CAA (with Michael Ovitz)
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I was watching you with boma at the ninety second street. why?

How great is bill? right?

He's like the worst interviewer ever, but is a layer as he would be very, we will let you ve talk more than build did.

Is IT you with the you with that you who got now easy you easy you with you sit me down, say, welcome to season episode. The season .

finally of acquired the podcast about great technology companies and the stories and playbooks behind them. I'm been gilbert and I am the co founder and managing director of seattle based pioneer square labs and our venture fund.

psl ventures. I'm David role, and I am an Angel investor based and just .

go and we are your hosts. He was the most powerful man in hollywood for two decades. He is responsible for movies and T, V, shows you love, like late night with David letter man, jurassic park, back to the future, rainman, goodfellow ws and literally hundreds of others.

We are here today with Michael evets to tell the story of creative artist agency C. A, A, the legendary talent agency he founded in one thousand nine seventy five that changed the power structure in hollywood forever. And not just hollywood, as many of you probably know from our earlier episode this season, Michael N. C, A, A inspired none other than mark in recent and ben horowitz, similarly, the power structure .

of silicon valley. Boy did he ever. Uh, what a great weight in the season. I am so pumped.

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Show is now publicly available in all podcast players for free. So only the the first two weeks of brand new episodes are in the private feed. Everything else you can go search acquired lp show in the podcast player of your choice and get all those episodes. Now without further do our conversation .

with Michael evets.

Michael, welcome to required.

Thank you very much.

IT is so great to have you here with us. So we're thinking, of course, like any good creative artists, we're going to steal from your book and we're going to start in media rest and then rewind just to set the stage for what's to come.

Just don't ask me any hard questions.

Well, I think you'll enjoy tell him this story. Can you tell us the jurassic park story?

You must be like me and like dinosaurs.

Well, that was the key. All very right. Everybody likes dinosaurs.

I think that's accurate. That's what got that movie made, basically.

So you had a preexisting relationship with Michael cryan, but he hadn't produced any new material in a while that, right?

So Michael was a client mine starting in the late seventies. And we develop an extraordinary close personal relationship that went way beyond our professional relationship. And I literally talk to him every day of the week. And I did that not because he was a client, partially because he was a friend, but mostly because he was one of the smartish and most interesting people.

He was really like a Leonardo vi, right?

He was amazing. Here's a guy who was a medical doctor, screenwriter, director, travel writer, short story writer, novelist, and just was probably the greatest breakfast ever have at a dinner party because he could talk about anything with an extraordinary depth of knowledge. And it's fascinating to me, because later we will talk about another friend of mine who I love putting together in that mark and reason.

The two of those guys probably suck ninety percent of the brain power that god gave away in their birth years. They're just extraordinary. But Michael ran into a very tough patch, really tough batch.

And a lot of writers and creative people, and you've probably heard the expression writers block, you know, they occasionally just IT doesn't flow. Artists have IT as well. I have a friend was a phenomenal painter and he just couldn't get IT together for six months.

He just wasn't coming out. And I think that Michael was in a position where he was going on a couple years, and he just wasn't happy with what was coming to him. And I used to have lunch with him once a week, and I would push him constantly at the launches to try to see if I could ignite a small Spark.

And at one of the lunches, when things seemed the bleeding st, he said to me, what do you think of three people age Younger, and maybe one little older person stranded in an amusement park off the coast of south america, and the core of the amusement park, our prehistory, animals? And I looked at, and when I said, wow, my Young son likes dinosaurs. I like dinosaurs.

My dad likes dinosaurs. This is really an extraordinary, interesting idea. And we then talked for almost three hours about paleontology, about as as possible, you could breed these type of beings in the twenty years century. Could have be made real.

Is that possible with in those days with the kind of technical know how IT was available in the nineties to do IT? And we came to the conclusion that IT was worth him sitting down and trying to write IT and loan behold SAT down. In five months later, he called me up, and i'm sending you a draft of a book about what we talked about, and he sent IT over.

And I remember sitting down around six o'clock in the evening, six thirty, I had something. Indeed, I had left the office early, and I just started reading type written manuscript pages, and I didn't finish until around three in the morning, and I called him at seven A M. And I said, this is the best thing you've written in ten years and I said, I just couldn't stop turning the pages just as an a side.

One of the great tests of whether something works or not is how quick you turn the page. And, you know, from reading just recreationally. If you turn the page, you like the book.

And I just devour this work and I said that I said, look, this is brilliant. It'll make an amazing book. It'll make an amazing movie.

And I said, there's only one guy in my mind that can make this movie. There are not two guys, are three guys, are four guys. There's one guy.

And if we don't get them, I would be worried about what this movie looked like. And he said, who when I said Stephen, and in our world, there are certain people that have single names. There's madona, there's share. And there is Steven.

of course, Stephen spielberg, who was also the one director who was not your client.

He was not my client, and I wanted him to be a client very badly. So my brain started to work on overtime. And basically I said, Michael, i'm in a call, Steven, so at nine am I called Stephen. We talked and I said, i've got something I want to send you and I know you don't read at night, so i'm gonna call your wife kate cap shaw, and i'm going to ask your permission for you to disappear and night and read.

This is like a classic agent tric creators to call somebody's fouth.

I have no choice because I had to create a sense of urgency around this, but also, I didn't want to oversell, and I didn't want to do so. So he agreed. He said, caller, I didn't. SHE agreed set on the book. He said, how much time do I have? I said, you've got today and tomorrow and loan, behold, the next morning at seven thirty in the morning, my phone ring and I was Stephen he said, this just knocked my socks office said, I couldn't believe this bookies that i'm making this movie and .

what year was this?

So this was about a year before the movie was made.

Ninety one, ninety two.

It's very unusual to begin this level of preproduction on a movie even before the book is published. I mean, this is on the first version of the menu script, right?

Yeah, this is highly unusual. What's even more unusual is I asked Stephen to commit to the movie subject to a budget, and we had no distributor and no financing. And Stephen was the most sought after director in the business. And to his credit, he said, okay. And I called his producer, Cathy Kennedy, who, oddly, her husband, Frank Marshall, was my college roommate.

Wow, no way.

So I had a little credibility there .

in Kathy runs, lucas felt now.

IT or no credibility, David, depending on how you look at IT. And I said, can we get a budget on this book? He said, sure.

He said, but they have a script. I said, no. So I sent him the book. Send her the book. They both read that we did a rough budget, and Michael decided to write the script, subsequently brought in some help.

And basically I went to universal, which was where Stephen was housed, and I called the head of the company, said shine berg. And IT was kind of a famous saying at the moment, but I said, said we got good news and bad news. He said, great.

What's the good news? I said, we've got a Michael crin book, Michael cronin screen play, Stephen speed barkers committed to direct Cathy canadians gonna produce. And I said, and it's about dinosaurs, which we all love. It's three people trapped and an amusement park gone. A I loaded with prehistoric animals and .

city crisis. The number two 的 wason who were going to talk about .

IT a minute， so sit says, okay, that sounds amazing. What's the bad news? I said said, the bad news is you .

don't own IT and we do.

And I said, so Stephen doesn't control IT, which means your first look with him disappears. But Stephen wants to make the movie at universal on and he said, how much time to have? I said twenty four hours.

And he asked what the deal was. I told him the deal that we were going to be partners with universal. Dollar for dollar.

And he got back to me about twelve hours later that were in. So this was all done under the total age of C. A. With cyan and speel organ Kennedy and Frank marcial, who help us with the budget. And IT was one of the premier packages we ever put together.

And we're gona talk a lot more about packages and everything you pioneer in the old world, the old hollywood, all these people would have been under contract with the studio and just paid employees, paid labor, which your asic park went on the Grace of billion dollars.

