Agency Shuffle Lights a Fuse : William Morris Snags Jim Wiatt, Former ICM Exec

William Morris Agency on Monday hired Jim Wiatt, the just-departed co-chief of International Creative Management, as president and co-chief executive, a move that is expected to set off a war among Hollywood’s major talent agencies.

Wiatt replaces former president and movie chief Arnold Rifkin, whose failure throughout the years to sign top stars and directors kept the agency a distant third to its more aggressive rivals ICM and Creative Artists Agency.

Although Morris is looking to Wiatt to bolster its sluggish movie business, his duties as co-CEO give him much broader authority than Rifkin had over the entire agency, including television and music.

Wiatt is expected to bring with him 25 clients, including such stars as Eddie Murphy, Sylvester Stallone and Tim Allen, as well as directors Nora Ephron, Renny Harlin, Richard Donner and Penny Marshall.

Several top talent and literary agents from ICM are also expected to join Wiatt once their contracts expire, bringing even more marquee names to the Morris roster.

The latest shake-up is part of what is turning into one of Hollywood’s most chaotic years among its executive ranks. Within the last three weeks, three of the industry’s most senior managers--Warner Bros. chiefs Bob Daly and Terry Semel and talent agent Wiatt--all left jobs they had held for the last two decades.

The changes stem in large part from a cost consciousness that’s rippling through every facet of the entertainment business. That includes agencies, which have seen studios cut back on the number of films they make, leaving fewer jobs for actors, directors, writers and producers.

Like studios, some agencies have also had to cut costs by trimming their ranks. In addition, agents have been under siege from talent managers, who operate under looser rules than agents do. In some cases, stars are employing managers rather than agents as their sole representatives.

Once the most powerful talent agency in the world, William Morris in recent years has fallen behind CAA and ICM, which between them boast a bigger array of top-drawer stars and directors, from Tom Cruise, Tom Hanks and Julia Roberts to Steven Spielberg, Robert Zemeckis and Jim Brooks.

Yet the 101-year-old Morris, Hollywood’s oldest agency, is a sleeping giant because it has much bigger financial resources than its competitors. It has substantial real estate holdings, including three major office buildings in the heart of Beverly Hills, and it continues to collect commissions from deals dating back to the days of Al Jolson, Elvis Presley and the hit TV show “MASH.”

Despite the problems in its movie division, Morris has one of the more lucrative television and music businesses among its competitors.

Industry insiders expect that Wiatt’s appointment will set off a war with ICM Chairman Jeff Berg, with whom he’s had long-simmering tensions. That strain in good part prompted Wiatt to quit ICM on Friday after 22 years with the agency. He spurned a new contract offer from Berg after seeking significantly more money and additional decision-making power--both of which he’ll have at Morris.

“They will let me run the company. . . . I think I can make a big impact there,” said Wiatt, who signed a five-year deal with Morris after a Sunday meeting with the agency’s top brass at the home of Walter Zifkin, with whom Wiatt will share the CEO title.

An ICM spokeswoman said Monday that the agency would have no comment on Wiatt’s announcement.

Wiatt, 52, gets stock in the privately held company and replaces Rifkin as one of the agency’s 11 board members. He oversees an agency that has 235 agents and claims about 4,000 clients worldwide in offices in Beverly Hills, New York, London and Nashville.

Wiatt is expected to revamp some key areas of the company, specifically the motion picture divisions both in Beverly Hills and New York. That could result in a number of senior agents being replaced.

Wiatt, however, said he will take his time to evaluate the operation.

“I don’t want to get in there and create havoc,” said Wiatt, who officially starts today even though the agency has yet to find him an empty office. “I’m sure there will be people I can hopefully recruit, but I’ll take my time and figure that out,” he said.

Morris, which built its name on such megastars as Marilyn Monroe, Elvis Presley, Sammy Davis Jr., Frank Sinatra and Mae West, enjoyed another heyday in the 1970s and 1980s with clients who included Tom Hanks, Kevin Costner, Julia Roberts and Barbra Streisand. The legendary Morris mail room also spawned such industry luminaries as entertainment moguls David Geffen and Barry Diller. Uberagent-turned-manager Michael Ovitz started his career as a TV agent at Morris.

