How a Blue-Collar Kid Built the Most Powerful Agency in Hollywood | Michael Ovitz

27:08I said, well, you have something I'm interested in. He said, what? I said, Yahoo. He said, for what? Why? You're at Disney. I said, we should own Yahoo because we can put our characters up on the homepage. We can start delivering entertainment. It's the future. Wow. Streaming almost. And he said, I'll sell you my shares. I need to think about it. But he said, can you get me Ziff Davis? I said, Oliver, give me a day. I want to talk to Teddy. I said, we'll sell you Ziff Davis. But I'm not the principal, but I'm telling you, I'll kill myself to make this happen. So two things happened. I flew back to L.A.

27:55on an overnight flight. I was so excited, I didn't even change. I went right to the office. On the way to the office, I called Teddy. I said, I can sell Ziff. He said, what do you think you can get? I said, I think I can get us from$500 to$750 more than we paid. He said, if you can do that, sell it. You have my approval. But you can't close until it's a long-term gain. So from the car, I said, great. I got to the office. I went right into Eisner's office. He was sitting there. It was about 9 o 'clock. with one of our lead board members, Stanley Gold, and he, I said, Michael, you're not going to believe this.

28:42I couldn't say this over the phone because who knew who was listening. But I said, I can get us Yahoo, or half of it. And I said, it's for us. I said, it's the holy grail of starting a foundation in this revolution that's going to happen. And I'll never forget this as long as I live. He said, that's the dumbest idea I've ever heard. He said, everybody knows that the internet's for education and information, not for entertainment. Wow. And I said, well, I'm not sure everybody knows that, but I think a lot of people think that, and I respect your opinion. But this is going to cost us$250 million, maybe.

29:23Take it. I said, just inventory. Yeah, just take it. I said, we're making$4 billion a year in revenue. This is a rounding error. Right. And he said, no. and I walked out of there so upset. Was that personal or did he really believe this? I think I have no idea what it's thinking. Maybe a little not created. I'm into Hearson's right. Because like Bezos loves to say like there's a one-way door and a two-way door decision, right? This feels like a two-way door decision. You're wrong. There's no big deal. Dave, I couldn't tell you how this guy thought. I used to worship his creative abilities as an executive.

29:57You could count in those days the number of executives like Diller or Daily or me or Eisner that could read a script and think through, is there a movie? Can it be made for a price? And then also read a balance sheet. There were under 10 people in the business that could do that, creative end business. I mean, when Michael Crichton pitched me a story about in a Bel Air hotel at 8.30 in the morning about three people in an amusement park off the coast of South America, and this amusement park happens to breed prehistoric animals. Jurassic Park, wow. And I have to sit there and decide. Yeah. At CAA, we were buyers, not sellers, because we packaged everything.

30:47What do you mean you're not sellers? Meaning you guys bring it all together and then you sell the package? We put everything together. We took the studios out of the process of development. Yeah, well, I mean, you changed the entire leverage. leverage gave you. Let's talk about CA, because CA ultimately we did all this research. Let me finish this story because I left it hanging. I'm sitting there, Crichton's pitching me a line. I have to decide one. What's the line? The line is basically what I just said. Okay, just like this is it, there's going to be this part, the part, what do you think? Should I write it?

31:20I say to myself, am I going to... So it's just an idea he has. That's all he had was an idea. I said to myself, if I say to him, write it, he's going to take a long time to do it. Can it be made after he writes it? Who's going to make it? What's it going to cost? Is it cost prohibitive? Who can make dinosaurs at that time frame in the 90s look really real so that the audience doesn't think it's Godzilla with a zipper on the back? And is anyone going to go see it? this is all going through one part of my brain while i'm talking to him right all from a cocktail napkin that's the history of being an agent for us not for anybody else because we were the buyer because if we said we could make it like a studio executive did we just assumed someone would pay for it that was our assumption because the financial climate was so flush everyone needed product.

32:20So I said to Michael, write it. And six months later, he delivered the first draft of Jurassic Park. And I read it in one sitting or two. And I called him up. I said, this is the best thing you've ever done. I said, there's only one man in the world that can direct this movie and actually make it happen. And I said, it's Steven Spielberg. He said, I agree. and I called Stephen and I said, I've got, I need you to, he wasn't allowed to work at night. His wife wouldn't let him. They had a lot of kids. She was very grounded and grounded him. And I said, I need permission from Kate, who was also my client, to let you read tonight.

33:07I have something quite amazing. Even the fact that you knew how to say it to him, I need permission from Kate to let you read. Well, I, I. It's so important. He called me back. I asked her, she said, it's okay. I had the book hand-carried to him. I had to be very careful not to oversell it. Because the beginning of the book, you don't realize that you're getting an education as a paleontologist. It's pretty boring. There's nothing in it. There's nothing, no dinosaurs chewing people up in the first third of the book. You're getting an education subtly by Crichton that you don't realize. It gives you a foundation for being scared to death of these things.