So actually, if you add all of them together, much more than that.

wow. And your team, the creative team, N C, A, A, kept fifty percent of that billion plus.

Well, the creative people at fifty, which remains.

we had five, right? You had ten percent.

Yeah, even though everyone tried IT was saying we never took ten percent, but they were all wrong.

So is my math right then that Stephen had about fifty percent of that and Michael had about fifty percent of that. So each then ended up with a quarter billion dollars from this franchise.

I don't know what they ended up with. They didn't have an equal split. okay? Stephen had more because as a director, you command more, but they both did very well. And as David brought up, if this was done under the old studios system, all of them would have been under contract to a different studio, and the odds of loan them out were new, and then the odds of getting this made outside the system would have been almost impossible.

And before we dive into this old system, that David going to take us to here, I just want to point out how unusual IT is. I mean, you represented Michael, and for years, you know he's sitting there with writers block and you're just get launched with them every week like coaching him along, trying to figure out what the next big thing is even though you he's your client and you're spending all this time in attention, but the agency business model is to get ten percent of what actors, directors, writers are creating. And if he's not creating anything, you're spending a ton of time with him as obviously client friend and as your belief in his future that sort of made this all possible.

Well, that's true. But I will say one thing about the agency business that is really not well known. Agents are depicted as money Robing as not loyal, aggressive, short sided sometimes.

But you know, the reality of IT is, I don't know many agents like that. The agents that I dealt with A, C, A, the agents that I competed against, were vigorously and ferociously loyal to their clients. A lot of them were in the same position.

I was with crying. There is zero chance that I would have let that guy down. none.

And I knew he was having a tough time. And I was my jo B2Be the re for him, period. Not a discussions issue.

Not a choice. Not an option. I had to be there, and I will tell, I tried some hockey things to get unstimulated. You know, i've brought on other people's ideas.

Sometimes i'd bring him an idea is so bad to try to get a truck, a lot of them, where he'd look at IT, say, what are you thinking? And I said, well, i'm thinking that maybe you'll think this is so bad that you could do something just a little bit Better. And Frankly, the agency, to their credit, went around telling everyone that crime was working on an origin inal.

And by the way, that was unequipped untrue. He was working on nothing. I mean, he could barely get out of bed in the morning.

He was really wiped out. He felt he just spent all his creative currency. So my job was to just back him up and stimulate him and the thinking that he could do that again.

You know, back when all these folks were under contract and really, I mean, reading about old hollywood and learning how the old studio system worked, to me, it's like a sports league. There were five teams, the major studios, than a couple independence, couple major miners. They were all sports team that had the owners back in new york and had the G.

M. In the manager with the studio bosses and then all the actors directors write. They were players.

They were like lebron James. They might be to pay. That's bad example, because the players make so much more money. Now.

N, F, L. Player in the seventies.

yeah, they played for the team. And if they didn't go out and play, they would get suspended.

I think that you could safely compare the studio system to today's ana film. And they had people that made a lot of money. They had artists that were getting, in their time, substantial sums of money, you know, the Douglas fairbanks, the mary pickford. Then, if you moved into the next era, the contract players to the Clark gabbles, the jim, my stewards, the Carry grants they were paid in those days, money that was unthinkable.

even if for the folks there was a large amount, IT was up front, right? They didn't get a share of the proceeds until who was the first to really get a growth proceeds deal.

Well, the first is the famous story of the movie wind chester seventy three, where lu went into the studio and suggested a lesser front money payment for a piece of the back. And prior to that, artists were paid what's called floats, which is a flat fee, and they didn't get a basic participation. And I think that what he did is he changed the entire fabric of the business.

And so that was Jimmy story in winchester, seventy three. And leu was his agent.

Yes, was his agent, which is funny, because then look one to the other side. And if you go all the way up to jurassic park, you know, he got stuck with participation. And I had a similar issue with leo and sit over back to the future .

where they were running the studio and by this point in history, lose original trick of, hey, let's get Jamie store cut in on the back and he's a partner in this movie, is going to participate from the outside. You would take what he did. And what C, A, A really did was multiple that over and over and over again, such that the talent was really participating in the upside. So then by the time you bring jurassic and you bring back to the future to lue when he's a studio head at universal, that's got to be kind of a wild full turn of events to really get the Better of that deal.

Well, IT was interesting. One of the things I said, the luu, when our director, bobs a mas, is a brilliant director, was going back for, back to the future two and three. And I wanted a larger participation for him. My opening line to do was, you cause this problem. I didn't go over a very wide by who was look, because from the .

outside of perspective, here's how I sort to see things. Lew was an agent. He was like gani, an skyWalker, right? Like he was like fighting for the artist to get way more the upside.

But then he went to the dark side, and he stop being an agents. And M. C.

A, his agency bought universal and always said that he's on the other side of the table as a studio boss. Now, from your perspective, turn stiff. The how did this happen?

He made a decision. Firstly, bought the pre one thousand hundred and forty eight paramon library for universal. And he made a decision basically that IT was Better economics on the other side of the deal.

Why take ten percent when you can have ninety? First he bought review television. Then he bought universal for a period by the weight. Lew is still .

in .

agent while .

I owned sion.

You know, i've always felt, and I still do, i'm really interested in dealing with conflicted people because if you have a conflict, in essence, you wanted to work out on both sides. So a lot of times i'll go to someone with a heavy conflict to this day to work out a problem.

I'm thinking of blue N M C A as sort of opening up a theme for artist, but then closing IT again. But maybe that's not totally accurate. How would you character is? Love them. And what he did with universal.

they gave participations out. They didn't stop IT. They negotiated hard and tough on their side, no different than we did on our side.

But they were sympathetic too. They didn't just say, look, we're not doing this. We're reversing at all.

And Frankly, S, C, A gained momentum in the eighties and early nineties. They didn't have a lot of choice because of the fifty top grossing directors. For example, in ninety, C A represented like forty five of them.

So IT was impossible. You couldn't say no. I remember when we signed mike nichols.

May he rest. He is a great director. I'll never forget a colly maid to me. He was getting two and hf million to direct. And when he became a cin of hours, we went to make a deal for him. I call them up, and I got him five million and he said, I don't understand.

That's not my Price and I said, well, IT is in the context of being A C, A, A client because five million was what the top directors made at that point in time. So I said, mike, top director, I said, if you want, i'm happy to take two and a half of them donated to charity. At the time, I was raising money for the U.

C, L. A hospital. We were going to rebuild IT. So I said, i'll be very happy to take that two and half million for the hospital. And he said, i'd love to do that, but i'm very pleased to have the full man.

Did he make a donation to the hospital?

At least he did. He made a small donation, was not to many, but he was very generous. He was a great man and a great director.

right? So let's go back to this era. Before you got into the business here, you mentioned you bought this pre hundred and forty eight g which was a genius move because you could then run these films on television, which was rapidly sort of for proferred around the U.

S. And make all this money on owning the rights to this catalogue they're playing. Meanwhile, M, C, A buys universal.

So you have one company there that's both an agency and the studio. Well, washington, D. C, of course, doesn't like this. And they use the same word that you did, which was monopoly. So the hammer comes down. And my understanding is M, C, A couldn't function as an agency anymore, right? That M, C, A universal turned into a peer studio.

Let me give you a sidebar of rumor who that most of us that were in the business would bet on. As a fact. Lue was the chief fund raiser for the democratic party.

In western. There are stories, glory that luu called one of the Kennedy brothers and suggest. That M, C, A, B broken up as a monopoly.

Why would he do that? Well.

was really if it's true, but IT makes a lot of sense because it's brilliant. Because what you didn't want was M, C, A to stay together as an agency and leverage him at universal. So by breaking up M, C, A, that whole company went into a group of tiny agencies, none of which could give him a problem.

