Hollywood's Agents Tighten Their Belts

May 29, 2009— -- To be a talent agent at William Morris once meant you had made it big in Hollywood.

Working his way up the ladder, one television agent spent four years as an assistant at the beck and call of a heavyweight dealmaker, before eventually becoming a "tenpercenter" himself, with entrée to Tinseltown's back lots and backrooms and most exclusive restaurants.

On Monday, that all changed. In one of the most public displays of the recession's grip on Hollywood, that agent along with 119 other employees were laid off at William and Morris, one of Hollywood's oldest and most storied talent agencies, which for a century has represented some of the biggest names in the entertainment industry.

For months now, Hollywood's talent agents -- those notoriously cutthroat dealmakers famous for negotiating on behalf of the famous and renowned for 10 percent commissions -- have felt the pinch of the economic recession.

Each of Hollywood's major agencies has recently cut back, reining in spending on conspicuous corporate cars, expansive expense accounts, pricey power lunches and armies of attentive assistants.

"I was in a different industry before I became an agent and I was lured in by the glamour. Agents were my celebrities and then you come in and you see it and soon enough it becomes your job. But I think agents are in denial. They still think they're masters of the universe and it's not reality anymore," said the recently laid off television agent, who would not speak for attribution in fear that would hurt his chances of finding another job.

"Times are different. The times of sitting in first class, drinking Champagne and having it all are done," he said.

While companies across the country are feeling the impact of the recession and cutting back, agencies have, for years, paid for perks beyond what was typical in other corners of white-collar America.

The layoffs come on the heels of a federally approved merger between the William Morris Agency and a smaller rival, Endeavor.

Insiders said the merger would be a mutually beneficial alliance during tough economic times, combining William Morris' strong music department with Endeavor's stronger television and motion picture departments. People knew there would be cuts, but the scale of the layoffs -- the largest mass termination at an agency in recent years, described by some as a "bloodbath" -- came as a surprise.

Clients at Endeavor include superstars Kanye West, Britney Spears and Russell Crowe. Endeavour represents box-office heavyweights Robert De Niro, Matt Damon and Adam Sandler.

While companies across the country are feeling the impact of the recession and cutting back, agencies have, for years, paid for perks beyond what was typical in other corners of white-collar America.

"The motion picture business has been contracting for a while," said a film agent who works at one of Hollywood's leading firms but was not authorized to speak publicly. "There is less money to make movies. Fewer movies are being made. And there are fewer jobs for high-end actors, all of which cut into the bottom line. The same is true for TV; fewer pilots are being made."

Called "tenpercenters" for their hefty ten percent commissions, being an agent meant looking the part, driving expensive cars, eating at expensive restaurants, travelling in first class and throwing lavish parties – all on the company's dime.