33:48And he called me up like at 6.30 the next morning, said, I couldn't put it down, I'm in. Wow. There's no director that commits to a book without a script. And he said, I'm in. I said, are you in all the way? He said, yes. The guy had giant key honus. Wow. And we got a writer and we put it together and needless to say, it's one of the biggest hit franchises of all time. And for every one of those, how many are there that don't pay? Well, the movie business is like the tech business. You get one hit and it services 25 misses. And misses go, Dave, from big to small. Sometimes they're medium and they're okay.

34:31Bit of a power lock. Yeah. And we were very lucky. We did over 300 films. And they were all, in one way or another, successful. Wow. From things from small things like Stand By Me or Gandhi to big things like Ghostbusters and Stripes and Jurassic Park and Tootsie. I mean, the fact that you said Stand By Me is a small thing. Well, it was a tiny movie. Big impact. Big impact, yeah. I didn't put it together. Norman Lear paid$10 million to Rob Reiner to make it. Rob was my client forever and one of the great guys in the business. And they got turned down by every studio, so they had no distributors.

35:11so Norman was going to eat the money. Wow. So basically they knew I could sell it, so I put it on the back of Ghostbusters. So when I gave Ghostbusters to Columbia, to Frank Price who just passed away, we had this amazing relationship. I sold Frank Price stripes and Ghostbusters from a payphone at Paramount Pictures because they turned it down. They turned Ivan Reitman down with me in their office when he pitched them three guys running around Manhattan and they turned down Bill Murray in the army. Wow. And that's all we pitched them. Yeah, yeah. And I called Frank Price. I said, I now have the right to these two ideas.

35:57And he said, I'm in. And that's all I needed. There was no contract. There was no nothing. We made both. It was a handshake. It was a handshake. We got a CA. Yeah. In terms of becoming Michael Ovitz, right? Like you changed the entire power dynamic in the movie industry. Like, tell us about that. I mean, yeah, and start anywhere you want. But I mean, like, you know, we talked to all these people who read all these books. CAA is more than simply just another agency or a paradigm. It is. You changed it. I mean, frankly, you know, you were talking about Mark Andreessen, who I've had a chance to get to meet.

36:28Mark modeled Andreessen Horowitz around CAA. That business model, the way he thought about it. Walk us through, for example, first of all, why you decided to take the jump from William Morris to do it on your own. Because that was ballsy. Well, that was actually much simpler than one would think. There were weekly staff meetings at William Morris. They were an amazing business. they had a problem that all businesses have that some businesses handle better than others, which is they had a problem called succession. The older guys just didn't want to let go. And it's not an older guy's... Was that control?

37:10It was a control issue? Or was that they just didn't think they'd ever have to leave? No, no. It's they just didn't want to bring the young people up. and also they ran a business and it worked well for them. Everyone was a silo. And while I was working there, I was the assistant to the president, which was by design, I manipulated it. I knew as a mailroom guy, I went into the mailroom. I got the job on my own. I walked in off the street. I didn't know anybody. and I tried to do something arrogant and flamboyant to get their attention. I figured I had to do something theatrical. It's a theatrical agency.

37:54And I said to the HR guy, I said, I'd like to be in the training program. He said, it's three years. There's a waiting list a mile long. I said, look, I'll make you a deal. Let me in the training program. I'll learn everything there is to learn about the agency business in three months. If I can't, you have all my salary back. He said, I'm going to hire you. You're the most arrogant young guy. That's wonderful. We call it chutzpah. He can come on arrogance, but it's chutzpah. Yeah. He wasn't Jewish. Oh, yeah. Nothing to lose. His name was Chuck Booth. He was not Jewish. He said to me, you're in.

38:29So I started the next Monday. And it was so simple, frankly, guys. It was not complicated. You showed up early. You left late. Yeah. I mean, I got there at 7. Everyone else showed up at 9. I, they'd all leave at 6. I stayed till 10. Perfect. We would do the same thing. They couldn't understand it. And I realized that the president of the company went out every night with the founder for dinner at 6 o 'clock to the Hillcrest Country Club. And what I realized, because I stayed late reading everyone's files, that he came back to do his mail at 8 o 'clock. Yeah. And he was single. So I put a bunch of files on the front desk that he had to walk by every night.

39:13Like clockwork. I'd say four or five nights in, my phone rings at that desk at 9 o 'clock at night. Sam Weisbord here. I said, Michael Ovitz here, what can I do for you? He said, could you come into my office? I was there in a heartbeat. He said, I need X, Y, and Z. Can you get it for me? Never said, what are you doing there? He kind of knew what I was doing there. And the minute he did that, that was the beginning for me, because I knew I had a foothold. And I stayed there until midnight that night. He left at 11. I rearranged his refrigerator. I took his stock quotes, because in those days you had to write them down.

39:53You know what mimeographing is? It's so funny you guys don't know that. Pre-fax, you would type a stencil with a typewriter, and then you'd put it on a machine called a mimeograph, and you'd hand crank it and copies would come out. It was like a printing machine. So you'd mimeograph his stocks once a week and then you'd have to write in what they closed that. But they weren't real time, right? So it was like just the end of the day and then - It was the end of the day. Yeah, okay, right. They were real time for the day. Got it. He wasn't a trader. He just wanted to know how he did. Yeah. I did that.