Until we came along, we were his worst nightmare, because we created mca on steroid, and we would never sell any idea or client on package or naked to a studio ever, ever. So anything we did was prepackaged. We controlled all the elements, and our clients controlled their own destiny.

By control all the elements. You mean the script, the director, the stars.

everything? everything? IT was in our client best interest for us to go with a package and negotiate because the counter party, they are no choice so we could dictate terms. So Frankly, we illegally set Prices even though you're not supposed to Price said. We basically did .

IT because you owned the scarce commodity, which was the complete package and no one else had access to that. And then you would just go sell that one package.

That's right. So if you had stripes, or ghost pastors, or gandhi, or twins, or kindergarten cop, or any of the three hundred and fifty films that we package, twitty rain men go down a forever list. You're a choice.

You'd buy the package or we sell IT to somebody else. Because we viewed the studios as distribution entities, period. We didn't need them to tell our clients how to make the films.

Now we did need them to distribute and market. They were great at that. We never sold a single piece of material on its own, ever IT. All came wrapped up with elements.

Where did that insight come from? Because I know in the sort of P, C, A, A studio world, the talent agencies would represent the talent, and then the studios would do development. You know, they would buy the script and they would attach a director, and they would turn IT into a film, and then they would go cast the the actors. How did you sort of get the idea of, well, we could do that?

Well, the idea was pretty simple, Frankly, in that when we started in seventy four, we didn't have any clients. So all we had were relationships. So all we can do is put elements together and try to attach ourselves and to hang on to a bucking bronco.

And by doing that, and if we can hang on IT develop that as we took clients in, we'd surround them with elements because IT became very clear to us that clients were the creative force and they were the ones that we're gonna dictate. What was going to happen was kind of the same reason that I encouraged every one of the agency to read a lot of magazines. Now you can think of magazines today the way we did cause in the seventies, eighties, nineties and early two thousand magazines were vital part of the culture of the country.

They were the internet.

It's correct per internet. My thesis was that art directors of magazines and editors were always six months ahead. They had to be because they took three months to get a magazine out and a month to let IT sit on a newstands.

So they had to think six months in advance. So I urged everyone of the agency to read with a list of a hundred titles that they needed to look through every month. I subscribed two hundred magazines, and I didn't read them all, but I would sit in fun through them while I was on the phone.

So, you know, I would read things like golf digest, motor trend, automobiles, car driver. Why did I read those? I'll tell you why.

When I met paul newman, I actually had something to talk home about because paul newman loved cars. Now, could I talk for days now? But I had enough to get through an hour.

So whatever we read current events, you know, we read women's magazines like mccalls and red book and vogue and mary quire. Why did we look at this? Want to see what fashion looked like. If you want to talk to an actress, you've going to have some insight into look and feel on what people are thinking. IT doesn't mean what was always right, but IT gave us a firm overview of editorial process by people whose job IT was was the the the future you're in the business .

of being able to relate to people and quickly build strong trusted relationships .

and also get a sense of our cultures is going, you know, we got the account to do all the advertising for coca cola because we we're really culture mavens. We really had a sense of what the audiences wanted to say. And before we did this, there was this kind of unwritten rules that only buyers could do that, you know, studio executives and network executives. And my thesis was, I had a partner named bill habor, who was head of our television department.

He was one of your founding partners.

right? Yeah, Billy bor could read a screen, play a teleplay and give as good a notes as any executive at any television company. As a matter of fact, I could probably an argument, could probably do IT Better.

He was really good at IT. We put together show gn as a mini series. Everyone said bill and I were crazy that we'd lost our minds.

Who cares about the forest? And how do you make A T. V. Series about a bunch of asians and one? And well, IT was our point of view from everything we were reading that asia was becoming a very hot commodity in the seventies and eighties.

People were really interested in what was going on the rise of electronics. And electronics companies like SONY and moxie, a panax onic national. These were major players in our business developing hardware for all of the software that our clients were creating.

And those are the kinds of things we would think about. But moving back to coca cola, we weren't in the ad business, but we had a sense of what people wanted to watch. So I was a 的 Allen and company conference， and her baLance was on the board of coca cola, of course, the CEO and president of coca at the conference.

And we are having a coffee out on herb's porch and the both guys said they may. We're getting heard by pepsico. And bear in mind, in the eighties and nineties there was a book written called the cola wars where these guys were fighting like cats and dogs for market. sure.

We talked about all this on our work are serious. This is that you were talking with yeah so .

I said the done kill and Robert boys that, look, I think you guys are making a mistake with your advertising and they said, why and I said, what you're doing six or seven commercials a year I said, how do you run the same commercial on science field that you run on daytime and that you're run on in a late night? I said, there are all different demographics. What do you do on they said, well, that's interesting. Said, could you come to atlantic with some of your people? I said, yeah, you send a plane for IT.

A coa cola, historically is one of the most sought after advertising accounts in america. I mean, mean, eric, and you know, had this account and had to unlock for decades and decades and decades. They sell a peer commodity product that's differentiated by brand. They pour a ton of money into brand advertising.

Yeah, they were running a business that spent five to six hundred million a year on advertising worlwide. So I gathered ten of our agents, and I took them from different demographics and different departments. I had men, I had women. I had music agent, film agents, TV agents, I had a personal appearance agent, I had a book agent, and they did send the airport, and we flew to a lino, and they brought in all twelfth of their worldwide geographic division needs. They got them all there for an all day meeting.

What did staff that good? You told them like, hey, we're gonna do an ad pitch to coca cola.

Well, i'll tell you what they thought. Most of them thought I taken leave of my senses. How could we be in the advertising business? And a couple of them looked at me and said, wow, we can do this.

Why can't we do IT? But my point of view, eighty percent of our company thought there was something wrong with me that I probably had food points in ing or something that went to my head because he just didn't seem to equate to them. But to me, I did.

Because what do we do? We read material and try to tell a client like Michael carton and Stephen silver, do you make a movie about dinosaurs? Can we recommend that to dust n half? Can you make a movie? We think you should make a movie about an autistic guy, and tom cruce should be your brother.

We took the same positions at a biota. No one owns, creates a voter opinion. Look, you two guys look at something on T.

V. tonight. You have an opinion about IT when you're write more than you're wrong, that opinions are trusted opinion.

And we were right more than we were wrong collectively as a group. So we flew to atlanta. We SAT. We looked at every single commercial they'd ever done.

We listened to the complaints of the department adds geographically, and I said to them, give us ninety days and will be back here. And I knew that would take us two weeks, because already had the idea that I thought was gonna work. But I never like to over promise and over deliver.

I like to order, promise and over deliver. So about two weeks later, I called donkey. I said, we're coming back to adena.

I gonna pitch your idea. He said, you said you needed three months. I said, well, we kind of accelerated that. We got so excited and we drank a lot of coca cola.

Ah you did.

which cracked them up. So we flew in three weeks to the day after we met the first time, and we pitched a simple idea. We said, look for the same money or spending.

We're going to do thirty to forty commercials a year. They're all gonna be for different demographics, but it'll cost you the same as your seven commercials. We're gonna a do a mascot for you.

A bear turned .

out to be the polar bears still running. Twenty five years later. We are going to run your commercials like a real race. So first of the year, we're going to do a hopefulness february.

We're going to go into a valentine's day and love easter family, summer refreshment, fall back to school, thanksgiving family again, Christmas, polar bears. And they said, how do we know that's gonna work? And I said, you don't because we didn't.

They didn't. We just said, we believe IT let us try one flight, a commercials. And they said, how many do you want to do? I said forty and they said, you're crazy.

But if you want to do forty for the seven, the budget for seven, you got IT. So they asked us. Then they called back in backtrack. Cause mechanical been their agency for forty years.

