were key.

Huvane admitted to having never looked at a spreadsheet before. The realisation of how much the company was spending on fruit was the wakeup call that he needed to get a proper handle on the numbers if he was going to be able to lead the agency.

A deal where data modelling helped persuade the doubters and make its principals rich was for the Arnold Schwarzenegger and Danny DeVito film ‘Twins’.

Sandy Climan (aka ‘The Briefcase’) and his team modelled out how the deal could take shape, persuaded the studio to run with it, and also convinced the stars to give up their usual advance fees in exchange for a big chunk of the back end. The result was the biggest pay day Arnie & Danny had ever had.

As a footnote, several sources quotes on the book allude that one of the reasons CAA founder Michael Ovitz’s AMG venture crashed after he departed the agency may have been because he didn’t have a strong enough handle on the numbers, particularly in the TV business.

4. Client service should go beyond the direct field of expertise

Throughout the book, Michael Ovitz gets a pretty rough ride from a range of people (seemingly justifiably on more than one occasion), but one of the things he excelled at was knowing when and how to go above and beyond the expected level of service.

Ovitz understood that client service goes past core expertise; an example of his all-seeing eye being very much in the interest of his clients was that he made a point of knowing all the best physicians, schools, architects and other service providers across LA.

Calculating it may have been, but connecting his clients with these people was all part of the service. By getting them what they needed when they needed it, the perception of him being at the very centre of their universe only increased. Very quickly he became the man who could make things happen.

5. Put together packages

CAA arguably built their entire business around packages. The concept certainly isn’t new, but they were the company to make it their calling card and turn it into a huge operation.

In the case of the Dustin Hoffman movie Tootsie, all the casting was done within the CAA office rather than at a casting agency office or studio. CAA agents outside the deal were able to easily get wind of a casting opportunity for their clients, while agents outside the building had a hard time getting anyone in. Michael Ovitz pushed for Sydney Pollack, another client, to direct despite the animosity between the two men, and then shoehorned Bill Murray into the cast at the last minute.

The agency were able to position themselves as a purveyor of through-the-line talent, able to put together directors, producers, lead roles and small supports all under one roof.

The package CAA put together for Jurassic Park in 1992 included a piece of the action on any by-products created off the back of the movie. The movie itself did very well, but Jurassic Park was a real winner because of the sheer breadth of the franchise spin-off package. CAA got paid every step of the way.

6. Know when you’re a principal and when you’re not

Michael Ovitz was the trailblazer who shocked Hollywood in the 80s and 90s by expanding into investment banking and advertising. Quoted from a recent article on arch rivals WME’s entry into other sectors, Ovitz says;

“I had a slogan I used: ‘No conflict, no interest.’ We were constantly getting the back of our hand slapped with a ruler and told, ‘Hey, you can’t be a principal. You can’t produce commercials.’ But we did. We got around it. I don’t believe that today’s environment is hostile to that. Creating jobs is all anyone cares about.”

Conversely, CAA’s long-time head of music Tom Ross recalls an incident when he was in rehab for weight loss and met a famous rock star. Ross knew his job wasn’t to be the principal, it was to be their representative and by default be at least one step back in the shadows.

Tom Ross: “I was there a month, and one day I ran into Steven Tyler, who was there for drug rehab and sexual addiction. They arranged for us to spend an afternoon together and Steven said to me ‘Man, I don’t know if I can do this. I just can’t imagine going to a gig and not getting laid or not getting a few blow jobs.’ I looked at him and said, ‘Try being an agent for a few years. You get used to it.’”

Agent Paula Wagner realised that the role of the agent was to be the representative of the principal, not the principal themselves. She left CAA to become a principal — in this case Tom Cruise’s movie production partner.

Trying to become the principal when not it’s the part you were originally supposed to play can be dangerous territory — although in recent times the boundaries have become far more fluid.

It’s going to be interested to see the progress of WME’s moves into new spaces.

7. The power of 3

A group known as the Young Turks made moves to take over the running of CAA in the mid 90s. There were 5 in the group, but 3 of them stood out as the leaders and are still at the top of the company to this day.

There’s a lot to be said for the power of a tribe, and also for the power of a trinity. In the Young Turks’ case the trio at the centre started a tribe that was able to change the culture of the business and quickly build a power base.

They did it through the combination of Byran Lourd’s charm, Richard Lovett’s ego and relentless nature, plus Kevin Huvane simply being a great agent. A trio with this blend of skills is not an uncommon sight at successful companies, particularly those in the creative industries.

And with the Young Turks having been together for over 20 years, CAA co-founder Bill Haber’s words also ring true;

“In any business on earth — I always say to people — nobody will leave you for the money, and nobody will leave you over titles. People will only leave if they have no loyalty to you.”