Chapter 121: Cruise's Departure

[Chapter 121: Cruise's Departure]

If there was a spark to ignite the fire, then Richard Gere's interview published in the media became that very spark.

On the day that interview hit the stands, a spokesperson for CAA adamantly refuted Gere's statements, declaring them to be nothing but fabrications that completely disregarded the facts. They asserted that if he continued to make such irresponsible comments, CAA would take legal action to set the record straight.

While many people recognized that Gere had positioned himself as a "victim" in his anger-fueled statements, and that any professional with a bit of industry knowledge could easily poke holes in his claims, this didn't stop the media from digging deeper into certain facts he mentioned.

The power of gossip was tremendous. The very next day, articles began surfacing that dissected the long-standing tensions between Michael Ovitz and Kepler Hyde. It came to light that after leaving CAA, Kepler Hyde struggled in Hollywood, almost being forced to relocate to Europe.

Although CAA had grown into a towering presence, it wasn't without its blemishes. Coupled with its strategy of bundling sales, it was likely to result in some film failures, and naturally, those failures were brought to the media's attention.

From "From Best Buds to Archrivals: The Untold Stories of Two Ace Agents" to "The Hidden Hand Driving Soaring Costs in the Film Industry: A Decade-Long Comparison of Hollywood Movie Expenses"...

As more articles aimed at tarnishing CAA's reputation began appearing, an anti-CAA movement slowly took shape.

...

In the years leading up to this, CAA's growth had heavily squeezed the operating space of other Hollywood talent agencies, and Ovitz's bundling sales strategy had left many film companies in distress. Not only had CAA pushed star salaries up significantly, but the bundling tactics also forced film studios to shell out massive costs far beyond their budgets.

The six major film studios put up a better fight against CAA, managing to maintain some negotiating power during their skirmishes. However, for the countless mid-tier studios and independent filmmakers, CAA's bundling approach left them without a means to defend themselves. They didn't possess the same fame and leverage as Eric, whose every film was a blockbuster, so they had no choice but to accept CAA's terms.

With many talent agencies, a large number of film companies, countless independent filmmakers, and even a few voices from the television media unhappy with CAA's bundling of TV projects, any one of these factions could inflict serious damage on CAA's reputation. The situation was exacerbated as they all instinctively rallied against CAA without any prior coordination.

Of course, some individuals also spoke in support of CAA. Several actors under its wing gave interviews where, even if somewhat reluctantly, they expressed positive sentiments about CAA. After all, CAA had raised production costs for film companies, and these actors were among the primary beneficiaries. Yet, these supportive voices made little impact, largely because the opposition groups worked to deliberately downplay the actors' supportive remarks.

Though CAA possessed a strong PR machine, during this latest storm, its efforts felt more reactive than proactive, landing it in a position where it was simply taking the hits.

Then, with their recent box office disaster weighing heavily on their shoulders, the top executives at United Artists suddenly came out accusing CAA of being responsible for their film's failure, citing Gere's interview as evidence, and they even threatened to sue for damages. Of course, such a claim was futile; United Artists merely needed a scapegoat for their tens of millions of dollars of lost investments, and CAA fit the bill perfectly. This only led to another round of verbal sparring.

...

Meanwhile, other talent agencies in Hollywood were in harmonious sync, collectively taking up their metaphorical shovels against CAA. Within a week, more than twenty mid-tier actors had opted to leave CAA. If that didn't inflict any harm on CAA, the subsequent events would certainly spell trouble internally.

The catalyst? Tom Cruise announced he was leaving CAA!

Who was Tom Cruise?

He was the most popular young star in Hollywood. Since his debut, he had delivered blockbuster hits almost without exception, with his films consistently returning massive profits for their studios. In 1986, he made a film with a budget of just over $10 million that raked in $350 million globally. His most recent film not only achieved high box office success but also garnered several Oscar nominations, and he ranked high on magazine lists of Hollywood's most powerful figures, standing shoulder to shoulder with top executives, renowned directors, and elite producers.

The departure of such an A-list star inevitably sent ripples through the industry. And indeed, Cruise's exit was closely tied to the growing controversy.

As the narrative surrounding CAA's vilification unfolded, media outlets sympathetic to Richard Gere soon shifted their focus to the negotiations concerning the male leads in Eric's latest film. In no time, with the media's digging and some cunning manipulation, the salary conditions CAA proposed for the two stars were leaked.

"$6 million plus 20% of the profits? This robbery-like offer was typical of a 'big company' like CAA to present, clearly indicating they wanted Eric Williams to back down. It seems that despite everything, Mr. Ovitz was still clinging to the ludicrous idea of 'blacklisting' Eric Williams. By proposing such unrealistic figures, he hoped to sabotage Eric's collaboration with superstars Tom Cruise and Tom Hanks. Mr. Gere's recent comment that CAA was already treating actors like pawns was not unfounded."

In truth, CAA had been steadily backing off in the negotiations with Cruise and Hanks over their salaries. Before the film's release, the profit-sharing ratio requested by CAA had already been reduced to 12%. When the media exposed CAA's initial offer, it dropped further to 10%.

Although CAA quickly clarified after the exposure that the current offers for the two stars were not so high, the media seized on the story, repeatedly making news out of it. Analysts expressed concerns in newspapers that if CAA's profit-sharing model gained traction, it would further inflate production costs for movie studios while sharply compressing profit margins, making it even harder to turn a profit. This situation would undoubtedly dampen Hollywood filmmakers' enthusiasm for making movies, posing a critical threat to the rapidly recovering American film industry.

Some media even began calling for federal investigations into CAA's market disruption behaviors. Under the influence of certain factions, a California state legislator, during a media interview, made murky statements hinting that there might be investigations regarding CAA's salary offers and allegations of monopoly behavior. Although this legislator quickly retracted their comments, it still bore significant pressure on CAA.

What industry giants fear most in America isn't the IRS; it's antitrust inquiries. Just looking at other industries, the 'Paramount Decree' once led to years of stagnation for the film industry.

...

Now, having distanced himself from Sony and Columbia and returning to power at CAA, Michael Ovitz sought to stabilize the situation. He personally met with Hanks and Cruise in separate meetings, hoping they would reconsider the profit-sharing model and instead accept flat fees to help CAA weather this crisis.

Hanks proved more agreeable, having never previously taken profit shares. He hadn't even cracked $500,000 in salary until the film Big grossed over $100 million, for which he was paid just $2 million. Since he valued his collaboration with Eric, he readily accepted.

However, Tom Cruise expressed a desire to consider the proposal. The next day, his "consideration" led to him, along with his agent Paula Wagner, announcing their departure from CAA and re-opening negotiations with Firefly Films as independent entities.

Cruise had always been an ambitious individual, and the recent storm of public opinion certainly made him feel like a pawn being manipulated by CAA. This perception was hard for a vivacious, power-hungry, and highly capable superstar to swallow.

Moreover, having tasted success, Cruise sensed an opportunity to work directly with film companies, allowing for a profit-sharing structure that would yield more benefits while also providing him more control in film production.

To achieve this without the constraints of a talent agency, leaving CAA became the first step he needed to take. However, to depart from CAA at this critical moment was akin to stabbing it in the back.

*****

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