And they said, what you can do, what's called a shootout and I shoot out, is where you come in and all the ad agencies pitch to the executives. And I said, we will do a shoot out if done. And Robert to attend the c fo. Dug, I vest attends because he is the keeper of the money.

You're head of marketing, Peter silly attends and three or four your other key executives attempt and we'll do IT and they said, okay and they set the date was said, i'll never forget this for eleven on o'clock on a weekday that I flew our team of five people in the night before we checked out the room, we were going to do IT in. We rehearsed what we were going to pitch, and we went for a very nice dinner. I bought everybody, new our money, closed, and we got up the next morning.

Never forget this. We went to the gym, we had a nice breakfast, and we walked in at a quarter to eleven and set down. And we looked, the part one .

would say it's a show of strength.

And at five to eleven, the macan people, there were thirty five of them drifted in, having just gotten off a six flight from new york. And I tell they looked like they were all in a blender. They kind of look like live smoothies.

They were wrinkled and ready and all screwed up. And nice people too. But whoever said to them to fly in the morning made a critical air anyways, they flip a coin, and they said they won. And we were hopeful that they would say what we thought they would, which is eight .

goes second.

because we wanted to go first and blow their doors.

of course.

and we did. They won and they said, will go second. And I said, great, will go first. And we went in and we presented thirty five ideas, and we acted them all out, and each one ran thirty seconds. And we did a crisp and clean with music, with expression, with enthusiasm.

I started IT, a guy who just passed when you lend fink and Shelly hawker on, who worked with us, win in and helped us. Then I remember, did a commercial about dog, and he barked like a dog. He got on the ground, and we had these guys, and I will never forget, I was sitting next to bill habor, but next to me was john donor from mccan erikson.

And then a guy who had been friends with donkey for thirty five years. They were drinking buddies. And this guy wrote donor a note, and I saw by accident that had said, worrell, and sure if we finished.

And then they came up, they were so bad that after seven, eight minutes of presentation, they SAT down. We got awarded the account. And of the thirty five commercials we presented, they approved every single one. wow.

And these commercials, am I understanding right, that coming into this, you know, you didn't have big name actors wanting to do commercials, you didn't have movie calib directors doing commercials. But one of your cases in the whole was, not only are we get to come for these great concepts, but we're gonna get R A S C A A talent to do this.

And we did. We got a lot of our top directors who were between movies to do the commercials.

paid them well. They made money. You made money code great.

Everybody was happy. But more importantly, you know, it's funding our competitors, put out all this press. C, A is gna use their clients to make commercials.

How stupid blob, a blog i'll never get. One of our clients, dc donor, who did superman call me up laughing. He said, I just read this article in variety that were all stupid for doing this.

He said, I just cashed my check. He says, on between movies, I couldn't be happier. I just wanted to know that we thought out of the box, nobody else did.

And when we did the commercials, I said, the Robert toe, I want you to premiere them like a movie, invite the press and run them all, because thirty five, thirty second commercials is less than twenty minutes. Any ano for the press. And the press we got was insane.

We've got to cover a time magazine, which was important at the time. We got a love letter in the new york times. We got unbelievable press, except for the advertising journals. shocking. Who said we were robbyn barrels?

I'm shocked.

shocked we were ruining the business. But here's the fact toy that is fascinating. This is prior to people knowing the word or its meaning.

Outsourcing mechanic ikon had three hundred human beings working on the coke account. We at six, and we added IT everything. We just didn't make them. But we hired a company called riom and hues to do the animation. They weren't on our payroll, but they did a great job.

right? This polar bears cost all out less than time.

Crews put IT that way. The polar bears, we did very reasonably, and we delivered thirty five commercials for the cost of seven. One quick side bar that will move on.

We sent the bills to the CFO, who was a friend of mine at the time, named dug I vest. And we sent a bill for a commercial called timeline that we made on an apple two week computer and black and White. And I just showed the timeline of coca cola at various times in history.

And we sent a bill, I think, for, as I recall, for like thirty five thousand dollars for a thirty second spot. And that was probably more than IT actually really cost on that computer. So they sent us a cheat for three and alf million dollars.

And I called up, I said, what is the three and five million for us as a bonus is, know, we thought you made a mistake on the invoice. No one's ever done a commercial for us for anything less than three and five million. So we just we didn't want to run out of money because we were a little shop.

And I said, dug, I hate to tell you this, i'm not gonna cash the check, but IT was thirty five grand for the commercial. He said, I can't believe you did that. That's the kind of stuff .

we did at wild. So we're talking about this point in history where you would already become this big successful agency. You are already representing these people branching out into things like try to take on cocks advertising. Can we hear the entrepreneur story from you of how C, A, A. Came to be in the first place because you really started with nothing like zero.

It's actually pretty simple. I'd try to give you the highlights. A group of us, there were probably fifteen Young agents that were worse, maybe twenty.

All in our twenty is and I was the assistant to the present at the time, bill harper, around the T. V. Talent department.

Ron mir was a first class talent agent. Rolen was a and micros forward TV packaging agents. And basically we noticed a disagreement philosophically with where they were taking the business.

And crazy as that sounds, C. A was born out of a bad staff meeting at way of morse, where the guy worked for, who is head of the television department. His name was sam boy's board announced with great pride and passion that he had signed an Miller.

We'll mean nothing to you too, Young guys. But he was a fifty song and dance queen and a broadway star. We said in a staff meeting we all SAT in the back. We weren't allowed to sit at the table because we weren't senior of.

And one of us is got up and said, look and Miller is a talented lady, but we should be signing bob redford and paul newman and dustin often and shaan cony in sydney porter, and we should be signing those people, not an Miller. This is where your morals we've been around since eighteen ninety eight. We're on the wrong track.

Well, the older guys went ballistic. You then saw a division at Williams s that never healed. And then they made a cardinal tactical error.

The head of the training department, the trained all of us, was the former roommate. The president sam washing's name was filled. Well, man, and he was a tough x marine drill surgeon, and he trained everybody.

And bottom line, they fired them, and he called us down. He was almost in tears. This was a guy that used to get up on the top of his, this screaming at us at the top of his lungs.

This was before people were woke. You know, this was like we were trained the old fashioned way. And we felt, my god, we were IT was debilitating ating to watch this.

This guy was destroyed. That was the beginning. At the end, we started talking.

All of us narrowed down to five people that we wanted to be in business together, and we made a decision to leave and set up our own business and do IT our way. That's IT. No more, no less complicated than that.

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To my mind, looking from the outside, you are on the beginning of C. A. And then everything that would become no doubt a absolutely essential and probably the primary ingredient was just all of you collectively and you personally just hear like raw ambition.

Certainly he had lots has been written about that. I'm wondering though too, is IT also fair to say that your background because most of not all of you came from television, was that kind of a secret weapon? Because packaging was more common in television, a and b. Television was still relatively new. Imagining most of the old people at W, M, A, and and then also in the studio business just weren't to ended to this new world, right?

No, actually, if it's a good question, but let me correct something. William morse was the top television packaging agency, and we all knew how to package television is very different than packaging movies because in television, the producer is a key element in, and movies is the director, and the director, actor and actors are cast in television. Prior to the eighties, one fading movie stars were brought into television.

But the thing about whether is they buy for cadet v and movies at a time when they were starting to come together, and that was a thesis, is that we didn't agree with. So that helped us leave. But IT was a different business at the time.

And will you more wanted to keep them separate? And we were asking the head of the amorous picture department and tell lish about to run joint meetings because people could work in both areas and they refuse to do IT. That was another nail in their coffin.

So when we started, we made a conscious decision to be TV only because by sag rules, they had to pay every thursday. And we started our business on one hundred thousand dollars, and we never went in to debt beyond that, paid that debt often six months and never Carry ten sense of debt ever. And the reason we didn't is our TV clients got paid every thursday.

