article

06.08.09

Hollywood's New Don

After snatching up the William Morris Agency, Rahm Emanuel’s younger brother, Ari, is vying to become the next Hollywood strongman, says Kim Masters. But does he have the muscle?

Hollywood hasn’t had a real strongman since Michael Ovitz built up the Creative Artists Agency in the 1980s and called the shots from his sleek I.M. Pei-designed headquarters in Beverly Hills. There’s been such a long gap since he took a fatal step by accepting the No. 2 job at Disney in 1995 that a person had to wonder whether nature really did abhor this particular vacuum.

Outgoing News Corp. president and COO Peter Chernin is said to have described Emanuel’s demand as “extortion.”

But in the past few weeks, agent Ari Emanuel is looking to some like a contender. His agency, Endeavor, snapped up the far larger William Morris Agency, then, with the speed of what was lurking in the waters in Jaws, dispatched top man Jim Wiatt to that nether region where Ovitz now resides. Can you hear that scary music? Hollywood certainly does.

“He pulled a real coup,” says one of the town’s more successful producers. “He got the William Morris Agency to pay his agency top dollar and then took it over and fired the guy who made the deal... It is the Hollywood equivalent of the Six-Day War.” The lopsidedness of the deal has been glaring as dozens of William Morris agents have been let go while Endeavor remains largely untouched.

The question now is whether the 48-year-old Emanuel has the opportunity and the disposition to build himself up into a modern-day Ovitz. In the late 1980s, Ovitz consolidated power at CAA by controlling many of the biggest stars and much of the best material. He had so much clout that he could force a studio to cast a star that it didn’t want to hire. (Example: Universal reluctantly paid millions of dollars to put Bill Murray in the 1993 film Mad Dog and Glory.)

Since Ovitz’s fall, his former underlings at CAA have built a machine that continues to dominate. Replicating that achievement may no longer be possible. “Ari doesn’t have the dominoes,” says a producer who has known him for many years. “The nature of the world has changed.”

And stars have lost a lot of their shine, which robs agents of leverage. In fact, one fact that should not be obscured is that Endeavor’s merger with William Morris arose from need: Endeavor was too reliant on film and television, while William Morris brought strong publishing and music departments.

But a top network executive says a strong-willed person like Emanuel might be able to wield disproportionate clout. “You can still be a strongman in this business because it’s all smoke and mirrors,” he says. “Somebody who creates this perception of himself can be effective.”

Already Hollywood appears to have decided to be afraid of Emanuel. (No one wants to talk about him on the record.) Aside from having a larger-than-life version of his larger-than-life self on television (Jeremy Piven’s Ari Gold on Entourage), Emanuel has the ties to Washington that Hollywood bosses have always craved. He derives prestige from the fact that his older brother Rahm serves as President Obama’s chief of staff though, the connection is not nearly as useful as, say, Lew Wasserman’s ties to Ronald Reagan. (The Emanuel brothers may be close but no one believes Rahm would involve himself in Ari’s business.)

There are three Emanuel brothers (the third one, Zeke, is a prominent oncologist working with the Obama administration on health-care reform) and one has to wonder what their parents put into their Wheaties. As The New York Times noted way back in 1997, all the Emanuel brothers have been described as “obnoxious, arrogant, aggressive, passionate and committed.”

It surprises exactly no one in Hollywood that as a child, Ari was diagnosed as hyperactive and dyslexic. He is still described as having the briefest of attention spans—and the hottest of tempers.

Emanuel famously antagonized NBC by challenging network Co-Chairman Ben Silverman in the corporate dining room over his alleged partying and his penchant for missing meetings with Emanuel’s clients. He also called Jeff Zucker, Silverman’s boss, to complain.

Emanuel had the whip hand with Fox, where he held up renewal of a major deal with Family Guy creator Seth MacFarlane while demanding that his agency receive a mutimillion-dollar fee for “packaging” the show. Studios routinely pay those fees when an agency puts together key elements in a program—say a writer and an actor. What’s extraordinary in this case is that the show had been on the air since 1999. Fox was staggered that Endeavor demanded the fees—outgoing News Corp. President and COO Peter Chernin is said to have described Emanuel’s demand as “extortion.” But the show had a break from 2002 until 2005, when it returned thanks to strong ratings in re-runs and big DVD sales, so Endeavor argued that it was entitled to the money, and Fox, normally one of the toughest customers in the business, caved.

“The thing [Ari] has going for him is when he’s on your side, he’s a great guy to have in the ring,” says a former studio president. “He’s indefatigable. He does not get tired. Take [ Entourage executive producer] Mark Wahlberg. If Mark Wahlberg wants something, he will stop at nothing to make it happen.”

Those who have worked with Emanuel say he is deeply pragmatic in his friendships and his dealmaking. “He’ll figure out what you want to hear,” says a producer who has known Emanuel for years. “He’ll promise it and if he can’t deliver, he moves on. He has no shame, no guilt... He’s not addicted to love.”

Emanuel’s toughness serves him well but he faces much stiffer competition than Ovitz did when he started CAA. Ovitz “capitalized on the sloth and incompetence” of other agents at the time, says a well-known producer. Ovitz invented an agency culture that was disciplined and unbound from the gentlemen’s agreements that had stood among competitors in the past. Today, CAA remains neither slothful nor incompetent and it remains to be seen if Emanuel can invent something that works as well.

For a time, at least, Endeavor sounded like a frat house with money, like Entourage at the office. In 2002, agent Sandra Epstein sued and The New York Times reported that in court papers, “Epstein and other Endeavor employees described office escapades that included rampant pot-smoking, obscene hazing at corporate retreats, sexual frolics on desks, and one agent demanding that his assistants book prostitutes for him.” Epstein walked away with a $2.25 million settlement.

In a more amusing caper, a few years back Emanuel and then-partner Marty Adelstein calculated how many average minutes they were on network television thanks to their floor seats at Laker games. Then they contacted NetJets, a company that provides ownership stakes in those coveted private jets. They offered to wear NetJets T-shirts or hats at those games in exchange for access to the G-V of their dreams. NetJets passed and the two wound up with an unsolicited offer from Captain Morgan’s Rum—with the condition that the Captain sit with them at games. They passed.

Presumably the environment will be more buttoned-down at the new WME Entertainment. There are far more women at the combined agency, including Jennifer Rudolph Walsh, who’s head of the book division and a member of the new board. What’s not clear is whether WME—with clients including Matt Damon, Jack Black, Russell Crowe, and Denzel Washington—can coalesce. “In the long run, I don’t think it works,” says one of the WME’s chief competitors. “It’s utterly inorganic. Success really does depend on a culture and I don’t believe he’s fostering any culture.”

And when it comes to star power, William Morris did not bring a huge list of top clients into the fold. Failing to sign stars was one of the big problems at William Morris, so while the merger has brought Endeavor more breadth, it did not significantly enlarge its galaxy. One former associate says Emanuel isn’t just counting on stars; he wants the new company to expand far beyond talent representation into brokering media deals. “That’s why they called it an entertainment company and not an agency,” he says. But it’s tough to make that work and still placate the talent that constitutes the primary asset of any agency. “At what point does it become too much about Ari and not about the clients?” this observer asks.

But the biggest challenge, he continues, may be far beyond Emanuel’s control. “The economy is still so bad,” he says. “That’s sort of the X-factor of the whole thing. It doesn’t matter what they do if revenue continues to fall so dramatically.”

Kim Masters is the host of The Business, public radio's weekly show about the business of show business. She is also the author of The Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.