CAA's pioneering packaging model started out to promote their TV shows.
In the '70s, the newly formed CAA faced suppression from their old employer, WMA, and had pitifully few artists on their roster. To quickly find work for their clients and keep the fledgling company from falling apart, CAA president Michael Ovitz and others took a different tack: bundling suitable talent with strong scripts and pitching the whole package to major networks.
This packaging approach—breaking from the tradition of casting actors first and then tailoring scripts—unexpectedly succeeded and gradually expanded into film production.
In 1982, CAA's packaged film Tootsie was a box office smash, claiming second place on the North American charts that year (behind E.T. the Extra-Terrestrial), solidifying packaging as CAA's core business model.
As CAA grew, amassing more top stars, the agency became increasingly aggressive in Hollywood. Not only did they demand skyrocketing salaries for their talent, but by taking commissions from overall project budgets, they skirted regulations barring agencies from production involvement, further inflating film and TV costs.
Thus, Hollywood's major studios grew wary of this model, which steadily eroded their control and profits.
As a century-old powerhouse, WMA had recognized the threat of CAA's innovative approach in recent years. But due to the company's deep-rooted conservatism and brokers operating in silos without collaboration, WMA hadn't kept pace.
It wasn't until earlier this year, when two key executives passed away, sparking internal turmoil and a mass exodus of top stars, that WMA woke up.
Then, Simon's The Butterfly Effect, pushed by Jonathan Friedman, coincidentally became WMA's first packaged project pitched to Hollywood studios.
Though WMA had lost many top stars in recent months, its overall scale still dwarfed CAA's.
CAA, the fastest-rising Hollywood talent agency in years, still had only about fifty brokers and just over 600 clients. In contrast, WMA's 180-plus brokers represented more than 3,000 artists.
CAA's packaging already threatened the studios; if Hollywood's largest talent agency shifted to this model too, it was easy to see how film companies would grow even more passive in production.
Due to these concerns, while The Butterfly Effect impressed many studio execs, a week passed—the usual time for responses—and none of the majors had committed.
It was now mid-July.
At Paramount's headquarters in downtown Hollywood, on a Tuesday afternoon.
With this summer's two releases, Top Gun and Ferris Bueller's Day Off, both smashing successes, Paramount president Sidney Ganis had been riding high, finally shaking off the gloom from the departures of Barry Diller, Michael Eisner, Jeffrey Katzenberg, and others over the past couple years.
Hit by those executive exits, Paramount's top film last year, Witness, had only grossed $68 million. Many in the media mocked Gulf+Western chairman Martin Davis for driving away Diller and crew, predicting Paramount's downfall.
Now, with the studio revitalized, the hot-tempered Martin Davis had stopped hounding the execs like mules, making life easier for everyone ahead.
Warmly ushering in the visiting Jonathan Friedman, Sidney Ganis waited for his secretary to serve coffee, exchanged pleasantries, then got to the point: "Joe, honestly, Paramount wants The Butterfly Effect script badly, but we can't accept WMA's overall package."
This wasn't Jonathan Friedman's first studio visit today—he'd just come from Warner Bros. Hearing Sidney Ganis echo Warner president Ed Morley's words almost verbatim, Jonathan was now certain the Hollywood majors had colluded against The Butterfly Effect beforehand.
On the surface, though, Jonathan remained composed. "Sid, you can see this is an outstanding project, and WMA's assembled the best creative team we can offer."
"No, I wouldn't say that," Sidney Ganis shook his head. "Take Brian De Palma—he's botched two big-budget films over $10 million each. Paramount can't trust him with this one."
Jonathan countered, "Sid, Brian's last two films didn't do great at the box office, but they weren't flops. And the blame isn't all his. Like Wise Guys earlier this year—MGM stuck it in a dead April slot with just over 300 screens. Even so, it pulled in $8.5 million, proving Brian's chops. Plus, The Butterfly Effect is right in his wheelhouse."
Sidney Ganis sipped his coffee, shrugging. "Okay, even so, WMA's asking $2 million for directing—way too high. Paramount tops out at $1 million. And that writer..."
Saying this, Sidney set down his cup, grabbed a file from his desk, and sat back on the reception sofa, handing it to Jonathan. "Simon Westeros, right? Clearly a total newbie with no credentials. So we can't go for the $200,000 script quote—too steep. $100,000 max, and that's for two scripts: $80,000 for The Butterfly Effect, $20,000 as... uh, option money for Final Destination. Heh, digging up this guy's scripts from the WGA took some effort—there's another one, but it's trash, barely a story. As for Final Destination, it's just an outline, but the idea's solid. Anyway, these are outright buys. Simon Westeros isn't a guild member, so Paramount doesn't have to give him video or TV residuals per the basic agreement."
Jonathan Friedman silently flipped through the file, sensing a clear malice in Sidney Ganis's terms.
But once Sidney finished, Jonathan pressed unwillingly, "So, Sid, what about the lead? How do you feel about Matthew?"
Sidney Ganis smiled oddly, nodding almost without pause. "Ferris Bueller's Day Off did so well—we'd love to work with Matthew again. $5 million's steep, but he's worth it."
Hearing this, Jonathan Friedman finally confirmed: Paramount was targeting him, the initiator of WMA's first package, even aiming to sabotage the whole project through these petty tactics.
After all, Brian De Palma and Simon Westeros were both his clients, their combined pay less than half of Matthew Broderick's. Paramount haggling over their fees while readily agreeing to Matthew's $5 million was clearly meant to stir internal discord at WMA.