So we took our commission. But in one thousand nine hundred and seventy eight, we made a decision that we needed to be in the movie business. And the only way we could do that was the dedicate agents to the movie business.

So we made a decision that I would start the movie business in seventy nine and the rest of the guys would stay in television. But that mike rose filled, who was in the movie divisionally immorals with me, would start a movie division at C. A.

Has the great insight because you could cash flow the business if your customers, your clients are getting paid every week. But it's pretty hard to run a business when you have know you want to raise any money if you're waiting one, two, three years for film projects to come together and then get paid on the backend after it's made create. Could I ask what was IT like to get your first big star? And what's the story of C. A, A sort of actually building a for reputable, enviable talent roster?

So there was a lawyer in century sitting in garry handler, and we moved into century city very early on. And I noticed his name on the placards in the lobby. I did a little homework and discovered that he quietly had a tax practice, and he represented every major movie star in the business. So I would decided to sign him as a quiet.

You signed the lawyer, a tax lawyer.

Yep, he was going to be my client. So I went up, knocked on the door, introduced myself, learned everything that I could about him, and then proceeded to become close friends with him. And he delivered strong .

cony to me. wow. azy.

And I will never forget talking to shaan one hundred and seventy nine. I grew up on bond. I remember a call bin said, I don't have a clue what to say home, and I was struggling for words, but I should have gotten academy award for best actor for that goal because I actually sounded like I knew what I was talking about, but I didn't. But I learned, I learned on the job. I've sure.

sans not a dumb guy, and he had been in the business forever, that why do you go with you like IT, there must have been some rational reason for doing that.

He went with us for only one reason. Gary handler told them we were Young, aggressive, hot and had good taste. And gerry hammer proved to be right.

We did an amazing job for cony. He had come off three really low, grow not so good movies, and we turned his career upside down. But after him does the hoffman signed with us, and just one after the other.

I will tell you a funny story. There was a literary agency, top literary agency, in Adams ray, and they had about four hundred of the greatest writers in television. Few feature writers, but mostly TV.

And Ricky was best friends with mike rosenfelt, one of our partners. And mike was desperate to merge with them. And I said, i'm happy. Entertain IT. So we had this meeting with the three atom's ray rosebird partners, sam Adams, record and thinking thing is lei rose, enberg and the five of us.

And we SAT in a little conference room, minor crummy little beverly hills office, which, by the way, was raided by sag, because the people that we leased from we're running a house civil were appeared out of IT, and the screen actors killed was going to yanko our a license. Little did we know well. So we got out of that mess, and we were sit in the comfort room.

And I will never forget this, rosenberg said, you know, we're going have the best television agency in history because we're never gonna a sign Robert redford or does than half manner any of these people. And this was before we signed shang honoring and around mire. And I looked at each other and my gross, we looked at them and I said, well, that's not true.

We're going to sign all those people yeah and they said, you're nuts. You're gonna sign any other so I said, well, we plan on signing every single one of them because we want a monopoly on talent. They give us leverage to turn the paradise around against the distributors.

And they said, that will never happen. I said, thank you. Meetings over, we're never going to emerge. And about six months later, we sign convery. And then every week we signed a famous movie star after that.

And didn't you take out an ad and variety announcing IT?

Yeah, thanks for reminding me. Then we took out these giant red ads and variety every friday, and the hollywood reporter on monday and IT said, sea is please announced the worldwide representation of Robert redford. Shan cony does than half in sydney brought to a, and we just went on and on. And every time we ran an add, I ripped one out of the variety, folded, IT up and mailed to danny an and IT got to be a stale joke after a couple years. Well.

this feels like a huge principle of yours. And C, A, A, which was really, strength leads to strength. IT, seems like you are always looking around and identifying what the new way that we've become more valuable and how we leverage that into the next thing. Can you talk about that and some of the other ways that you just by sheef force of will or by counter position against other agencies, how you were able to be different than everyone else around you and win?

Well, we were different for one solid basic reason, which is that we basically worked as a team. So if the two of you were clients of hours, you didn't have one agent. What we resented, IT, will Morris, IT one age and covered one client and you couldn't go anywhere with that because human nature is such that eventually there is a relationship problem.

That just is, the longer you're around someone, the more there's a relationship problem. So we went ahead and put teams on people. We had some clients that burn through three, four, five agents, but they never left us.

This man of fact, in a twenty five year period, I think we lost under five or six clients. We never lost clients because we had teams of people on them that they could relate to. No actor ever had a literary age.

We'd have a literary and an actor. Well, why would we do that? Well, I would be stupid not to.

Why wouldn't we? What is an actor do with? All they do is read scripts to see what they want to do. What is a literary agent to? All they do is read scripts to see what actors roles are available. So we were in a state of shock that actors in a literary agents, when we looked into IT, we are saying, wow, are we stupid or is everyone else stupid?

I mean, obviously you are were Young and aggressive and willing to think differently. But why was the competition so weak?

I don't think they were weak. I think they were very comfortable in the old shoes. They liked the one on one.

They coveted representation. Their meal ticket was their individual clients at C, A, your meal ticker was how well the whole company did. If the company didn't do well as a group, every individual suffered .

who own these competitors, like you said, you know, when C, A, A did well yet did well, like IT was a partnership. How were economic structure to other agencies?

They just made what they called market deals. So if you wanted to hire an agent, you try to pay them whatever they asked. That was a market deal.

And we did just the opposite. We paid very small front money and said at the end of the year, if we do great, we're going to overpay. We're going to pay you more than you can get elsewhere.

You know, we had a agent that was coherent of our movie department get offered a job by jeff ferget icm, who was a very good agent, and jeff invited him to a meeting. And the guy came in the sea and he said, what should I do? I'm just gonna turn IT down.

He said, absolutely not. Go take the meeting now, I had two things in my head when I told him that one, I wanted to know what they were going to be doing and what their thought process was going forward and on. I knew that he'd get that out of them.

But too, I knew he'd only offer him, and I wanted him to see what he could get elsewhere. I didn't tell that to him, so he went and took the meeting, and they were having a joy time until he came to cob. And I had instructed our guide asked for what he'd get paid. So the answer came, i'm going to pay you more than i'm making.

So the question is, what do you make?

And so jeff said, i'm going to pay you like you know a million a year or something. And the guy who took the meeting looked at them and said, that's very generous, but i'd have to be taking to seventy five percent payout to do that. And that worked for me at every level.

One IT was good for my guy to hear what he was worth in a competitor. Two, I love the competitor, knowing that a guy way beneath his station, he is making four times what he is making. And three, IT created A A loyalty factor for me.

And why were you able to just make so much at C, A, A, and Frankly, just overpay to keep people there, like what was IT structurally about C, A, A, where you were able to just run this incredible cash loan business?

Well, first, while we were accused constantly of taking cut commissions. And finally, people realized we couldn't be paying what we're paying to people if we were cutting commission. Secondly, we had a monopoly on the high and T, V and film business. So we were mainly money and we just paid IT out to our executives.

period. And as you're talking about all this, of course, a team oriented approach makes more sense than this individual lond wolf thing. But the trade offs s involved in every decision, and the tradeoffs involved in showing up to every means with five people and having a network of people surrounding every client is that you need just way more communication and way more structure and way more systems. What are some of the examples of the things that you put in place to actually make this work? Because I imagining you probably talked to like fifty people a day for fifteen years.

You're off by about a factor of five. So an average jian at our place would run two hundred to two hundred fifty phone calls today. Some were fifteen or twenty seconds.

So you got ta buy for kate. This interpret internet and post internet. So prema, we had a system that we developed that was fail safe. One, return all internal clients first. Two, you don't go home at night without returning every call.

