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William Morris: It's a Takeover, Not a Merger 

Why Jim Wiatt is exiting new agency WME before it starts

Wednesday, May 27 2009
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Beginning June 1, Hollywood’s newest talent agency, WME Entertainment, will hold a series of meetings to merge its two tenpercenteries Endeavor and William Morris. There’s even a meeting planned at the home of Ari Emanuel, Endeavor’s co-founder, and now WME co-president. But no one inside or outside the agency biz believes this is a merger anymore. Clearly, this was a takeover.

And nothing said that louder than the pre–Memorial Weekend move to oust William Morris CEO Jim Wiatt from WME before it even started.

I’d heard speculation for the past month that Wiatt, who was supposed to take over the merged company’s chairmanship, would be politely eased out. At least two WMA members of the new WME nine-person board — Peter Grosslight and John Fogelman — joined with the Endeavor members to ask Wiatt to jump before he was pushed in exchange for a meaningless title of “Emeritus.”

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Wiatt found out when, on May 15, his close pals, entertainment lawyer Skip Brittenham and former Viacom mogul Tom Freston, warned, “You have to resign, or you’re going to be fired.” Wiatt’s first reaction was anger, and then grief. And then it was, “What am I going to get in return?” I’ve heard the figure is around $25 million.

Let me make clear: This is not a mutiny. Rather, it’s a recognition that Wiatt had no place in the new company because of the leadership problems at William Morris that forced the venerable 111-year-old agency to seek out Endeavor in the first place. Nor did it help that Wiatt mishandled the negotiations and aftermath.

Wiatt made an enemy of Grosslight, the head of WMA’s very profitable music department, when the CEO tried to put his crony, William Morris COO Irv Weintraub, on the new WME board instead. So Weintraub — who’s not an agent and has no clients — had to give up the seat for Grosslight in order to make certain the music department members on the board vote to approve the merger.

It didn’t take long for Endeavor to lobby Grosslight to get rid of Wiatt. Now sources tell me Mark Itkin, Willam Morris’ unscripted television chief, who was being wooed by CAA, will go onto the WME board to fill the vacant Wiatt seat. As for Weintraub, without Wiatt to protect him, an attempt is currently under way to push him out of the new William Morris Endeavor as well.

Wiatt’s imminent exit was a shock to Hollywood, especially because he came into the venerable William Morris Agency with such fanfare. Yes, there really was a William Morris who in 1898 stopped selling ads for a garment-industry trade newspaper and started selling talent. But Morris’ greatest strength as an institution — its enduring constancy in the face of flux — would become the agency’s greatest weakness.

Close-knit to a fault, the elders who long ran the agency with one eye on the dotted line and the other on the bottom line viewed agenting not as a career but a religion. For young agents, the feeling you were almost working for your parents was at times odd, even humorous, and stood in contrast to the cruel realities of show biz. It was assumed that the Morris elders would be carried out the door feet first.

Wiatt was brought in to shake up all that. With a father in the schmate business, Wiatt was a Beverly Hills High brat who loved politics. Wiatt rose at ICM to co-chairman because he could massage egos, put out fires, translate boss Jeff Berg’s “vision” into everyday concepts and, most importantly, get Sam Cohn on the telephone.

But, for years, Wiatt had lived the high life (literally) and, after two divorces and a third marriage, found himself deeply in debt to ICM.

With reportedly more than $1.5 million worth of loans outstanding, and most of his compensation tied up in company stock, Wiatt made no secret of the fact that he needed cold, hard cash to keep his gilded lifestyle. He jumped to Morris in a decision all about the money.

An argument could be made that Wiatt had a near-impossible task to effect a generational transfer of power. A lot of egos were hurt, resulting in some surprising exits, when altercocker board members were pushed out to make way for 40-somethings, then 30-somethings, and reward the most successful agents and departments, like Grosslight’s music.

But it was also under Wiatt’s watch that scripted television, once the cash cow at Morris, weakened to such an extent that the agency is known more now for its unscripted division. WMA went from the undisputed No. 1 agency seller of scripted prime-time TV shows to maybe fifth today. And the motion picture department, which Wiatt was specifically hired to strengthen, faltered even further.

The problems reached critical mass last October after some layoffs inside the agency. Negative comments began flooding in to my Deadline Hollywood Daily, with unsavory allegations of personal and professional misconduct, including sexual harassment, hostile workplace, interoffice sexual liaisons and bullying behavior.

Sure, the Morris office had always been dysfunctional. But this hate-spewing exposed a huge schism between who was inside CEO Wiatt’s, COO Irv Weintraub’s and president Dave Wirtschafter’s cliques, and who wasn’t, based on cronyism and not merit. WMA was in chaos.

I suggested that Morris management take a long, hard look at itself. WMA did. Wirtschafter organized several staff meetings at which personnel were encouraged to air their grievances. The level of animosity was stunning, and WMA realized Wiatt had failed. A plan was conceived to make the TV and movie department operate more like the successfully led music department.

But that was back-burnered when Ari Emanuel and Jim Wiatt began their merger talk. Endeavor didn’t realize the extent of WMA’s internal strife until Ari, et al., saw that Wiatt was moving to save the jobs of his clique members to give him a power base in the new company. Wiatt gave Aaron Kaplan, the worldwide head of scripted television, a fat $11 million, five-year contract even though his department was tanking. And Wiatt was now pushing for Kaplan to stay with WME. The Endeavor leaders were appalled.

Then, on May 18, the feds agreed not to prevent the merger. That day, 100 WMA people, or 15 percent of the work force, were laid off. Endeavor’s layoffs would ultimately total only a half-dozen. And, over the past month, Endeavor went to several agents and told them they “likely” wouldn’t survive. That allowed them to start quietly looking for jobs. But that luxury of time wasn’t afforded the WMA agents.

I learned that, adding insult to injury, Wiatt had pitbull Hollywood litigator Patty Glaser send “cease-and-desist” letters to rival agencies demanding that they stop trying to hire any Morris tenpercenters. Sure, WMA didn’t want to lose agents it had decided to keep in the merger. But it also hampered the other agents from finding jobs early. (One rival who received Glaser’s letter called it “despicable” and “inhumane.”)

By May 22, Wiatt was hated within Morris. That’s also the day I reported his ouster. It’s ironic that he came to WMA for the money, and now will exit with a hefty payout. But it’s a high and humiliating price he’s paying for being the wrong guy to lead WME.

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