40:31I rearranged his desk. I took calls that came in to him. Time is the enemy of every agent. I took calls and I handled them as a principal, having no idea what I was doing. But I took them off as an assistant. Just adding value. Just tons of value. That's gutsy. Yeah. It's one thing to rearrange his fridge. It's another thing to field the call. I mean, Michael Ovitz, the agent, even though the email is guy. Next thing I know, I get asked to be his assistant. Wow. I'm 22 years old. Incredible. And I'm sitting there in his office 12 hours a day. I have every piece of information flowing through that company, coming through him.

41:05in a company that's siloed. So I'm at the apex with him. I'm reading his mail. I'm taking care of everything for this guy. Everything. I made sure his car was clean. There was nothing in his life I didn't take care of. And he had an assistant for over 20 years. He moved her to a different place and put me at her desk. I'm sure she loved that. And within six months, he made me a full agent. and I did there what I did at CAA. I looked at the business and I said, what's a place that they're not generating income that they should be? And I found a niche that they missed, which was daytime television, which paid like clockwork huge volumes of money, daytime and late night.

41:56And for me, it spawned a run of selling dozens of game shows that yielded millions of dollars of commission 50 weeks a year not the normal 22 shows and it set me up for David Letterman and all the things I did later at CA where I created a slot for Letterman and did he know did the president know how great you were doing oh yeah no they he I was you were the guy the guy the young guy young guy because you're You still in your early 20s? And then I'm sitting in meetings listening to what's going on. And there was one meeting that I've written about, so I'll do it very quickly, that blew my doors off.

42:38It made me question what I was doing. I thought I'd run that company. That was my goal. And my boss, Sam, announced that he had just signed a woman named Ann Miller, who was a New York song and dance woman, who had no future. and our competitor had just signed Robert Redford and Paul Newman and George Roy Hill and every major person on the planet and they were killing it. And we're announcing as William Morris this 75-year-old company and Miller. And I walked out and I saw a bunch of young guys talking and we all looked at each other and we were all nauseous. That was the beginning of the end.

43:17Did you feel like that William Morris, they were becoming soft, dinosaur? William Morris, I would walk by a guy named Joe Rivkin's office who, sole job, because he was close to 70, would sit and read the newspaper every day, and we're all bleeding for time, right? And he's reading the Herald in the afternoon. They were just getting sloppy and lazy. Yeah, and then they hired a guy that used to be a big deal at MGM, and they would take care of older people, which we did too, but we did it differently. We didn't put them into operating positions. But your mind wasn't 100 % made up at that point. I remember something about learning a lesson about people aren't really out until they're out.

43:58Talk to us a bit about that, like how William Morris reacted. I spoke to this, and I wrote it in my book. They could have kept me, because I wasn't sure. You could have built what you didn't see at William Morris. If I thought I could change their mindset, and I was young enough to, they could have kept me. Did you remember that later in life when perhaps the tables were turned? What do you mean? Well, where you had to deal with the young up-and-comer whippersnappers. Oh yeah. Are you kidding? I never signed a client that I didn't turn over to someone. The success of CAA was in the thesis of one, everyone shared every piece of information.

44:37Two, you can't lie about anything. People in media all lie. The biggest lies are in the music business because it's part of their culture. They don't tell the truth. The second biggest lies are in the movie business because it takes two years to put a movie together. You've got tons of time to lie. And there's no lying in television because every Thursday something changes and SAG pays you. So by rules you get paid. No lying in TV. Hundreds of millions of dollars on handshakes. No lying, no lawsuits. You were being paid pretty well, I assume, in William Morris. No, I was being paid nothing. I remember.

45:11So the opportunity cost of you leaving to start CAA was very low. I did. Anywhere young guys. I generated multi-millions of commissions, and they gave me a$7 ,500 bonus. Boy, they really screwed it up. And I did the opposite at CA. We gave more money than anyone could get elsewhere by a factor of four. And it cost me, but, man, I slept well at night. And I'll tell you something that I told someone a couple months ago at dinner. at a business dinner, I said that we never had a contract with a client or an agent. I won. That's across all the CAA? Yeah. You never had a contract? No, because here's the thing about contracts.

45:58One, they're worthless. Two... Meaning you can't sue against them. Well, if you're an artist and you have a contract, you have outs. If you don't work for 90 days, the guilt lets you out. And secondly, my clients never knew they had a contract anniversary date to get pissed off about. The agency business is all about people, and people get angry if something doesn't work. And your contract was basically the fact that you were producing for them. That's the contract. But our goal was to deliver, not deliver hot air. Agents were phone order guys. My thesis was, I don't want a phone order. We'll give the orders.

46:34So we'll reverse the paradigm. Instead of fielding offers for clients, we're going to create things for them. I created a department that didn't do nothing but develop ideas. That's all we did. And then we started passing them out to clients. Wow, it's like Skunk Works at that company. It was... So rather than the studio saying, we need an actor for this, you go to the studios, you're like, no, no, no. This is what you're going to make, and here's the actor, and here's the director. And here's the director, and here's the producer. Well, we had so many great, talented clients that it seemed to me to be stupid to be selling them.