And three, we had up what's called a bug slip system, which was everyone add bux slips, which were these pieces of kind of heavy paper that add your name on IT, and you'd write a note to an associate. And I would say ben spoke to score, recommended good fellows. Call me if questions that would get sent from my office to that person's office, to your office in real time.

He was our form of email. Then he had the answer me that he had read IT. So he strike IT out and answer IT send IT right back to me. So when score sizes called him, which he did, he'd say, fantastic, marti, I heard that Michael talk to a good dfl lows couldn't be happier about the decision. And then marty goes, while these guys are on their business.

is there archive of all .

these somewhere? Now they're all trashed. Oddly, we locked up our trash every night just, you know, because we found someone going through our trash, and that was really scared. Made a death, if you want to know the truth.

This add some color as to why the male room was so important when people say they started in the mail room. C, you are an essential part of the fabric of .

the system of the mailroom at our place was a fast track to a career if you could make IT through the mail room and the way we handed down clients. So if you guys were agents with us and if we signed a giant star, we brought in as part of the team, and if you are good, you made your own relationship.

well, that's the benefit of the team approach to ris. You could go out and sign, I don't know X, Y, Z, so it's very sexy, but then you could bring back in me in and then that probably let you go sign a lot more score sizes, right?

dave? A time was our enemy, so I needed a way to loosen myself up. So how would I do that? Well, i'd have people behind me working with clients that I signed. So we signed halfman patch ino in the arrow, which had never been done in history.

And they are known as leading men at the time, right? They were sort of competing, leading men.

Well, my thesis was they weren't compete if they were with us. I said, the dustin hofman helped me get the neural. He said, why? I said, because when you're rather, I told you what he's doing, then me not knowing, he said, well, that makes sense.

So we got to neural, you know. And then when I got both of them, I said to both of them, I want to sign out. And of course, they looked at me, what are you crazy? You ve got the tool of us.

And I said, no, i'm not. You can work with each other. And on top of IT, we all know everything and you're not really competing. Because at the end of the date, the director makes the decision, the agent doesn't make a decision. But we package the neuro and pacino with Michael man called a heat.

Yeah, you build all this up and then you make the pie bigger, everybody, by packaging.

Well, that would have never happened, would have never happened in on torture ables. They would have never gotten costner and cony in the same and andy, go see in the same movie. They were all clients of hours, and we wanted them to work together.

We were very family oriented business. We wanted our clients to work together. And IT worked for us economically.

and I worked for them. You took an aspect that people thought was a zero some game, and you made in a positive some game.

Our job was to create product for our clients, period. We have people dedicated that had no clients that were only involved in creating product that was their job. No agency did that. We also had fifteen readers on staff.

Michael, can you take us told the last few years of your time at C A. A. Now we talked about this period where you're citing your first clients.

You went on to represent forty five of the top fifty and hollywood talk about, you know you're four and advertising with coca cola. There's one of two little pieces of this chapter remaining. One is you kind of getting into investment banking and maybe I should pull kind of there.

You definitely turn C, A, A into an investment bank. And I think you are the top gross investment banker in the world the year that you did your first deal. And then the second I want to talk about when you explore universal and potentially becoming a studio head yourself.

So the first was a natural evolution of what we were doing. The studios were in trouble financially, and IT became very clear to me that they were going to need financing. And traditional financing wasn't gonna work.

Universal was under siege. People were taking stock positions. Corporate raters out of new york, columbia was in trouble.

Mgm was in trouble. Warners, believe or not, was in trouble. So I was very friendly with a brilliant guy name. Herbert Allen in herb was an investment banker, taught me a lot about the business. We used to spend a tonet time together.

And I got this idea that we could bring financing to save our marketplace because, Frankly, if any of those companies went not a business, so did we. I couldn't afford for universal or columbia mgr. Warners to shut down or to reduce the scope of their budgets.

C, A, A could put up a hundred million dollar budget for a movie you need to the studio to.

was worse than that. And we weren't allowed to produce. I had a White paper written by a the most prominent entertainment lawyer in the business at the time, Frank rothman, who was passed away, a great guy, and if you wrote a ten page opinion that we couldn't produce, because I wanted to go into that business with our directors and created directors company, but we didn't want to take on the guilt. Plus the rider skilled and director skilled were run by ca clients.

right? You'd be passing off your clients.

And we were settling strikes, bill labor and I settled one of the writer strikes in the eighties. We couldn't afford that back to the .

studio is being a financial trouble. literally. You have the reverse problem of they also went back in the day of, you now have the power on the cell side. You need fragmented buyers.

I needed people that are buyers with money, period. So I started building relationships in japan. First relationship by build was with the division of mass electric. And I hoped that I would be good enough in the meeting that the division would recommend to mosusa that they meet with me.

But before I got to that, I was representing people that were involved with SONY, and I got involved in the sale of cbs records to SONY and build a relationship with maria yoga, who was the number two at SONY, who ultimately introduced me to oko mara. And I became marita and August consultant. We consult IT on the sale of cbs records.

And then mister mara came to see me and wanted to buy getting into owning content because he was upset that beta max, which was a superior technology to V H S, was losing the V H S. He want to own a studio. So I started calling different entities that I thought made sense and brought maria into meetings.

And the first santilli called was kayan, who went mgm. And I had a meeting at my home one morning, late morning free lunch with oko mara, k. Korean and myself to discuss selling M, G, M, this zoning.

And mister moreto was a very clever guy, and we were a great team. He came with a box and he fucked in in the middle of the table, and kirk couldn't get his eye off that box. And halfway into the meeting, marto opened the box and he pulled IT out. And IT was a tiny little video camera, which was a prototype for a video tape recorder camera. And kirk was blown away by the fact that when more would take video of us in the room with natural light and play IT back through our TV set.

cook not see the and of Steve jobs putting an iphone on the table in two thousand five.

So maria just kept talking, and then kirk said, how do you want to a pay for this? And mario said, you know, we would finance IT through SONY and we have the cash. And then as the meeting ended, I could see that kirk was lost after this camera marita packed IT up, put IT under his arms and left power move.

And that was how we ended the meeting. Subsequently, I couldn't get traction with current. So herba. I started working on columbia, which coca and the rest is haythorn. We worked the deal and through a long process arranged to sell colombian and dry star two SONY. And that became .

SONY pictures, entertainment.

yes, and herbal. I did that deal with no one else, just the two of us. And IT became a template that he and I then did over and over again.

One of the economics look like when you arrange a deal of that, magnus de, do you agree up front to a fee? Do you say, hey, let's figure that out later? Do you agree to a fixed Price?

So I did something in those days that cannot be done today. And let's bear in mind, guys, this is thirty five years ago. I worked my tail, oh, t understand japanese culture.

And I read everything that was published. I studied the language. I studied the culture.

I studied the art. I studied how they treated people. I read everything under the sun that wasn't tack down.

There was a japanese american bookstore and rocket center. I was their biggest customer, and I took a shot at something which paid off for me in multiples. So all of the banks, excluding Allen and company and me, ask for a few letter up front.

We asked for nothing. We said, look, we do good job. You can pay us and have seen some of money. If we do a bad job, pays our expenses and we're all good.

You didn't specify what the absent sum of money was.

Now I remember in a meeting at mosusa in hawaii, they said, what fee do you want? I said, if i'm not successful, I just want my expenses. If i'm successful, I want you to load up a bring struck and back IT up to my house.

They got the picture by saying that we're saying, look, we want to exceed all fees ever paid, right? But we never put a number on the table. You know, I never once SAT a discussion with any of them about money, and I was paid for handsomely by everybody. So.

okay, we had to know what is the brink truck end up looking like for the SONY deal and then for later them at sush a deal.

I don't remember exactly what I got paid on the SONY deal, but I got paid twice because I got paid for the record deal, and then for the studio deal. On the mosusa deal, they gave me one hundred and twenty million dollars to pass out to all of the consultants. And I passed out money to everybody generously because we add washington lobbies.

