“The Most Powerful Man in Hollywood” Speaks

In the 80s, Michael Ovitz was known as the “most powerful man in Hollywood.”

At the helm of his company, Creative Artists Agency, he wrestled creative control away from the film studios and gave it back to the directors, actors and creators he represented.

Without CAA, classics like Jurassic ParkGhostbusters, and Schindler’s Listwould have been dogged by studio meddling.

However, Ovitz made sure these projects got into the hands of the right people — people like Steven Spielberg and Bill Murray. Then he stepped aside to let them do what they do best.

But nobody ever became “the most powerful man” of anywhere without stepping on a few toes… and Ovitz certainly wasn’t afraid of some aggressive foot work.

He was a ruthless businessman. His temper was the stuff of legend. And even Hollywood’s biggest stars would walk on eggshells around him.

“Michael Ovitz carried a heavy hammer, and he swung it like he was Beverly Hills Thor,” said Sylvester Stallone in an interview for the book Powerhouse: The Untold Story of Hollywood’s Creative Artists Agency. 

“He went around smashing people, sometimes I think just for the fun of it. He did things to me that I thought were beyond unfair . . . Is he beloved? That’s a rhetorical question.”

Beloved or maligned, Ovitz has had a profound impact on the way business is conducted in Hollywood.

Last week, he sat down with James Altucher and divulged his top 10 lessons he learned from the cutthroat world of entertainment…

All the best,

Owen Sullivan

Owen Sullivan
Editor, Money & Crisis

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10 Lessons from the Most Cutthroat, Competitive Business in the World

By James Altucher


James AltucherMy favorite movies wouldn’t exist if it weren’t for Michael Ovitz.

Jurassic Park, Michael Ovitz

Ghostbusters, Michael Ovitz.

Schindler’s List, Michael Ovitz.

I asked him about dominating an industry, hard work, spotting talent and his bestselling book Who is Michael Ovitz?

He told me why entertainment is “the most cutthroat, competitive, difficult business in the world.” And how he not only kept up, but completely reinvented it.

“Look,” he said. “At the end of the day, there’s something everyone forgets… It’s a business that defies description.”

Meaning the movies are not what they look like in the movies.

I needed to ask him a hundred questions to get behind the scenes. Literally.

“It’s unregulated. It’s all about human beings and their ideas. Your capital comes from complex places,” said Michael.

“Your ideas come from complicated people. And putting one complicated person with another complicated person takes you to the 100th power of how complex it is. And everyone is competing with everyone else in a very hard and heavy-handed way.

“And frankly, we came in and just did it better.”

1. Great Projects Always Surface

I was trying to get Michael to tell me he’s historically one of the most influential people in Hollywood. So much so that there’s a pre-Michael Ovitz and post-Michael Ovitz era in Hollywood.

But he wouldn’t.

“Great projects always find a way to the surface,” he said.

“OK, you say that, but I see in your book the effort you did to put together movies that nobody else thought was possible.”

I tried to get him to take credit for Ghostbusters, Rain ManJurassic ParkSchindler’s List, etc.

But, instead, he talked about the talent of the directors and the writers and so on.

And I understand that because giving credit is good. But it’s also a skill to believe in people before the crowd does. And that’s what Michael Ovitz did.

2. You Can’t Make Everyone Happy

Michael constantly faced outside pressure from all sides: actors, directors, studios, etc.

But he didn’t seem bothered by it.

“No matter how diplomatic we were it never worked,” he said. “At the end of the day, there’s always someone who’s disappointed.”

Then he gave me an example.

“Take Jurassic Park. When Steven Spielberg was made the director, there were 50 other directors who thought they should’ve been the director. And when it went to Universal Studios for distribution, there were seven other studios that thought they should’ve been the distributor. No one was ever happy.”

And what did he have to say to them?

“There was very little to say.”

He didn’t waste time appeasing people who couldn’t be appeased.

He made movies. And the success of the movies lead to more movies, which gave more directors and more studios chances to be a part of the magic.

3. Invest In Your Industry

“I remember when Universal’s stock started to head down into the low-$20s,” Michael said. “A lot of NY corporate raters were taking position in the stock. And that was really dangerous for us.”

Why?

“Because at $20 a share, at that time, that was about a $2 billion valuation for the company. That was about the value of their real estate. And probably the value of their library.”

They were undervalued. And if the corporate raters got control, they were going to break up Universal Studios. Which would essentially hurt CAA. And Michael Ovitz.

CAA needed the industry to do well. If they lost Universal, they lost a buyer.

“The studios were our financers. Without them, there were no movies.”

