Talent agencies at the heart of the Hollywood system

Article  by  Pierre-Henri LEON  •  Published 20.08.2013  •  Updated 29.08.2013
Talent agencies are often seen as the very heart of the whole Hollywood system. They play a very significant role in the current system and one is that undergoing considerable change.

Summary

Generally, an agent acts as an intermediary and represents a client such as an actor or a film director. Typically, agents find or select work for their clients and negotiate their contract with the producers or the studios. They can also sell scripts, help to find funding, act as intermediaries between several companies that need to collaborate on a project, or take a financial stake in a production. New media are also involved and the agencies continue to diversify their roles and sources of income. The standard commission of an agent is 10%, which is why the magazine Variety calls them the “10-percenters.

During the golden age of Hollywood (until the end of the 1940s), it was the studios that had most power, especially by way of their control over actors and film-makers. Actors were called Paramount actors or Warner actors and they made films for them alone. Just like football clubs do now, studios discovered actors and managed their career. Talent agencies gradually appeared because their actors were increasingly getting into financial and legal wrangles with the studios, and they needed somebody to represent them. Also, from the 1960s, the fall in the number of cinema-goers brought about a radical change in the way films were made, notably the move towards studio productions. They managed to reduce their (high) costs tied up with exclusivity contracts with actors. Actors were no longer the “property” of a studio and were therefore able to work in films made by other studios. From then on, agents were seen as an essential link in the chain. They became the essential intermediary between their clients and the producers or the studios.
 
There are hundreds of agencies, but the market is dominated by the “Big 4”: Creative Artist Agency (CAA), International Creative Management Partners (ICM), William Morris Endeavor (WME), and United Talent Agency (UTA).

The different kinds of agencies

In California, agencies have to have a licence and are bound by the California Talent Agency Act which defines an agency as: “a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment for an artist or artists.” The agencies are also certified or a member of one of the guilds such as the WGA (Writers Guild of America – for script writers) or the SAG (Screen Actors Guild – for actors). Some agencies are also members of the ATA (Association of Talent Agents) which has been around for over 60 years. Another body that represents agents is the National Association of Talent Representatives. These two organisations represent around 150 agencies. However, the SAG and/or the WGA have approved another 350 agencies. This shows the number of agencies in existence. Some agencies provide a full range of services, while others specialise in a few areas.

The agencies can represent their clients that are “above the line”[+] NoteThe phrase “above-below the line” was originally a budgetary term, when studios literally drew a line in the budget between the creative and technical staff.X [1] (who play a key role in the artistic direction of the film) such as actors, scriptwriters and film-makers, and/or clients who are “below the line” (who mainly hold technical positions in the production) such as costume managers, film editors, special effects personnel, assistant directors and stunts coordinators, or photography directors.

For a long time, below-the-line agencies were only recruitment agencies that producers or film-makers called to find out who was available to make up a team. Some large agencies also started to represent below-the-line clients. So UTA set up the UTA Production Department in 1994 and represented all kinds of technicians. Working with clients below-the-line enabled them to provide a more complete package.

There are two kinds of agencies for above-the-line clients. Agencies that represent actors are called talent agencies, and those that represent script writers, directors and occasionally producers are called literary agencies. The biggest agencies are therefore talent and literary agencies.

There are also specialist agencies such as model agencies or musician agencies, but we will not be looking at those in this article.
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The basic role of agents

The main responsibility of agents is to find or select work for their clients then to negotiate their contracts. Over time, the scope of their work has grown considerably.
 
The work of the agent for well-established actors and film-makers consists mainly in helping to choose their client’s new job rather than actually finding it. The agent receives a large number of offers and will assess them for their client. Often, the agents receive scripts, and junior employees read them to say what they think. Agents, however, often proactively seek work for their client. Their method differs depending on whether they are working for actors (talent) or scriptwriters and directors (literary).

For talent agents, one of the main tools at their disposal is breakdowns, which are documents published every day that describe the key elements of upcoming films such as the synopsis, the characters, the names of the directors, producers and the casting director. Word-of-mouth and the agent’s contacts are also prime sources. The least well-known actors are presented to the casting director with a photo and a curriculum vitae. The casting directors can receive hundreds of applications. The aim of the agent is to clinch an audition for his or her client, and then to negotiate the contract. The aim of the actor is to get the role.

Literary agents represent scriptwriters, directors, and sometimes producers and all those who work above the line apart from actors. They differ in a few ways from talent agents. For example, the agent of a scriptwriter sometimes has to sell the rights to a script that already exists (although, by definition, an actor has not yet worked when he or she is taken on). The agent can also help and guide the scriptwriter in the writing process. The main technical terms are specs, writing assignment, and directing assignment.