47:10Plus, I made a rule. We based the company as a literary agency. So all the talent agencies said talent agency. We said at the top of ours, literary and talent agency. I wanted everyone to think we were word-based. So we started with about 400 writers. We kept signing writers. And what I realized was the directors and the actors all wanted the same thing, written words. You can't make anything without it. You can't even budget it. You can't do anything. So we started becoming a literary agency at the beginning, and actors then came to us. The goal from day one was to reverse the flow. So it's kind of like when you run out of gas and you stick a hose in a tank, and you suck the hose, and all the gas comes out.

48:04So in seven years, we went from salespeople to buyers. And the economy was so good, I realized we didn't need any money. We could speak for the buyers because they needed the product. So I remember in the early 80s, I had dinner the other night, and I was seated next to Lorne Michael, who was one of the greats. And when I was a kid, Lorne and I started together. So we were reminiscing about the early 70s. Good Canadian guy like us. Great guy. And we were, he says about like he does. So we were reminiscing about the old days in the 70s, that's 50 years ago. And Lauren and I were just laughing so hard.

48:45And Mike Cavanaugh, who now runs NBC, was there. And we were laughing how I used to come in my suit as an agent and I was a nothing. And Lauren was a nothing producer. And I used to cover the shows. And we were laughing about the fact that when he started Saturday Night Live, it was not a hit. And I said to myself, I watched it, and I'll never forget this as long as I live, I'm watching it in bed with my wife. It's on at 1130. And I go to her, I go, oh my God, this is kinda scripted, kinda not scripted, and it's brilliant. The next day I went out, I signed everyone in the cast. Wow. And I started.

49:31Yeah, yeah. Bill Murray, John Belushi, Dan Aykroyd, who I love to this day, Gilda Radner, Chevy Chase, everybody. And this is like some upstart at the time, right? Yeah, this is an upstart. They weren't a hit. Right, yeah. So it was a massive risk. I got an article written in the New York Times, one of many, or LA Times, I don't remember which, saying I was an idiot. It may have been variety, that I signed all these unknowns, telling them I put them in movies. What am I going to do with them? And I, it's part of my upbringing being Jewish. I'm sensing a theme, like when the world says Michael Lovitz is an idiot, bye.

50:15You tell me I can't do something. Yeah. That is a challenge to me. Tamara said to me, we were in Paris three months ago, and we passed by this boutique. She said, I've been trying to get one of those things and I can't get it. It's been a year. I challenge you to get it. She knew exactly what she was doing. And I delivered it three days ago. He did? Amazing. Who was your first client? If you, sorry? Who was your first client? Very first client? Like you leave this thing, you're like, you got to first find another. It's a very prescient question because it's what led me to Saturday Night Live. i'm watching the loman and barclay show a local la show at 11 30 on a saturday night okay and i see a guy who's calls himself the roller skating rabbi oh my god and his name was barry levinson okay and i went and called him the next day said you don't know me i don't know you i think you're freaking hysterical and i signed him as a writer actor barry levinson when he won the academy award for Rain Man thanked me and recalled that moment.

51:28Wow. And Dustin Hoffman also won the Academy Award, who also was a client and also thanked you. Is he one of your first, Raymond? Levenson. Yeah, Levenson, yeah. Hoffman and Connery were my two first movie stars. Wow. And I spoke at Sean's Memorial in Edinburgh a year ago. It was very... Wait, Dustin Hoffman was one of your first clients? Yeah, I met him at a... I met him at a guy's house named Mike Medavoy, who I quite like, who was running one of the movie companies. And I went to a dinner. I was a young guy with nothing. We had started CAA. I think I was 27 or 8. And Dustin was there. And I got friendly, talking to his wife, who was a lawyer.

52:14And I started talking to Dustin. And I asked if we could have a meeting. Was there a spark? Oh, please. The guy's genius. You just saw it right away. Guy's a genius. Guy turns himself. He's a chameleon. He can be anything. And he was already, he was on, he'd already done a Mike Nichols movie. Okay. So it's not like I was discovering anybody. I mean, please, he had done The Graduate. Yeah, yeah. So he was as important as you could be. He beat out 100 actors for that role. Anyways, I sat with him and I said, look, I don't have the portfolio that these other companies have. I don't have big movie stars.

52:56I will kill for you. The whole company will get behind you. There were probably 30 of us. I said, but most importantly, I will work for free. He said, what? I said, yeah, no commission unless I deliver a movie to you and unless you think I did a good job. Your decision, I don't want anything. And he said, okay. I mean, how does William Morris even compete with that type of offer? So I mean, that's what the pitch was. And we had an amazing run together. And I put Tootsie together. And that was your first package, right? Where you bring it all together. It was one of them. We had a lot. But it was one of them.

53:36I mean, it reminds me, one of the best quotes I heard about you was from probably one of the greats of all times, Jerry Seinfeld, where he's like, I have a 95 ovates. They don't make them like that anymore. So I just ran into him at a dinner. We were having lunch at a place called Coco's, and Jerry was sitting at the next table, and Jessica, and she kept texting me because I had sat next to her at a dinner party. And I am trying to not be impolite, and I thought she was at home. And then I hear, Ovid! Ovid! And I turn, look over, and Jerry and Jessica are sitting at the next table with a bunch of people.

