What is Michael Ovitz's Net Worth and Salary?
Michael Ovitz is an American talent agent who has a net worth of $500 million. Michael Ovitz revolutionized the entertainment industry as the co-founder of Creative Artists Agency (CAA) and became one of Hollywood's most powerful figures in the 1980s and early 1990s. After starting his career in the William Morris Agency mailroom, he and four colleagues founded CAA in 1975. Under his leadership, CAA transformed talent representation by packaging actors, directors, and writers for projects, essentially creating the modern entertainment agency model.
At CAA, Ovitz represented elite talent, including Tom Cruise, Dustin Hoffman, and Steven Spielberg, while pioneering the practice of helping corporate clients with entertainment strategies. He was known for his aggressive negotiating style and innovative deal-making, which helped CAA become the industry's dominant agency.
In 1995, Ovitz left CAA to become President of The Walt Disney Company. When he left CAA, he sold his stake to his partners for $200 million paid without interest over five years. His tenure at Disney turned out to be brief and controversial, ending in 1997 with a massive severance package that sparked shareholder lawsuits. Ovitz earned the equivalent of $250 million from Disney (inflation-adjusted) for a year of work.
Early Life
Michael Ovitz was born December 14, 1946, in Chicago, Illinois. His family eventually moved to Encino, CA, in the suburbs of Los Angeles. While studying at UCLA, he worked as a part-time tour guide at Universal Studios. After graduating, Mike landed a job in the mail room at the William Morris Agency.
In 1975, Mike and four other William Morris colleagues – Ron Meyer, Bill Haber, Rowland Perkins, and Mike Rosenfeld – launched their own firm, which they named Creative Artists Agency (CAA).
CAA
They borrowed $21,000 from a bank, rented a small office, and began conducting business on card tables and rented chairs. Their wives took turns as agency receptionists.
Under Orvitz's direction, CAA quickly grew from a start-up organization to the world's leading talent agency, expanding from television into film, investment banking, and even advertising.
Ovitz was known for assembling "package deals," wherein CAA would utilize its talent base to provide directors, actors, and screenwriters to a studio, thus shifting the negotiating leverage from the studios to the talent.
During his time at CAA, Ovitz served as talent agent to such Hollywood heavy-hitters as Tom Cruise, Dustin Hoffman, Kevin Costner, Michael Douglas, Bill Murray, Sylvester Stallone, and Barbra Streisand, as well as directors Steven Spielberg, Barry Levinson, and Sydney Pollack. He also provided corporate consulting services, helping negotiate several major international business mergers and deals, including Matsushita's acquisition of MCA/Universal, the financial rescue of MGM/United Artists, and Sony's acquisition of Columbia Pictures. His signing of Coca-Cola as a CAA client – which led to the ubiquitous "Always Coca-Cola" campaign – had a significant impact on the advertising industry.
Mike famously negotiated David Letterman's move from NBC to CBS, chronicled in Bill Carter's book "The Late Shift: Letterman, Leno and the Network Battle for the Night."
Ovitz now acts as a private investor who has informally advised the careers of such notables as Martin Scorsese, David Letterman, and Tom Clancy.
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Leaving CAA
Mike had been itching for another job in entertainment for several years. He noticed how the heads of studios like Terry Semel had cushy jobs where they would travel the globe casually reading a script or two on the way, whereas he was up at 5am every day and on the phone until midnight every night, 6-7 days a week. Furthermore, his studio-head contemporaries were earning hundreds of millions of dollars from lucrative stock options. In contrast, his private partnership was a grind with no light at the end of the tunnel.
Mike initially thought he was going to be made the head of studio MCA, which had recently been acquired by Seagram's heir Edgar Bronfman, Jr. – Mike actually advised Bronfman during his acquisition process.
Mike requested 5% of MCA stock to become the studio head. Bronfman and his family had just acquired the company for $6.6 billion, so asking for 5% was equal to asking for $330 million. Mike believed that CAA was worth around $350 million at that point and as the primary equity holder, he was leaving a large amount of money on the table potentially.
In the end, the Bronfmans rejected the offer and actually ended up hiring Mike's CAA co-founder, Ron Meyer to take the job. It would be the end of their relationship forever. Interestingly, Meyer would go on to run MCA for more than two decades.
Disney
Ovitz officially left CAA in 1995 to take a job as the #2 person at Disney. Mike initially thought he would soon become CEO of Disney, taking over for Michael Eisner, who had been experiencing health issues. Eisner ended up essentially not giving up his position in any meaningful way, which left Ovitz very frustrated and sandbagged. When he left CAA, he gave up $200 million in guaranteed future fees. To compensate him for those fees, he agreed to be paid $200 million over five years without interest. To lure him over to Disney, Eisner established a no-fault golden parachute if the position did not work out.
Disney Payout
Ovitz left Disney after a little over a year. As a parting gift, he was paid $138 million ($38 million in cash and $100 million in stock). Disney shareholders sued Eisner and the Disney board for agreeing to such a large package, but that lawsuit was ultimately not successful.
If Michael still holds those original $100 million worth of shares from 1995, today, they are likely worth north of $800 million, though he is not listed in corporate filings as a significant shareholder today.
Other Work
Ovitz now acts as a private investor who has informally advised the careers of such notables as Martin Scorsese, David Letterman, and Tom Clancy.
Outside of business, Michael is an active investor and philanthropist. In 1999, he donated $25 million to UCLA's medical center.
He is also one of the world's top art collectors, owning pieces by Jasper Johns, Pablo Picasso, Mark Rothko, and Willem de Kooning. His collection is easily worth tens of millions, or perhaps even $100 million+.