When a client is writing a new script but has not yet been taken on to write it, we talk of an on spec script(spec = speculation), and the agent sets up a strategy to sell the script. The scriptwriters can also obtain writing assignments such as adaptations of books, or the development of an original idea. The directing assignmentsare contracts for a film-maker to direct a film. Film-makers that are not yet well-known send reelsextracts of their previous work. If a studio wishes to work with a film-maker, it sends a script to the agent who then passes it on to the film-maker. If the film-maker is interested, the agent will take care of dealing with the studio and the producers.

The second main job of the agent is to negotiate the contract between his or her client and the studio or the production company. Negotiating a contract requires taking into account different groups of rules such as those of the Screen Actors Guild (SAG) or for scriptwriters, those of the Writers Guild of America (WGA). The rules lay down, for example, the number of consecutive hours an actor can work and the means of transport to the filming location. The terms of the negotiation cover many aspects such as the fee, shares in the film’s profits, as well as the terms and conditions of filming and of promotion.
 
The agents can also advise their clients on their career. They should not, however, be confused with managers. The difference between an agent and a manager can sometimes be tenuous. In short, agents find work for their clients and negotiate their contracts, while managers advise their clients, put them in touch with producers and studios, and guide their career in the long term. Managers do not negotiate contracts as agents do, but they supervise the negotiations, taking care to ensure their clients get what they want. Managers usually have fewer clients than an agent.
 
Agents receive 10% of the gross income of their client. Managers receive 15%, and their lawyers generally take 5% or are paid by the hour. There may also be other stakeholders in the actor’s entourage, such as a publicist(who makes sure that their clients are spoken and written about), and the personal assistantfor big actors and film-makers (who takes care of all sorts of little tasks to make the actor's life easier – from organising the actor’s schedule to doing his or her shopping). So, before tax, 30% has already been deducted from the actor’s fee. The agent’s commission is deducted automatically by the producers before the actor receives his or her fee.
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The extension to the agent’s role

Over time, agents have considerably broadened the scope of their activities and have gone beyond the role of simply finding work and negotiating the contract. Agencies are considered particularly powerful owing to their ability to produce film packages; this means giving studios a ready-to-go film team with, for example, a scriptwriter, film-maker and the main actors. One speaks for example of a “CAA film” (Jurassic Park was seen as a CAA film because Michael Ovitz brought together all the main members of the team). Making packages enables them to find work more easily for their artists who are less in demand. So, for example, if a studio wants to take on Brad Pitt for a film, they will have to take less-in-demand artists from the same agency for secondary roles. More or less the same practice is used for the sale of film catalogues. This ability to provide a package is a sign of the increasing power of agencies when dealing with studios. Providing packages was first of all done for television, and then it developed for films.

Agencies can develop regular and continuous income through legacy payments, which is money from deals for television programmes or films that are regularly repeated. The agencies have at last developed a special appetite for entrepreneurial clients who are at the same time scriptwriters, producers, and actors (like Ricky Gervais with The Office). These clients receive part of the profits of these productions which generate income for them – and their agents – each time they are repeated.

Agencies can also sign agreements for product placement in films. For instance, they encourage scriptwriters to leave room to insert products into the films, and then sell this space to the highest bidder. Along the same lines, they can also negotiate the endorsement of products by stars in advertising campaigns.

Agencies do not only represent physical persons (actors, directors etc.). They also represent industrial or general public brands to integrate them into the business of Hollywood and create marketing programmes connected with films or television series, and may even create their own programmes. The CAA represents Coca Cola, General Motors and the Cirque du Soleil. The agencies even represent virtual characters from cartoons or video games. Lara Croft from the game Tomb Raider was the first character to be represented as a real actress by an agency (CAA in 2002).
Agencies such as ICM also make the occasional foray into publishing, representing writers with publishers. They also work in the other direction, adapting books that have already been published.
Agencies are also involved with new media. For example, in 2006, UTA was the first agency to set up a division specifically to represent creators of content for the Internet. They are also increasingly representing people involved in the creation of video games and cartoons.
 
Finally, some agencies, such as CAA, go even further and take on a business banking role, helping to sell studios or production companies or prompt mergers between them. They have also developed an advisory capacity, helping with strategy in the entertainment world.
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The main agencies

The largest agencies in Hollywood were for a long time described as the “big five”; that is, until 2009 and the merger between Endeavor and William Morris Agency, which are referred to as William Morris Endeavor (WME). The other main agencies are the Creative Artist Agency (CAA), International Creative Management Partners (ICM), and United Talent Agency (UTA).

