UTA Still Struggles With Internal Discord

By CLAUDIA ELLER

May 21, 1996 12 AM PT

It’s the agency behind the precedent-setting $20-million salary of superstar Jim Carrey and the meteoric rise of America’s hottest ingenue, Sandra Bullock.

Its highly charged television department boasts one of the hottest client lists of writer/producers around.

Yet, despite its rapid growth and success as one of Hollywood’s youngest agencies, United Talent Agency continues to be beleaguered by unrelenting management strife and a power struggle that is indicative of the egomania that permeates Hollywood. If the problems aren’t resolved, the agency could be broken up when the partners’ contracts expire in less than two years.

Since its inception five years ago, UTA has been widely ridiculed by its competitors because of the upstart’s bad internal chemistry and dissension in its ranks.

The recent past is no different.

In the last few weeks, UTA has made headlines in the Hollywood trade papers for highly public feuds with two of its young agents. The company fired maverick TV agent Gavin Polone, smearing his name in the press, then apologizing days later and giving him a payoff of more than $5 million to go away.

Then, again in the public eye, UTA filed suit against Polone protege Jay Sures when the young agent tried to get out of his contract and flee what he termed “intolerable working conditions” at the agency “which threaten my future.”

Low and behold, two days later, Sures returned to the fold with a promotion he had been offered weeks earlier as the new co-head of UTA’s TV department and a contract that will free him at the end of the year instead of the end of 1997.

The stuff of juicy lunch gossip at the Ivy is, for UTA, serious business.

As its problems have escalated to critical proportions, UTA’s partners now admit they have to get their house in order if they want to continue to capitalize on the success they’ve worked hard to obtain.

“We’ve all reached a point where we looked in the mirror and said, ‘Are we f------ crazy? Let’s put this behind us and get on with growing the company,’ ” said UTA partner Jim Berkus, noting: “We’ve run hard and fast, and we’ve become a major force. It’s not unusual in that dynamic environment that people are going to have conflicts.”

As the most viable midsize agency to come along in 20 years, UTA has not only had to compete in a cutthroat market against the big three agencies--Creative Artists Agency, International Creative Management and William Morris--but has, of its own making, had the added burden of simultaneous internal battles among its various partners.

Paradoxically, its very formation in 1991 with the merger of boutique talent agencies Bauer Benedek and Leading Artists has been responsible for UTA’s financial success as well as its corporate failings.

While its detractors are quick to downplay UTA’s industry position and client list vis-a-vis its rivals, in truth, UTA--less than half the size of any of the big three, with 45 agents and approximately 1,000 clients--has put itself on the map as a formidable player. Sources familiar with its books say UTA has been consistently profitable and in 1995 took in just under $30 million in revenue.

But financial success aside, some believe the merger itself was ill conceived in that the marriage of such drastically different corporate cultures may have been doomed from the get-go. Both were small, 10-person agencies that operated in “a very informal way,” according to one of UTA’s founding partners, Peter Benedek.

Benedek, a former entertainment attorney, Marty Bauer and minority partners Jeremy Zimmer and Marty Hurwitz teamed with Leading Artists partners Berkus, Robert Stein, Gary Cosay and Rob Rothman in hopes of carving a niche as an aggressive boutique agency that would grow new talent and be a viable alternative to the majors.

“Suddenly, we were thrown together and none of us had MBAs or sophisticated management skills,” acknowledged Benedek, insisting however that UTA’s growing pains are no worse than those of CAA during its early years when the power was consolidated under Michael Ovitz.

“A lot of it comes down to egos and who was going to have control,” said one ex-partner. “When the companies merged, they weren’t paying attention to the warning signs. They weren’t meant to be partners.”

At UTA, Hurwitz left before the merger was completed and Rothman resigned about six months after it was consummated. Rothman and Stein had opposed the merger and had even considered taking legal action to stop it but never did. Stein, whose clients include director Chuck Russll (“The Mask,” “Eraser”) and Frank Daraont (“The Shawshank Redemption”), left UTA two months ago to join William Morris as a senior vice president.

Bauer had been tapped by his partners to be UTA’s president, but sources say that never set well with Berkus, who also wanted control.

Complicating matters, in 1992, a year after its formation, UTA expanded its management ranks with three senior agents from the defunct InterTalent Agency. Judy Hofflund, J.J. Harris and David Schiff became partners along with UTA’s Bauer, Benedek, Berkus, Cosay, Stein, Zimmer and Polone--inflating the management team to 10.

Getting that many people to agree on how the agency was to be run would prove to be a major nightmare for years to come, according to a number of inside sources.

Last year, UTA hired a corporate shrink to help management solve its problems, but it was to no avail. Several partners--including Polone, Harris and Hofflund--hatched plans to leave, but stayed as they were contractually bound.

Polone, for one, was upset that he made less than the senior partners who earned less than they were taking out of the company.

Under their original seven-year contracts, all four senior partners, Bauer, Benedek, Berkus and Cosay, take home the same salary--said to be around $2 million a year--and split profits at the end of the year after everyone else gets paid. Sources say the partners have 10% annual raises built into their deals.

According to a former UTA agent, “The fights have always been over money and power and how to split up the compensation.”

While sources recall that at one time Zimmer also complained loudly about his take, the agent denies it: “I’ve never had a problem about money. That’s never been my beef. We’ve all struggled with how to get along and how to move forward together.” UTA’s founding partners also deny that, other than with Polone, there have been any fights about money, though several sources say otherwise.

“Money has never been an issue among senior management,” said Benedek, and Berkus added: “We don’t run this company by financial formulas. Agents aren’t paid according to dollars in, dollars out.”

Money aside, UTA’s biggest problem right now is having to concoct a management structure that will work. Presently, there’s no leader.

In January, Bauer stepped down as president when it was clear that his control was slipping. He became part of a seven-member management committee that was to run the agency. Bauer, whose relationships with Berkus and Benedek had eroded, became the odd man out.

The upheaval at the agency in the last few weeks has led all of the partners to try to come up with a more workable plan.

“We’re now in the process of meeting to contemplate a new management structure that will alleviate the tensions among the partnership,” said Bauer, noting that as president, “my mandate was so nebulous--I didn’t understand what my job was--the ambiguity was making it impossible for me to do my job.”

Bauer, Berkus and Benedek all claim they’ve put their differences behind them and are ready to move forward to save the agency.

Bauer, who had been thinking of suing his partners when they fired Polone and cut him out of the loop, admitted that while the original merger was “not ill conceived on a business level, it was somewhat ill conceived on a personal level.”

But he added: “We’ve survived in spite of ourselves. If we just got out of our own way, it would really be spectacular.”