So he started to invest in the studios. Which bring us neatly to lesson #4…

4. Start With One Core Idea

Michael didn’t start out with this macro vision.

He started in the mailroom at William Morris Agency. And saw a way to disrupt the talent agency business.

“Our goal was to create ideas and create packages.” This was new in the 70’s.

So it worked.

But he didn’t rest there. One area of business lead to the next. And eventually, all of Hollywood.

“My point of view was that we could extend our basic business into other core businesses. And that’s exactly what we did. As long as it had some beneficial relationship to the core business.”

5. Don’t Limit Yourself to One Thing

Michael created CAA to be one thing: a talent agency. But he built it into many other things.

“I’m a strong believer that everyone has the potential to do more than one thing,” he said.

He expanded CAA into an ad agency for companies like Coca-Cola. He headhunted talent. He invested in studios. There was no line of business he would say “no” to.

So I asked, “How can people expand in their own lives?”

And he said, “Think broadly.”

That’s what I try to do with this podcast every day.

If I just thought “podcast,” I’d die creatively. Which would lead to emotional death. And eventually physical death.

I’ve turned it into a YouTube channel, an IGTV channel, I’ve turned the lessons I’ve learned from guests into books, partnered with an animator, started a Facebook Group and so on.

6. Don’t Retire. Reinvent

There are hundreds of ways to reinvent.

These are two main ways to reinvent:

  1. Try something totally new
  1. Get better at a skill

Then there’s Michael’s way: apply a skill you already have to a different industry

Let’s say you’re an accountant at a bank. But you want to work in aerospace. NASA needs accountants.

Michael is an expert at spotting talent. And he has 40 years in business. So he’s transferring his skills from entertainment to Silicon Valley.

7. Trust Your Gut

Michael is a master at discovering talent in any industry.

Paul Newman, Robert Redford, Martin Scorsese, the list goes on. I wanted to find out how he became such a master at identifying talent.

“It’s not a science,” he said. “It’s an art.”

“A lot of it has to do with sitting across from someone and listening to them talk, understanding where they come from, their ideas, their views on things.”

And now he’s in Silicon Valley finding talent to invest in.

So I asked again, “But how do you know?”

And his answer was simple.

“When my brain and stomach connect, it’s a hit.”

8. Find Your Motive. And Work Hard

When Michael wanted a client, he hit every angle. He made 400 calls a day. He’d go to their office to make small talk. He’d send their wives gifts. And sometimes it would take years.

“I honestly can’t imagine working that hard,” I said.

“Fear is a phenomenal motivator. I didn’t want to go backwards. I didn’t want to live the way I was brought up, not that it was bad. I wanted better things. So I was incredibly motivated to work.”

9. Walk Away Sometimes

Michael was the #2 guy at Disney. But he knew it wasn’t going to work out. He knew before his first day.

He was at Michael Eisner’s house (the CEO of Disney at the time). The CFO and Chief Legal Officer announced that they weren’t going to report to Michael. They said it in the open. And that was that.

The CEO just sat there. “Right then and there I knew it was done. It was over.”

“Do you regret anything you did? Could you have walked out the door and started something else?”

“It was too late.”

He already had a contract and he turned CAA over to nine other guys.

So he committed himself to Disney.

“Naively, I thought I could turn it around. I figured, no one works harder than me. Unfortunately, the harder I worked the worse it got.”

10. Go Where You’re a Freshman

He just finished telling me what he missed about CAA. “The human being part I miss a lot.”

So I asked, “What are you looking forward to now?”

“I just love going up the Valley. I feel like I’m a freshman again learning about things that are all new for me.”

I like asking this question. Because if someone asked me, “What are you looking forward to?” my answer from six weeks ago would be totally different than what I’d think today.

The question implies something good is coming. That’s why I like asking it.

Because people get guarded around goals. It’s scary to say, “I want X in my life.” It’s scary to realize your dreams.

But it’s not scary to say you’re looking forward to something.

I can say “I’m looking forward to the next 100 podcasts.” Michael can say he’s looking forward to bioscience and biotech.

People can’t say “no” to that.

And if they do, just remember what Michael said…

“Great projects always surface.”

Sincerely,

James ALtucher

James Altucher

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Written By Owen Sullivan

Owen Sullivan isn’t a millionaire or one of the Wall Street elite. He was just one of the many folks who was hit hard when the housing bubble burst… and decided he was never going to let that happen again. Since then, he’s worked with industry experts to develop strategies and techniques to bulletproof his finances — and yours — against the next crisis. His methods don’t require years of financial experience. These are simple strategies that anyone can follow. After all, financial prepping shouldn’t be reserved for a select few.