54:16And I said, Jerry, to this day, I never forgot. Because he had another line. When I left, he said, I got the last Novitz. And he reminded me of it at that time. Great guy. There's a story that Dave told me over dinner last night about a particular writer who came to me with in New York who didn't want to sign, but he allowed you to call him every Thursday? There wasn't a writer. So it was a writer's agent. Tell me about that. So there was a guy who passed away a couple years ago named Mort Janklow. He was a lawyer and built a business in the 70s of representing all the authors to the publishers.

54:55And as you know, New York is where all the center of publishing in the world. And he built this extraordinary business. He had everybody. Everybody. Sidney Sheldon, Judith Krantz, all the pulp writers. Michael Crichton. Oh, wow. And he had an amazing business. And I went to see him. And he was just very sweet but incredibly dismissive of me. And as I'm leaving, when I walk... Any reason why he was dismissive of you? Yeah, because I was a Zippo nothing. Okay. And if you're not something in entertainment... You're nothing. It's why it was shocking to people when I said we don't lie. And I fired people for lying.

55:42I fired an agent when I walked into her office, and her back was to me, and she was facing the window. And I heard her bold-faced lie to a client on the phone. And I fired her right there. I had them walked out of the building. We don't lie. And I said to Mord, first of all, when I went into a meeting in those days, I took my watch off. I put it on the table. I asked for 15 minutes, oh, 10 minutes. And I watched the watch, and at 10 minutes, I left. no matter what unless they respectful yes because no one has time so my 10 minutes was up with mort i said mort i'm i'm gonna convince you and i'm gonna call you every thursday at 10 o 'clock new york time hell or high water and for 11 and a half months i called more jank low at 7 a.m la time it didn't matter where i was didn't matter if i was with my kids didn't matter if I was at a school function.

56:41Didn't matter if I was in Europe. At 7 a.m. on Thursdays, I called Mort, including Christmas week, Thanksgiving week. Thanksgivings on Thursdays, I called Mort. That's 50 phone calls. Every week. Finally, in the 51st week, Mort calls me and he said, you are amusing. He said, and you're diligent and you're crazy. I'm going to give you a book to represent. I said, that's all I've ever asked for. He sends me a book. It's called Chiefs. And I give it to Bill Haber, who was my partner, who was a brilliant guy. He was as good as any studio executive at analyzing a piece of material. He reads the book.

57:23I read the book. We talk about it. We discover the book's been saturated through the system. Everyone's turned it down. And Bill and I sit down, what are we going to do here? This is your shot. And we said, we have no choice but to package something that everyone's going to change their mind on. We did it. We put Charlton Heston in it, who was big at the time. We put a director in it who was a big TV director who was Bill's client. And we went back and we got a deal from NBC for a six-part miniseries. And I called Morton. He was in a state of shock. I said, Mort, we have an offer on Chiefs. He said, no, you don't.

58:00It's not possible. I was turned down by everybody. I said, Mort, send in that money your way. We got every book from him to this day. Yeah, but while you're calling him, was he like, Michael, stop calling me. I mean, these are 50 phone calls later. No, no, no. Because he probably respected the hustle idea, right? He was moved by it. Yeah, he was moved by it. We became thick as thieves. Sure, I forgot. Let me tell you what I did for him. Our competitor, ICM, had a genius bookie. Just to set the stage, so the biggest one at the time was William Morris, and then ICM, and then CAA. Is that... No, we weren't even in the three.

58:36You weren't in top three at this point? No. Not even close. There were 10 other agents. Okay, so you were the long tail. Yeah. So, there was a woman named... A woman who worked at ICM, who was an amazing agent, book agent. and she her name was Lynn and Nesbitt she was top of the line at giving Mort a lot of competition so I called her up, asked her for lunch of course she said yes took her out to lunch and by the end of lunch convinced her that she should leave ICM and merge with Mort Cenglow I had never talked to Mort I leave lunch, I get in my car. I had one of the first car phones. It was a radio phone.

59:27Cool. And it had a big giant radio in the trunk. Cool. What kind of car was it? Do you remember what the kind of car it was? Yeah, we all had Jaguars. Jaguar was the thing. Couldn't afford them. Got Jaguars intentionally. Put CA on the license plates to tell everybody that we'd made it. It was bullshit. It was a CA1, CA2 kind of thing? No, no. It had our initial. Okay, got it. And we did that to show people how much money we had. We had none. Fake it till you make it. We faked it good. I called Mort. I said, Mort, I've got a great idea for you. He said, what? I said, who's your biggest competition?

59:59He said, hands down, Lynn Nesbitt. I said, let's put you two together. He said, why? I said, because she's going to merge with you. He said, it'll never happen. I said, let's just have lunch. He said, great. So I go to New York. I take the two of them to lunch. They hit it off great. Three weeks later, she quit, joined, it's now Cenk, Chloe and Nesbitt, still to this day, 35 years later. Wow. They were a powerhouse, and they were our powerhouse. Right. And you put it together. Put it together. And they both know you put it together. You know, Harley, I'm going to explain something. I package anything I see.

