While partners Bryan Lourd, Richard Lovett and Kevin Huvane are paying themselves $15 million a year, their tenpercentery is buzzing that the bonuses for the agents who work for them will be cut by another 10% this year.
Actually, the total trim is 20% over two years because the agency slashed bonuses by 10% back in 2006. And all because the CAA partners spent too much money on their pet projects.
Here are some of the figures I'm hearing: Moving to that Century City monument to ego, which was Bryan Lourd's idea, cost CAA around $30M to $35M. Buying a sports agency business, which was Richard Lovett's idea, racked up another $30M to $40M. Setting up in China, which also was Lovett's idea, meant an additional $5M to $10M. And let's not forget that CAA can't negotiate better than zero upfront money for a star like Jim Carrey. So now the children have to suffer because the adults can't balance their check book. Or is it the other way around?
Meanwhile, there are more rumors about Bart Walker leaving CAA, this time to partner with indie prince John Sloss. I can't imagine anyone even cares since Walker clients like Sofia Coppola and Julie Taymor aren't on must-hire lists.
Yet a CAA partner swore to me 11 days ago that Walker was not exiting the tenpercentery when the rumor swept Hollywood that Bart had been fired. Then again, CAA has this habit of placing its discarded agents around the Industry and making it look as if everything was amicable.
In turn, the grateful peon is pathetically beholden to the agency for not being humiliated.
Walker headed the motion picture division of ICM's NY office then defected to CAA's NY office in 2004.
If CAA agents this week are looking inconsolable, it's because they now have to give up flying first class.
(Those conversations you're trying to overhear at lunch in Century City are the CAA tenpercenters kvetching about it.)
So what happened? My sources tell me that CAA called a big all-agents meeting and read the riot act to its spendthrift tenpercenters.
To cut expenses by a whopping 20%. To start flying just business class instead of first class. And to take to heart this warning: If you want to get paid, then get your clients jobs.
I hear the motion picture agents are the most upset about the new edicts because they live the high life more and so got hit harder.
Look, I've been saying this for a while now: CAA can't keep spending like drunken sailors without having cash flow issues: buying a bevy of agents from other shops and wooing clients by the hundreds, and moving into swank new headquarters while still paying rent back at the I.M. Pei building, and starting a money pit of a sports division where most of the endorsement deal money will be heading back to IMG for years, etc.
Now CAA is having the same woes every other agency in town has been having: for instance, William Morris last year asked its departments to slash spending by 20%. What's next? Richard Lovett on Avenue Of The Stars with a metal detector looking for loose change and lost jewelry?
I know that Richard Lovett and Bryan Lourd have been looking for ways to counter what they perceive to be my negative reporting about the tenpercentery. They want some carefully orchestrated media that's got a positive spin about CAA as something other than a Red Carpet monolith that steals stars instead of growing talent, and lures agents from other tenpercenteries with big paydays in exchange for never having a high-profile again.
In addition to this NYT article (that's written by the guy who two decades ago reported interestingly on CAA under Michael Ovitz), there's also a Fortune magazine piece being written about the agency. I find it interesting how CAA is so desperate to change the growing Hollywood perception that it's suddenly vulnerable.
But it can't keep firing agents and assistants and support personnel (and having the ex-employees badmouth the agency), or enact draconian cost control measures (because its partners overspent like crazy), or lose high profile clients (the latest is corporate client Hasbro, which jumped to William Morris; on the other hand, actor Alec Baldwin left CAA and came back) without people in this town talking about it.
Who didn't roll their eyes when CAA moved into new Century City digs while still owing rent on the old I.M. Pei space for a long, long time? Or that the agency footed the bill for limos to ferry stars to Bryan Lourd's Oscar party?
That's not to say that CAA isn't still the dominant Hollywood agency. But talent managers who used to give CAA the first meeting, and usually the only meeting, are now setting up confabs with all the major agencies.
And then, if the client doesn't choose CAA, the managers aren't intimidated by Lovett's veiled threats.
Nor is CAA far out in front of the pack anymore: UTA is a comedy powerhouse, Endeavor is innovating movie finance, ICM is steamrolling television, and William Morris is a major corporate rep.
Cracks in CAA's once fortress-like foundation are showing. And its partners are increasingly nervous about the media exploiting the fissures. That's why, instead of firing agents, CAA is now trying to get the reps placed in Hollywood first (heading up a director's production company, for instance) so the move won't produce malicious headlines.
I should remind that the last time CAA arranged a big puff piece on itself, it blew up in its face.
In April, USA Today wrote that the tenpercentery's new sports division has gone "from concept to colossus". A few weeks later, CAA Sports was fired by star quarterback Matt Leinart. A few weeks after that, its next star QB Brady Quinn was only the 22nd NFL draft pick.
Be careful what you wish for.