We had P. R. People at Allen and company.

and this is to buy universal. Yeah.

was to buy M, C. A. Universal, which, by the way, I tried to buy for SONY, but you turn me down, said he never sell to the japanese. But when his stock went from sixty five to twenty, he changed his term.

And so matsui a is the parent company of panasonic. Is that right? The brand that americans would know and they ended up owning universal for was at ten years before IT sold to sea grams, then vvd than nbc.

They had a very bad experience with universal. So when I brought the C. E. O of mosusa to the universal lot, after the deal was consumated, I had had lunch with lu the day before and I said, when I said you are the greatest executive in our business, but once you sell this company, they're paying me to consult, and I want you to feel free to use me because I understand their mentality and their culture. And I said, with all the respect, you don't and I said, i'm here for you and a very awkward thing happened when I brought these guys to the gate, I dropped them off, and lue looked at me, shook their hands and turned his back on me and didn't invite me in.

Hm.

and that was the beginning of the end for him, because he didn't understand them and they couldn't communicate with him. He didn't understand how to deal with them. And four or five years afterwards, they called up and his contract was up.

And he insist ran universal like theyd owners, but they did. And they are smart guys, but they couldn't make the transition. And they didn't make the transition.

but clearly mean having read about him and even going back to the SONY corner, clearly, leon said, didn't want to be owd. They didn't .

want to be yond. They took the deal out of fear of losing the company. The value of the universal real estate was probably eighteen bucks a share, and their stock was going down to turning. wow. So IT was a no brainer, a no brainer for private equity firm.

And when these situations come up, IT just gotta hard to go. From entrepreneurs gul, self employed king of the world, to being an employee, IT just has to be an unbelievably heart transition.

I can't imagine how they did IT. I was always shocked that they were going to do IT, but I knew they didn't have an a choice. But moxi usha didn't want to rumble, lose feathers.

Because one thing the japanese companies are always also a sensitive to as politics, and leu was still very connected politically. One of the guys on the M. C.

A board was a gun, bob strives, who was head of the democratic national committee. They didn't want to mess around with this, so they called urban eye. We'd like to sell the company.

That was all they said. And the reason was they didn't want to try to negotiate with luo. They just put up the company for sale. And urban, I were working with that good band, Frankly, on trying to take over Warner brothers.

This was before the Warner brothers and time merger.

This was before got IT, and we had quietly accumulated fourteen percent of the stock through lawin and company for the profile family. And I met with Steve OS three weeks before he passed away. He was one of the greatest guys in history of the business, and he gave me three hours of his time where I came in and said that cigaret would put up six billion of cash with a standstill, and Steve assigned the deal to his deal maker. And then as he got sick, ker and the past away.

and i'll fell apart. Well, Michael, as we come up toward the end of your ten year here at caa, can you talk us through the generational transfer and the sale of the business to the next generation, the Young turks, and then your time at disney after that, how did that all come to be?

So I was pretty much hitting the end of mi useful life as an agent. I was about to turn fifty. I'd been working since i'm sixteen in the entertainment business first for lew.

right?

Universal was my first job tour guided universal studios, and I just didn't want to be in service anymore, want to try to run a public company for five years, and then, Frankly, thought about going into public service, not private service. And I was very friendly with Michael, and he was one of my closest friends. He had a heart attack in a query bypass.

Two of the board members started talking to me, and I spent a year talking to them on and off, on and off. And then round mirror blew up. He just lost IT.

He just couldn't be in service anymore. He just, he was over a fifty. He had hit a point where he just couldn't talk to clients.

I will never forget this. He had a conversation on a sunday that probably lasts six or seven hours with one of his clients that was so vester still one. And he finished the conversation, tried ever rest of his sunday, and slight called back, want to start the conversation all over again. And that's a little unusual, but not completely unusual.

That's within the realms of reality for agent.

Yeah in the entertainment business, IT is, yeah, look, actors are gypsies. They have no one to talk to accept their agent. So ron just couldn't deal.

And also, I had thought of a going M. C. A. And at the very last minute they tried to change the deal, and he became clear to me that egg wasn't in charge and just too many signs.

As a deal maker said to me, this isn't going to work. now. That was before ron decided to quit.

So I figured i'd stick IT out another year. And then afterwards, run had already made up his mind leave. And I should have realized he had two feed out the door when he left.

You just made me take the disney conversation more seriously. The board members that were friendly with me, one of the board members owned a boat with me. We were really tight.

And he said we wanted to come over and create the culture here that you had a ca, and Michael was sick. I wasn't supposed to work every day. I always like to say I am the greatest cure for heart disease.

Because when I came over as work, and seven days a week, fourteen hours a day, and he was supposed to work two days a week, and he started work in harder and harder, and his doctor was telling him not to. And IT just was very clear from the beginning IT just IT wasn't gonna a team effort for whatever reason, I threatened them, which shouldn't love, because I didn't want his job. I had a game plan for myself.

I didn't want a diet disney. I didn't want to die at ca. I want to try different things with my life, like what i'm doing now.

I love what i'm doing now. And all of the training I had as an agent has LED me to a career in the digital world is fantastic. Because what am I doing? I'm packaging. I'm putting Young founders together with money and distribution, and if nothing different than I did for thirty five years, it's all the same, said i'm doing IT with smarter 背包 and I really enjoy IT。 But when I got to disney was very clear there was a head ahead conflict and Michael undercut me every chance he could and after a couple years I just didn't want to deal with that anymore and its was one of those things we want to think .

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if the universal .

java had worked out if you're gone， the universal, do you think things would have played out different in the universal of very different company than disney? Much more peer play focused on content at the time, then disney was. Would that have been Better, different?

You know, David, i'm gn to tell you two things that both conflict with each other, because he asked a really smart question. Part of me thinks that I would have done an amazing job at building that business because when I went to disney, I put together seven initiatives that I wrote about in the book that would have made disney of fortune, starting with buying yahoo, buying cbs records for two billion dollars, which is worth ten times, twenty times out right now, buying a publishing company.

Instead of throwing money at a crappy publishing company that they had, I had a chance to buy from universal penguin putnam, which is now the biggest publishing company in the world. I won't done that in M. C.

A. Those other part of me said I would have failed at M. C, A, too, because the Brown man family would have never given me a free rain. And Frankly, i'm not a very good employee .

you would love wasn't .

in both yeah. I mean, I shared that with lew. My critique of lew goes for me. I'm a terrible employee.

I like to swing for the fence and I like to have autonomy and I don't like to answer to anybody and I was too thick head to see that clearly and only thought and retrospect. But I did the same thing looted. And I should have been more self actualized to understand that i'm not a follower.

I'm just not good at IT. And I have no problem admitting that now, but you know, hindi is twenty twenty vision and it's always easy to be a monday morning quarterback in the height of transitioning from sea to disney. I actually thought I made the right decision.

I was going place where the boards solicitating me. I'd had a years. We're the conversations at my best friend running at who had a heart attack to me.

IT was a no brainer. Five years there. Then I go into public service. I actually was on the council of form relations and was really interested in working at the state department in some way, shape or form. And I had a whole game plan, but, you know, the best plans of mice and men.

And reflecting back on that, having one of the world's best deal makers, both in hollywood and then proven in the corporate environment, that seems like a natural fit for the state department.

I felt really good about going into government service. I really did. And whether was a state department or something else, I would have felt really strong about doing that.

But look, I made a game plan for myself, just like I used to make for my clients, and I made a mistake, and I didn't take into consideration certain things that I should have. But at the end of the day, I worked out fine. I made a good settlement.