1:00:37Doesn't matter what it is. Doesn't matter. I'd package you two guys together if I thought you had rapport. I try to put people and ideas and money together, and that's what Horowitz and Andreessen said to me. Get to the Valley, because that's what we do. And when I did the Fortune interview, I said, they said, how did you do this? I said, I started over. I did 400 meetings in my first 12 months. I met with everyone from Zuckerberg to young people you've never heard of. Mark put dinner parties together for me where I met Peter Thiel, who I'm still friends with, Reid Hoffman, everybody. And I introduced myself to that community with no ego at all.

1:01:17And the nice thing about it is it was very different than entertainment. It was substantive. Those people do something. Entertainment people, and I say this openly to anyone, the top 10 % of the entertainment business, some of the smartest, most creative human beings you've ever met, bottom 10%, some of the sleaziest, and the rest roll between the top and the bottom. In the Valley, as you know, because you started a business, you gotta be pretty good. Yeah. You get called out. The barrier, the floor is much higher. You get called out really fast. So for me, I went up there with no ego, no games, no manipulation, none of the tools of the trade of being an agent.

1:02:07Not selling anybody anything except myself. And relationship. And I spent years doing things for people for nothing. Can you learn that? Like, is that your, I mean, clearly your superpower is spotting talent and packaging it together. I want to stop you, dude. I don't think I have any superpower. Interesting. And I'll tell you something else that I think I'm very open about this. Yeah. I said it at the Fortune, I was sitting at another Patrick O'Shaughnessy's podcast. I have no talent. So I can't paint. No talent. I can't paint, can't sculpt, can't write, can't direct. I'm a terrible actor. I left multiple sets I was asked to come on and I'm scared to death of a camera.

1:02:46I have no talent, so I can't code. So all I can do is put things together. I'll tell you what one talent I have. I have some weird God-given gift to meet interesting people and decide if they're worthy of my time. And I'm never wrong, ever. Maybe that's taste. No, I don't think it's taste because I had to learn taste. When you're 17 and you've never seen a painting, and you don't know Picasso from Modigliani, you don't have any taste. My first apartment when I was a kid had all Mediterranean-style furniture from a local junkyard. If you walk, if I looked at it today, I'd throw up. But I learned to have taste.

1:03:38I learned to look at art. I learned pattern recognition. I learned, it's funny. I mentor a bunch of young people, collectors. They all want to know what to read. I say, nothing. Just start looking at images, and your brain will index it for you. You'll see what you like. But I have no talent. I can't do anything. I can't do anything productive or something that I can get paid for. My friend, the artist Cecily Brown, she said, I was in her studio once and she I said it's so amazing out of nothing a blank canvas comes something that's so moving she says oh you could do that I said no I really can she handed me a brush she said lower left hand corner so I put a few strokes in she said that's good I bought the painting about a year ago she had a show at the Dallas Museum of Fine Art opened her show, my painting was in the show.

1:04:42And I loved the fact she did it. And then I had my lawyer send her a letter telling her that I was the co-owner of that painting, co-creator of that painting. I was going to sue her. Which was a joke. Of course, of course. But I don't have the ability to do that. And I respect that of people. I was on the phone with this young artist, Nicholas Partey, and he's so full of ideas and he thinks in color and thinks three-dimensional. I don't think like that. I think linear or circular. So there's no middle ground for me. And yet you earn their trust immediately, which is hard to do. Which even in itself is a bit of a superpower.

1:05:27Of course it is. This ability to create these relationships, to cultivate relationships. Even just the people I've talked to about you in the last 24 hours, they have a connection to you that is so much deeper than just someone they met at Sun Valley. There's something incredible about that. That is a superpower. I'll tell you something interesting. I said a friend of mine, a fantastic guy, got sued by a woman that claims that 35 years ago he ruined her career. That wasn't sexual harassment. He ruined her career. He blocked her from growth. 35 years later, I got so upset that I went full speed into action on this.

1:06:23And he said to me, he said, you know, the interesting thing about you is you're black and white. You're the world's greatest friend and the world's worst enemy. And that's me. I mean, that's the Paul Newman quote, right? Your mother, Teresa, and you're a barracuda. When you look at business today, relative to business in the 80s and the 90s, and frankly, even earlier than that, do you think it's really changed? I mean, obviously, technology is different. We have new tools. But do you think at the fundamental core of business and entrepreneurship, the lessons and the strategies you used are the same?

1:06:57I think that the world that you and I live in today, which is based in Palo Alto in San Francisco has basically because of the closed mindedness of the media world in 1992 I was a consultant Andy Grove at Intel and helped him with his marketing I don't know if you remember Intel Intel inside also Andy Grove's book is one of my favorite books so he asked me to write an endorsement for it on the back cover I respected that man enormously, and it was a different world. High output management, is that right? Sorry? It was called high output management, I think. No, I think his was only the paranoid survivor.

1:07:40Oh, so there's two books. There's also high output management, too. But anyways, we decided to do the CA Intel Media Lab in our building in Beverly Hills. And this was early 90s. And the goal was for Andy's company and our company, again, for CAA to be thought leaders and explain what was coming down the pike to the city. Because I remember I hired the CFO of AT &T to come work at CAA, and everyone thought I'd lost my mind. Not only did I not lose my mind, the guy was like a seeing eye dog to what was going on in tech. And Andy and I, Andy brought every conceivable piece of hardware made, every chip, every piece of technology from San Francisco and Palo Alto and placed it in a room in our office and put five giant dishes on the roof.

