Here is an excerpt from an interview of Michael Ovitz by Alison Beard for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
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As a cofounder of Creative Artists Agency, Ovitz revolutionized how big deals in film, TV, music, and corporate media were done from the 1970s through the 1990s. Following brief stints at Disney and his own mobile content start-up, he reset his career as an adviser in Silicon Valley.
In your memoir, Who Is Michael Ovitz?, you say that agents are first and foremost sellers—of themselves and their clients. What makes a good salesman?
Sales can be done aggressively—a constant barrage—or with thought, more elegantly. We tried to sell based on the quality of the client and to make the presentation softly. But we were aggressive in that we would never stop. We wouldn’t take no for an answer. Selling was easier for us than for others because we would only sign talent we really believed in for the long term.
But when you were just starting out, how did you sell yourselves to those quality clients?
It was an uphill fight. We were young, so we had to differentiate. We could not perform like traditional agents—fielding calls and trying to sell clients on jobs. Our thesis from day one was that we would take clients’ dreams and put the projects together.
The strategies you used to turn CAA into a powerhouse sparked resentment. People have called you a bully, a villain, and worse. If you could do it again, what would you do differently?
At the time I thought being vulnerable was a sign of weakness and that any weak link would affect the business. We were the ones who got stuff done, and that meant we sometimes ran a little rough over people. We always had to be moving forward and winning. We had to have 100% market share, the number one book, the number one movie, the number one TV show. I discovered after the fact that we could have gotten just as big and still let a few others take some wins.
But the tactics worked.
Really well. I remember when we sold ER to a very unwilling NBC. They didn’t like the pilot, so we manipulated everything we could to get it to work. We got Warner Brothers to push hard. We got Steven Spielberg and Michael Crichton to make calls. We pushed from every angle. We believed in the show. But we ran over a lot of people at NBC to do it. And there was a cost associated with it, which I personally paid and would have preferred not to.
In your book, you call out betrayals by former colleagues and friends: Jim Moloney, Michael Eisner, and Ron Meyer. Why rehash those stories now? Are you trying to learn from the experience? Help others to do so?
I’m telling a story about lessons learned: things done right and things done terribly wrong. Each of those relationships went wrong for a different reason. One stayed wrong. One ended because the individual passed away. And one came back to life, which is pleasing. I’m at a place in my life where I can look back. As an investor and a consultant in Silicon Valley, I’m meeting the most brilliant young people and trying to give them advice, and the lessons they like are about the mistakes I’ve made as much as the successes.
You’ve been involved in so many high-stakes negotiations. What’s the key to a successful outcome?
You need to know where you want to end up before you engage. At CAA we spent hours on prep work for the larger negotiations. We did studies, readouts, role-playing—everything we could. But even in the smallest negotiation, we always wanted to know how the meeting would end before we walked in the door. How do you manipulate the scene to get what you want for your client but leave something on the table for the other side so that when they walk away, they feel happy?
But if your counterparts have their own ideal outcome and it’s different from yours, how do you reach an agreement?
That’s the fun part of negotiating. We had different ways of handling that. Sometimes when we were on the buy side, putting together a TV show package, someone would come in and quote us a fee for an actor that was not in line with the budget, and we’d say, “There’s nothing to respond to. We’re going to recast.” One time an agent asked for a client fee that was double what ours were getting, and we said, “You’re under-asking. You should get five times our clients’ fees added together.” The agent understood, and when we were done laughing, we got down to making a serious deal.
But strong-arming was a tactic you used, too.
When we had leverage, we used it. Take Jurassic Park. That package was developed at CAA. Michael Crichton pitched me the story. I gave the book to Steven Spielberg. He said he was in. So was Kathleen Kennedy, a producer. We controlled all the elements. So we had the ability to go to the first studio and say, “We have good news and bad news. The good news is that we have a movie based on a book by Michael Crichton that will be a best seller. It will be directed by the great Steven Spielberg and produced by the great Kathy Kennedy. You need no stars. We have three young cast members. The bad news is that we and the clients control it.” We asked for a partnership deal in which clients and studios were paid the same, dollar for dollar, and said they had one day to come back to us. It was said nicely, but it was as strong-arm as you could be. If they said no, we already had it backed up and sold at another company.
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Here is a direct link to the complete article.
Alison Beard is a senior editor at Harvard Business Review.