 
Creative Artist Agency is seen as the most important agency. It was founded in 1975 when five agents (Michael Ovitz, Ron Meyer, William Haber, Michael Rosenfeld, and Rowland Perkins), decided to leave William Morris to set up their own agency. In the 1980s, the agency was the only one to ask studios for a share in a production’s profits in addition to the 10% the agents usually took on a contract. David Geffen then accused the CAA of destroying the Hollywood system. He also accused them of pushing up actors’ salaries too high. We can therefore say that the current debate in France about actors’ salaries is neither new nor specific to France. During the 1990s, CAA extended its activities, not limiting itself to representing talent. The agency became fully involved in advertising, business finance, consultancy and the representation of corporate clients. Its main clients are the most popular actors, musicians, writers and athletes such as Georges Clooney, Tom Cruise, Brad Pitt, Eminem, Will Smith and Steven Spielberg. CAA also represents many French artists such as Vincent Cassel, Marion Cotillard and Bérénice Bejo. CAA has offices in Los Angeles, New York, Nashville, London, Beijing, Chicago, Stockholm and Bombay.

 
William Morris Endeavor (William Morris Endeavor (WME) is the oldest and largest agency. It was created under the name of William Morris Agency in 1898 and then became the most important agency, mainly representing Vaudeville actors. In 1995, four agents from ICM, David Greenblatt, Tom Strickler, Rick Rosen and Ari Emanuel (also the brother of Rahm Emanuel, the former chief of staff of Barak Obama) grouped together to create the agency Endeavor. The television series Entourage was inspired by these agents. In 2009, William Morris and Endeavor merged to form William Morris Endeavor, the largest agency in the world with almost 5,000 employees. WME notably represents Dustin Hoffman, Ben Affleck, Matt Damon, Keira Knightley and Jean Dujardin. WME has offices in Beverly Hills, New York, London, Nashville and Miami.

 
United Talent Agency (UTA) was founded in 1991 from the merger between two other agencies, Bauer-Benedek Agency and Leading Artists Agency. UTA represents Johnny Depp, Harrison Ford, Owen Wilson, Gwyneth Paltrow, Paul Giamatti, Anthony Hopkins, Tim Robbins, Ewan McGregor, Rachel McAdams, Kirsten Dunst, Ice Cube, Anna Kournikova, Daniel Radcliffe, Joel and Ethan Coen, Judd Apatow, Wes Anderson and Omar Sy. UTA is also known for its “UTA Job list”. UTA has new premises in Beverly Hills and offices in New York.

 
International Creative Management Partners (ICM) was created in 1975 following the merger of Creative Management Associates and International Famous Agency. In 2005, the agency started to raise funds to finance its strategic growth. In 2006, ICM bought out the agency Broder Webb Chervin Silbermann. In 2012, the agency organised a management buyout[+] Noteor “MBO: a company is bought out by its managers or employees.X [2], formed a partnership and changed its name to ICM Partners. The main clients of ICM are now Woody Allen, Richard Gere, Halle Berry and Chris Rock. ICM has offices in Los Angeles, New York and London.

Agencies play a central role in the Hollywood industry. Their importance is such that in addition to supporting the clients they represent, these agencies also serve as launch pads in the industry for their own personnel. The big agencies have set up agent training programmes that are much sought after. The traineesusually start in the mailroom, and then work their way through the various departments of the agency until they become an assistant and then an agent in their own right. The agents are so exposed to the entire industry that they frequently become studio executives. The career of an agent is often referred to as one that goes “from the mail room to the board room”. David Geffen said that the training programme of the agency William Morris was the “Harvard of show business – but better, because there are no grades, no exams, a little salary, and great opportunities at the end.”
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References

David ZELENSKI, “Talent Agents, Personal Managers, and Their Conflicts in the New Hollywood”, 76 Southern Californian Law Review, 979, 981–82 (2001)
 
Frederick LEVY, Hollywood 101: The Film Industry, St. Martin's Press (2000)

Janet WASKO, How Hollywood Works, SAGE Publications Ltd (2003)

Jason E. SQUIRE, The Movie Business Book, Touchstone (2004)

Paul MCDONALD, The contemporary Hollywood Film Industry, Wiley-Blackwell (2008)

Tony MARTINE, An Agent Tells All: An Uncensored Look at the Business of Acting, Hit Team Publishing (2005)

Kelly CRABB, The Movie Business: The Definitive Guide to the Legal and Financial, Simon & Schuster, 2010

Mark LITWAK, Dealmaking in the Film and Television Industry From Negotiations Through Final Contracts, Silman-James Press (2002)
 
Dina APPLETON, Hollywood Dealmaking: Negotiating Talent Agreements for Film, TV and New Media, Allworth Press, (2010)

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  • 1. The phrase “above-below the line” was originally a budgetary term, when studios literally drew a line in the budget between the creative and technical staff.
  • 2. or “MBO: a company is bought out by its managers or employees.
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