1:08:49and we invited the city, not just our clients, which, by the way, put us in a position over every other agency because everyone wanted to be with us because we're doing cutting-edge things. For sure. The business rejected the ideas. And today, Netflix, basically under Ted Sarandos, has disintermediated the business. They've changed viewer patterns, which people thought was not possible to do. They've taken the theater business away except for special movies. The experience is in home. Everything's a flat fee and everything's on streaming. You could have done the 92. And we started that. And there's no, we didn't start that.

1:09:35We started trying to educate people. They didn't want to hear it. What was it? It was like antibodies of the company? No, it's a closed ecosystem. They didn't want outsiders. No, and the thing I learned when I started at the floor as a mailroom guy in technology in 1999 was multiple things. One, they didn't eat well. So I'd go to board meetings at Loud Cloud with Ben and Mark and bitch about the food because it was awful. Two, they didn't dress, so I'm wearing a suit. And they finally said, if you come in a suit again, we're going to kick you off the board. and three they love learning and they're open if you've got an idea they want to hear it doesn't matter who you are what your last day is where you come from idea stands on merit they don't care and the nepotism thing doesn't exist well yeah for sure have the incumbents learned their lesson like do you think that that complete upending of the business by netflix and others has made it so today's incumbents are just so much more sensitive to disruption i get a call a day from people that I used to deal with that are beside themselves.

1:10:41There's no back-end participation in the entertainment business anymore. It's over. You don't get anything. If I package, when we put Jurassic Park out, we got Universal to distribute it because they didn't own it. We did. Crichton gave me the book. We owned it on behalf of Crichton. And when we got Universal to distribute it, we made a deal that was very simple. put up the money for the movie which was about 60 million bucks and every dollar that comes in after you get your 60 back comes half to us half to that to you that was unheard of okay and i'd say a couple billion dollars in profits have been made by our clients if you did that movie today yeah those same clients maybe would have gotten front fees from netflix or hulu or disney of maybe 150, 200 million bucks, that's it.

1:11:37There's no place to sell the product. Once it's in the ether. It's there. It's there. He can pull it. His kids can pull it off the internet. It's over. There's no videocassette. There's no HBO. There's no ABC, NBC, or CBS. There's no foreign. There's no Canal Plus in France. No Sky. It's over. There's nothing. So I get these calls that are nauseating. I feel horrible for these people. I don't know. So you kind of saw this coming. Well, that's why I got out. Everyone says, why'd you get out? I said, it's simple. I saw the train wreck coming. I probably got out five years too early, but I don't care.

1:12:20The train wreck was on the way. And those businesses are all in trouble. So what's the solution? I mean, if people want to be entertained, the entertainers need to get paid. Like, how does it work? It's another podcast. Yeah. I want to ask something, because we already talked of your time here. Two things. First of all, we mentioned, you know, the Bronfman family. One of the things Charles Bronfman told Dave and I is, you have to be careful about picking your industry. Because an industry that may have been good previously doesn't mean it's going to be always going to be good. And this idea of actually looking at whether or not the thing you're betting on is going to have continuity or not, I think is really interesting.

1:12:55I mean, if you wanted to stay in the traditional entertainment industry, you no longer have a business today. Well, it's interesting that he said that, and he's a very smart guy. I knew his brother. Edgar. Well, no, Charles. Charles' brother was Edgar Sr. Yeah, Edgar Sr. I'm thinking Edgar Jr. Yeah, definitely. He was a very nice guy, who I went to. Never met him in my life, ever. Oh. My dad was turning 65. He had worked for Seagram's for 35 years, and they were going to retire him. And I went to Edgar Jr. I called him up. I said, you don't know me. I don't know you. I would like 10 minutes of your time.

1:13:38He said, of course. I went, put my watch down on his desk. I said, Edgar, my dad's worked for you. He said, I looked at the file. I said, if you retire him, he's going to die. I believe that, by the way. I believe if you retire, you die. As a man or a woman, I think you're, if you don't have something to get up for in the morning, it's over. And I said to him, I'm asking you as a personal favor and I will owe you for the rest of my life. I'd like you to keep my dad on until he drops and I'll reimburse you his salary. Wow. And if you do that, I'm indebted to you forever. and he said, consider it done and you don't have to reimburse me.

1:14:21And my dad stayed with him for another 16 years. Wow. And I ended up representing Edgar in buying Universal from Matsushita because I had sold Universal to Matsushita. So it shows you how life moves in mysterious ways. There's almost karma there. What Charles said is interesting. I didn't go into the entertainment because I loved entertainment. I went in because there were only two places to make money when I was a kid. And I didn't want to live in the San Fernando Valley as an adult. And that's a big motivator. And the only two places you could make any money in those days, in the 60s, was the entertainment business and being in the finance world.

