Hollywood's Agents Tighten Their Belts

Talent Agencies Cut Back on Entertainment and Commissions

Steve Ovitz, a former agent at Creative Arts Agency who went on briefly to hold the number two spot at the Walt Disney Company (parent company of ABC News) in the late 1990s, complained in a 2003 lawsuit deposition brought by shareholders against the company that he never was reimbursed for throwing a party that cost $90,000.

"There is probably no one in the city of Los Angeles that could have drawn the kind of people we did to that party and do it for $90,000," Ovitz said in deposition, prompting the lawyer for the shareholders to ask, "At CAA, you would have been fully reimbursed for the party?"

"One hundred and ten percent," Ovitz answered, according to the brief.

Those days of nearly bottomless expense accounts are over, industry insiders told ABC News.com.

"All of the agencies are tightening their belts," said the film agent.

Endeavor founder Ari Emanuel, brother of White House Chief of Staff Rahm Emanuel, is the inspiration for the agent Ari Gold character on the HBO series "Entourage."

On the show, Gold is known for a no-holds-barred style of negotiating. The character flaunts all of the lavish trappings that come with being a powerbroker. He flies in private jets; he sits courtside at Lakers games and races a rival agent through the streets of Beverly Hills in a Ferrari with a license plate that reads "ARISFRRI."

"It's an image thing," said an agent at top-five firm not authorized to speak. "Being an agent means driving a nice car. Everyone's got a BMW. But that's all changing pretty quickly. CAA is cutting its budget for cars."

At William Morris, agents have been told they no longer can fly first class, and if business with a client or studio executive can be taken care of over a cup of coffee instead of a pricey dinner, it should be.

"It used to be that if you were an agent, your actions wouldn't be questioned," said Nikki Finke, editor of Deadline Hollywood Daily, the blog that broke news of the layoffs. Some William Morris agents are said to have learned on the blog of what the company was planning before it was announced officially.

"Expense accounts were expense accounts, used at your discretion," Finke added. "If you had a client that needed you, you would hop on a first class flight to France and stay at a five-star hotel. A lot is different these days."

Hollywood Feeling the Pinch

Agents are supported by a phalanx of personal assistants. Neophyte employees looking to become agents at William Morris begin in a training program called the "mailroom." They climb their way up the corporate ladder by assisting senior agents, getting berated along the way.

"It has gotten to the point where assistants are not allowed to stay past 6 p.m. at William Morris. They're just thrown out of the building," said Finke. "They can't afford to keep them around and pay them overtime."

If not for the recession, Endeavor and William Morris likely would never have merged, said Jerry Katzman, a former WMA agent and now a professor of industry relations at the UCLA School of Theatre, Film and Television.

"The companies are a natural fit and there is a reason for them to merge beyond economics," Katzman said. "But the recession was the catalyst. The strike had a lot to do with it. Lots of money has been lost. The companies complement each other a lot."

The new company will be called WME Entertainment.

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