Recession axe hits Hollywood

LOS ANGELES - Some of Hollywood's top power-brokers are being forced to cancel power lunches, trade in their Porsches, and get used to life without a personal assistant, as talent agents become the latest breed of white-collar superheroes to fall on hard times.

More than 100 employees at William Morris, the Beverly Hills firm that represents some of the biggest names, were made redundant this week, in one of the greatest bloodbaths the cut-throat industry has seen.

The move came as the US Federal Trade Commission approved a merger between William Morris and its former rival Endeavour, creating a "super-agency" which represents more than 1000 of the world's most famous actors, writers and directors.

Lay-offs were expected since the two firms announced plans to join forces to ride out the economic downturn and challenge the dominance of CAA, Hollywood's long-standing market leader.

But the scale of the redundancies surprised many observers.

Rival agencies are now circling clients of both businesses, hoping to lure away their most lucrative stars.

William Morris represents the likes of Kanye West, Britney Spears and Russell Crowe; Endeavour's stable boasts Robert De Niro, Matt Damon and Adam Sandler.

"The fallout hasn't really begun. There's been a trickle, but I expect a waterfall in the coming months," said Frank Wuliger, a partner at the Gersh Agency. "When agents get fired, the actors they represent think again, because the agent-client relationship is intimate; it's like a marriage."

Recent reports suggested William Morris sports agent, Lon Rosen, who represents basketball star Magic Johnson and baseball's Alex Rodriguez, may also leave. The future of the firm's ex-chief executive, Jim Wiatt, is also unclear.

"Tenper centers", as agents are known, are notoriously sharp-elbowed, and many small firms such as Gersh now hope to convince former Endeavour clients that the new firm, WME Entertainment, will no longer offer the "boutique" service they had enjoyed.

Kevin Spacey was among the first casualties of the new era. He announced that, after years with William Morris, he was joining CAA. By way of response, WME announced its first new signing, stealing the Lost star Matthew Fox from ICM.

The turmoil comes as agencies weigh the cost of the recession. Box-office revenues remain robust but DVD sales have slumped.

And the once extortionate salaries offered to actors and writers are being slashed. "All you ever need to do to know what's happening in Hollywood, is to follow the money," said an agent at a leading Beverly Hills firm, who was not authorised to speak publicly. "Look at this year's box office: fewer hit films are star driven. People are buying into concept movies like Terminator and Transformers. The days when $20 million-a-film deals happened each week are gone. Bluntly, that means fewer jobs for agents."

- INDEPENDENT