1:15:07Wall Street. Wall Street. That was it. And I was too stupid at the time, and I mean stupid, because I live here now and I switched my ratio between LA and New York. And I just love it. I've always come here half the year. I love being a citizen here. There's something electric about it. I get up in the morning and I take my dog for a walk at 6.30 in the morning and I feel alive here. And I didn't want to go to New York when I was 21. I didn't want to leave LA. I thought LA was the center of the world because that's how I was brought up. My dad thought it was. My mom thought it was. You didn't know otherwise.

1:15:51All my friends were there. My relatives were there. And I didn't figure this out until later in my life at CA that New York is the... When I went on the board of MoMA, I figured it out. That's when it worked. And when we gave that trustee party I was talking about, I told the story of going to MoMA at 18. And David Rockefeller's son was there, because he's a trustee, and he kind of welled up because I said that David kind of took the kid out of the valley and gave me an opportunity that I never would have had. And it was such an amazing thing to go to my first MoMA board meeting, knowing that it's where I discovered art at 18.

1:16:39Now I own a lot of art, and there's not a day that goes by that I'm not invested in looking at art, because it's my form of relaxation. You know, last thing before we close, David and I often talk about that us as Jewish entrepreneurs, we stand on the shoulders of giants like you. as we kind of hear your story, my final sort of note that I took for last night was there is one particular theme that keeps coming up across everything from the mailroom to CAA to you going to the Valley, which is there's a work ethic that you have. You arriving early, staying late, cleaning the refrigerator. Dave and I, we're not, you know, our IQs are not, you know, we're not the smartest people in the world, but I think the reason we've been able to have some success in our life, nothing like you yet, But certainly today is because we simply, we give a shit and we work really, really hard.

1:17:32Go the extra mile. That's right. What is it about Jewish entrepreneurs or Jews in general that you think gives us this work ethic? What do we think? First of all, I want to be clear. I'm happy to take your Shopify stuff. Okay, so when you talk about not doing so well, I'd beg to differ with that at the price you're at. I've made a few bucks along the way. So, look, when I grew up, my best friend, I had two best friends. One was Jewish, one was Catholic. Scorsese and I used to joke, I love that man, he's a devout Catholic. We'd say our mothers were the same, the guilt instilled in us was insane.

1:18:08The only thing that separated them was the cuisine they made. My mom made brisket and his mom made spaghetti. Yeah, I prefer that. And we came up with this thesis, the only thing different between Catholics and Jews is one's guilty before the fact, the other's guilty after the fact. ethnic people for some reason in my mind this is a broad generalization that you could pick apart but ethnic people strive for a kind of challenge you know and i it's it's a broad generalization and it's probably not true but a lot of my friends that were catholic did incredibly well they were supported by other Catholics.

1:18:53And my friends that are Jews are supported by other Jews. This is going to sound so stupid, and I'm sure it's published. I'm going to get just dumped on for this. But Jews kind of have been so oppressed over the years, even though now we're being accused of genocide and everything else, and everyone's forgetting that it's a country, not a religion. And I'm not saying it's right or wrong. I'm just saying... It's confused. It's confused. I totally agree. At best. But I have to say, I've always felt I'm like in a club. Right. And I always view people of the religion because it's so small as having some tie to me.

1:19:43And I can't explain it because it's not intellectually accurate. And we're not religious. Yeah. Yeah, we all feel that way, right? We all feel that way. It's this incredible thing. Well, I'll tell you a weird thing, Dave. I had got into an incident about a year ago where someone suggested that I sue someone for something they did that was really wrong. And when I found out he was Jewish, I wouldn't do it. There's no rhyme or reason. I just have this weird connection to people of the religion, and I'm not really ultra-religious. Neither are we. I do too. But I raise my kids Jewish with fake names, you know?

1:20:28My best friends are Jewish. I didn't pick them. That's kind of how it happened. Well, I'm friends with a lot of people that are of all different races, religions. I've never chosen my friends by anything except are they smart. Right. If they're smart and they can hold my interest, I have a real problem which I can't tolerate people that aren't bright, and I can't tolerate wastes of my time anymore because my runway is limited, and I don't want to be with uninteresting human beings. I find it's got nothing to do with religion. My friends are all a smorgasbord. But I do find a kinship in the religion that I can't really articulate a reason for.

1:21:15It's like we kind of all come from this group that have just had the crap beat out of us from day one. Fifteen million people on the entire planet. It's an unbelievable number. It's tiny. It cracks me up when people make these statements that we control this, we control that. It's just not true. But we get, we have that image of that. And I guess we also help propagate it, you know. Well, we punch above our weight class. Well, I think we all share that in common. I said to one of my young mentees, who was so smart, and I think he's Armenian. I don't really know. He's one of those countries over there.

1:22:01And I was at lunch with him, and I was on the phone with him last week, and I said, you know, I've got some really bad news for you. He said, what? I said, did you do 23andMe? He said, no. I said, you're so smart. You're so aggressive. You're so good. Somewhere in the family tree, one of your relatives slept with a joke.

1:22:25Well, we don't want to waste any more of your time and cross that threshold. Michael, thank you so much. It has been a great honor. I hope you enjoyed this conversation as much as we did. I could talk for hours. So can we. Yeah.