A disney made me comfortable. I took some time off, then went right back to work. And a guy, a mark, and reason or not, his partner been horse, kind of saved my skin. You know, they asked me to be on their board. And ninety nine, they gave me a road map .

at loud cloud. right?

Yes, i'd loud cloud. They gave me a roadmap to a new korea. And there are two of my favorite human beings on the planet.

There are smart as hell. They rival, cried in in elect. They are loyal. They are smart, they are wise, and they are true, true friends. And they beat me up pretty good, which is hard to do.

And they did IT brilliantly and set a path for me that changed my life yet again. I had a third career. So you wanna talk about lucky is guy on the planet.

You're talking to him. If you would ask me in ninety seven, if I was a lucky guy, I would say I was pretty stupid. But by ninety nine, these two guys came to the rescue and showed me another wait to use my skills set, which I do every day now. And weirdly, it's how I got to you guys. You got to me through mutuality of interest in the world of the internet.

Can we ask you what playbook from C. A, A, you learned that you brought to technology? What are some things that you're doing the same, or lessons you learned?

You know, it's funny. I had this conversation with a founder yesterday, Young founder that i'm investing in. I do not do one thing different today than I did thirty years ago.

Not one thing. I talk to guys, your age that are the talent. And I put them together with financing. So there are the buyer, and then I help them market monodist and strategize their product. It's the same thing I did.

So if dustin hofman says to me, i've got this idea, I want to play a woman and address who sees life as a man through a woman's eyes. And he's the motor. He's the talent.

It's my job to surround them with more talent, get a money, help a market strategize how to do IT and then monetize IT. So we make some money doing IT. I'm not doing anything different today.

It's just the companies come out public, but they don't come out on the film. No different. None, zero.

After you left C, A, A, the era was over. Then up, getting bought by private equity, the agency business. So at least R, S, from the outside, IT has been remade with W, M, E, and are a manual and Patriciate. If you had stayed at C, A, A, what would you have done there?

What could have made C, A A enduring franchise that became a gigg antic force, rather than sort of apexes as you exited?

So he was fun to add dinner with. Over a couple of weeks ago, we were, you know, he was a training at the agency and one of the best we ever had, I think he's done a fantastic job at building his business and diversifying IT. I spent a lot of time, which very few people know, looking into how I could diverse ve I C A.

Could I run at public? Could I sell IT a private equity? Could I buy an ad agency? And I looked at by jay walter Thompson, I looked bringing in private equity.

And at the end of the day, I didn't know how to divide IT up amongst players. I couldn't figure out how to get IT transitioned to a bigger entity. And all I said, well, yeah, Michael, you could have bought an ad agency and blown the company up.

But I said, I said, sorry, this was thirty years ago. Economics were different, public entities were different, private equity was different. IT just wasn't like IT is today, and I couldn't figure out I keep my core group and compensate them all.

And I decided was Better to make a clean break and try to do IT on my own in a different field. So how could I have been yet? I could have bought j.

Walter thomson. I would have gone into dead. I wouldn't have knowing how to give options in what to so many people at the agency. Because how do you tell a group that's for one, one for all, we're splitting all the proceeds and then go through what all these companies go through. How do you give options out to everybody.

right? Because there was you and your rounding partners primarily, that owned ninety plus percent of C. I.

A. No, we owe a hundred percent, okay? But there was no way to make everybody happy. And all I could see, Frankly, was the agency dissented rating.

And I like to think I made the right decision because unlike the decision, lu madd or mca is integrated. C A. Is still going strong today there without a great job in the core agency business.

They didn't expand IT beyond that. But that's okay. That's their provocative.

But I think the guys i've done a pretty good job. It's not what I would have done, but IT doesn't matter. It's not my company. But i'm still take pride that forty five years later, still in business, good for them.

I can't think of any other companies we've covered on the show in the two hundred plus that you really were a true family business. And I was a partnership. If there was an L L C.

believe me, if I could have split up the business and made IT bigger, I won't done IT. I said what you could have been a the biggest investment back as biggest gold monsarrat. And I reminded I couldn't have been cause a i'd have to compete with them and be they're in a fear business.

And that was the business I looking to get out of. And by the way, at that moment, i'll give you the kicker, which i've never said anybody, the thought of being in the client service business to big corporate clients with boy that showered my stomach because I had had enough of service. One thing about going to disney that I will say IT was positive. Man is easier to be a buyer because you just everyone's calling you to easier .

to be a buyer. Yeah, you created a lot of value and captured a lot of value in other scenarios. And at other points of SaaS life, you created a lot of value at the end and made a pretty sweet heart deal for the next generation that you sold the firm to. And at least my research found that you sold all of C, A, A to the next generation for two hundred million, which of course, they didn't have in cash, and they were able to pay you with the profits over the next and know, five or so years on an interest free loan that you effectively made them. And keep in mind, this is the business that has a enduring revenue stream of jurassic park and all these other franchise that have recurring revenue associated with.

I only cared about the business staying alive, and I felt that if I didn't do that, twenty people would peel off and do their own business. And I want of the franchise to stay alive. Frankly, I didn't care if I got paid immediately or five years down the road.

He made no difference to me. IT wasn't about that for me. I was very lucky. I made quite a bit of money as an agent. IT wasn't a driving force for me.

And I knew I had the disney thing lined up because that discussion contract with people realized had been going on for a year. IT wasn't fresh, so I knew I had that, and I was gonna get paid handsome way to go there because they had outlined a deal to me before Frank wells. He tried to get me to come over. I was closer to Frank wells that .

Michelle zena was, wow.

Frank wells was part of a travel Warners with Frank well, john kelan, ted ashly. So wells and ison wells wanted me to come and be the third part of the try vector because that worked for him for twenty years. So I knew what I was getting into and I knew money wasn't gonna be a problem.

Well, I call that IT for our storytelling and our analysis sections. Thank you so much for being here with us today.

My pleasure was really great. Create the time. Appreciate your homework, and I appreciate just being a part of what you're doing. I like what you're doing.

I'm glad to be a part of IT. Thank you.

mike. Thank you. I'll be shortly sending David a contract with my fee structure.

The brakes track is on rate.

All right, guys, take care yourself.

right? right? go. Thank you so much.

拜拜。

So fine listeners， thank you for joining us for the whole season. But Michael, what a privilege to have Michael a bit on the show.

I wish we could make this like a five hour episode. What does that we got to get Michael back for sure.

are we have to we also have to do some kind of like a quired bingo, where there's an Allen and company conference square, and we figured out how many episodes that come up on.

Here's the thing though, when are we gonna do a live show at sun valley .

that does feel like that's the cake topper? I think that looks .

make IT happen in .

twenty twenty two. Alright, new goal, right? All in the company. If you're listening, what to make that happen? Listeners, we want to wish you a happy holidays.

We want to say thank you for being with us this season. Thanks to the close to hundred thousand who joined this year or maybe over one hundred thousand of you who joined this year. Thanks to all the new folks who signed up for the L P feed.

L, P S. Of course we love L P S. They make the show possible. I'm saying this before the zoom call, but i'm sure we'd had a great L, P, zoom call for a everyone who can join before we left for the holidays and will be drop in some more fun, exclusive L P only content in the future.

For now, if you want to check out all fifty plus L P episodes that we've done that back, cat og is public, so go check IT out such acquired L P show. In any podcast player, you can join the slack. I acquire data m flash slack. You can get your dream job and acquire df m flash jobs. David.

there are so many slashes you really be create of our ency of test.

start to some packaging.

Well, Michael so would probably be stepped on his territory, but packed some startups in the acquired community. It's happened. IT happens in the acquired, like all the time.

IT totally has happened. People of mcc co founders in the lack, I know people have raise money .

in the slack to one hundred percent.

Very cool with that listeners. Thank you next year.

We'll see .

you next year. Easy you, easy you with that you who got the true.