The William Morris-Endeavor merger: Dead men tell no tales
When one of the young film agents at the William Morris Agency left a lunch meeting the other day, he bumped into agency chief Jim Wiatt out in the hallway. As the story is told, when he asked Wiatt if he wanted to step inside and say hello to the troops, Wiatt quipped: "Why should I? You guys are all going to be fired anyway."
It was clearly meant as a joke, and Wiatt denies he ever said it at all. But judging from the funereal atmosphere at William Morris in the days following last week's formal announcement that Hollywood's oldest talent agency was merging with Endeavor, there is little doubt about who'll be the winner and who'll be the loser as the new company establishes itself as a new entity.
Put it this way: Nobody has written an obituary yet, but the verdict is pretty clear: William Morris is kaput. The body may still be warm, but the undertaker is outside the door and the gravediggers already have their shovels in hand. The mainstream media may have described what happened between the Ari Emanuel-led Endeavor and the Wiatt-led William Morris as a merger (designed to help both agencies weather Hollywood's tough current business climate), but what really happened was much closer to a hostile takeover. When I asked how long it might take before the ax begins to fall -- with reports circulating that as many as 100 agents, most of them from Morris, could lose their jobs -- one old Morris hand had a revealing slip of the tongue. "It won't take very long," he said. "The murders -- whoops, I mean the firings -- will happen pretty quickly."
It's no wonder that when one veteran studio executive searched for a way to describe the unsentimental task of consolidation that lies ahead for the newly merged agency, he described the struggle for power as being "A lot like 'GoodFellas.' " Even though William Morris is 111 years old and Endeavor has only been in existence for 14 years, there is virtual unanimity in Hollywood that by agreeing to a merger, it is Wiatt who has abdicated power. Although William Morris has a far larger staff of agents and what was thought to be an impressive $145-million war chest of funds from recent real-estate sales, Endeavor will be calling the shots. It's the minnow that swallowed the whale. And it is Emanuel and his managing partner, Patrick Whitesell, who are already clearly in power, with Wiatt expected to be a short-lived figurehead as chairman of the new entity.
What happened? Why did William Morris, with all its history and tradition, come out on the short end of the stick? Did Wiatt get out-agented and out-maneuvered by Emanuel? Or is there a more complicated historical parallel for what happened? Keep reading:
If you study the history of showbiz mergers, a pattern quickly emerges. In almost every instance, when two companies merge or otherwise join forces, it's the company with the most dynamic, forward-thinking leadership that ends up in the driver's seat. One of the first, but most historic, examples occurred in 1935 when Fox Films -- one of the industry's oldest and established studios -- merged with a much smaller, lesser-known company called Twentieth Century Productions. Fox had a fabled history, a sprawling studio lot and most of the resources. But Twentieth Century had the key to the deal: Darryl Zanuck, a brilliant, hard-charging young executive who already, at 33, had a reputation for fearless decision-making and a nose for hit movies.
At the time, Hollywood assumed Zanuck would be buried by the giant Fox bureaucracy. Instead, he transformed the studio overnight. Screenplays were thrown out, movies were canceled, payroll was slashed while Zanuck quickly revived Fox's fortunes, signing new and younger movie stars and bringing in a host of his favorite screenwriters and producers. In short, it was the younger, mercurial Zanuck, not the established but aging Fox executives, who was the real ruler of the new kingdom.
In the 1950s, Universal Pictures -- then known as Universal-International -- was one of the laggards in the movie business, with few big stars and even fewer savvy executives, having survived largely on Abbott and Costello comedies and low-budget monster movies. Most studios were having a rough patch, hit hard by the arrival of a new technology -- television. The company that had most quickly -- and shrewdly -- embraced the arrival of television was MCA, then still a talent agency, but also a powerful television producer through its Revue Productions subsidiary.
Over the next few years, MCA first acquired Universal's backlot, which it quickly upgraded and modernized. In 1962, MCA merged with Decca Records, which was Universal's parent company. There was ever-so-briefly a question about who would benefit most from the outcome, but it was readily apparent who was really in control -- MCA's Lew Wasserman.
Even though he is largely remembered today in Hollywood as an aging lion, in the 1950s and 1960s Wasserman bore a striking resemblance to Ari Emanuel, the two men both being known for their volcanic tempers and close ties to Washington power brokers. Like Emanuel today, who has helped seed production entities that fund films for his talent and cannily embraced the lucrative comedy business, Wasserman was a pioneer in far-sighted dealmaking (it was Wasserman, as Jimmy Stewart's agent, who essentially invented the back-end deal) as well as an embrace of new technology, being perhaps the first agent to realize that while the movie stars got better tables at Chasen's, it was the TV business that had far more lasting value.
There are plenty of more examples of where youth and vigor -- and yes, often Machiavellian maneuvering -- has triumphed over stature and experience. In 1972, when Asylum Records merged with Elektra Records, it was Elektra that had a much more stable and storied history, having been the home to everyone from Judy Collins to the Doors. But the upstart Asylum had David Geffen, then a young, ambitious manager (and former William Morris agent) turned executive who was riding the wave of the singer-songwriter boom ushered in by Jackson Browne, Joni Mitchell and Linda Ronstadt.
Even though it was a sale, not a merger, I'd argue that a great modern-day example of the value of youthful vigor is Disney's purchase of Pixar. If there was a key to the deal, it was the virtual merger of Pixar's astoundingly successful filmmaking prowess with Disney's increasingly ossified animation wing. Like William Morris, Disney has the older, more established brand, dating back to the 1930s. But it's Pixar -- like Endeavor -- that is the more vital and visionary company, having been largely responsible for making computer animation the aesthetic standard in the field. And it's John Lasseter, Pixar's chief creative officer, who has quickly become the big man on campus, just as Darryl Zanuck was at Fox 70 years before.
This is why Hollywood, even though it's been around nearly as long as the automobile or the airline industry, still has the feel of a young man's game. Out with the old, in with the new. It's a business that, to survive, has to reinvent itself every few decades, either by embracing new technology or by rewarding the entrepreneurial energy of younger executives. It's why the newly combined WME agency will, for better or for worse, almost assuredly reflect the vision and culture of Ari Emanuel's Endeavor.
As one William Morris agent put it, clearly with a bitter taste in his mouth: "Look at what Jim's done in his 10 years at our company compared to what Ari's done in the last 10 years at Endeavor. If you compare what Ari created and schemed and built versus what Jim did, it's not even a close call . They've clearly grown and prospered and done a far better job of embracing the future."
At a talent agency, where clients come and go, the real juice comes from brain power and street smarts. It's the juice that's fueled Endeavor's success story, which means it will be flowing through the veins of the new agency as well.
Photo of Jim Wiatt by Stephen Shugerman / Getty Images for HRTS