After the death of veteran talent agent Stan Kamen in the mid-1980s, Morris’ movie business was decimated when rival agencies raided some of their biggest clients and agents. Eventually, a number of other top agents defected to CAA and ICM, taking with them such star clients as Roberts, Hanks and Costner.

In 1992, in a desperate move to revitalize its business, Morris acquired Triad Artists, a mid-sized talent agency run and co-founded by Rifkin, a former fur salesman.

Initially Rifkin--who openly discussed entering therapy to tame his infamously explosive temper--galvanized the demoralized movie division with New Age mantras such as “Change channels, turn up the volume” and “Commit and execute.” Because Rifkin felt there was so much “negativity” in the historic Morris conference room, he refused to hold meetings there until he personally purchased Ralph Lauren bedsheets to cover the chairs to give the room a new feel.

The agency scored some successes with the comeback of star John Travolta and its work on such independent films as “The English Patient.” But Rifkin’s inspirational speeches soon became the butt of jokes both inside and outside the agency. Rifkin, 52, has never been considered on a par with the heads of the other top talent agencies in terms of any far-reaching influence in Hollywood.

When it came to signing big stars and big directors, which Morris sorely needed, Rifkin fell short. One of his biggest signings was a non-movie client, clothes designer Tommy Hilfiger, along with Wesley Snipes and Whoopi Goldberg.

Rifkin also had stylistic and personality clashes with some of Morris’ top brass.

He damaged morale at the agency in 1996 when his secret negotiations to replace Mark Canton as the movie chief at Sony Corp.-owned Columbia Pictures surfaced. The handshake deal that Rifkin had with Sony’s then-entertainment chief, Alan Levine, was quickly rebuked by Sony President Nobuyuki Idei.

One Morris insider said that above all, the agency’s board had been “unhappy [with Rifkin] for the last couple of years,” largely because of his inability to sign top talent.

Rifkin was informed by Morris management on Sunday that Wiatt had been hired.

In an interview, Rifkin denied that he clashed with the board and said he had no knowledge of its unhappiness with his client signings.

“I don’t believe that. If that’s the case, they haven’t told me that,” Rifkin said.

He defended his work for clients such as Bruce Willis, star of last weekend’s top-grossing film “The Sixth Sense.” Rifkin said Willis “is staying in my life,” and Willis released a statement supporting Rifkin.

Rifkin said he has no immediate plans, but sources said he might join a production company he recently helped form involving former Walt Disney executive David Hoberman that also might include Willis.

Rifkin said he could have remained at the agency if he had wanted. Rifkin was not privy to the talks with Wiatt but said he sensed something was up.

“It would be naive to think they weren’t in conversations with Wiatt before Sunday,” Rifkin said.

A number of Morris agents expressed delight at the news of Wiatt’s appointment, which had been rumored for weeks.

“Everybody usually hates Mondays, except today,” said one top agent. “All my colleagues seem very, very upbeat and energized.”

Zifkin said he believes Wiatt “is going to re-energize the motion picture division and the whole company.”

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Talent Competition

No. 1: Creative Artists Agency

* Agents: Approximately 125; clients: about 1,200

* President: Richard Lovett

* Biggest clients: Tom Cruise, Tom Hanks, Brad Pitt, Will Smith, Mike Myers, Gwyneth Paltrow, Meryl Streep, Drew Barrymore, Madonna, Oprah Winfrey and Steven Spielberg

* Major strength: Best client list; strong management team remained after founders Michael Ovitz, Ron Meyer and Bill Haber left.

* Major weakness: Self-declared war with Ovitz has caused some client defections and could cause more.

*

No. 2: International Creative Management

* Agents: 125; clients: 3,400

* Chairman: Jeff Berg

* Biggest clients: Julia Roberts, Mel Gibson, Jodie Foster, Michelle Pfeiffer, director Jim Brooks and “Friends” creators Bright/Kauffman/Crane

* Major strength: Big movie stars and directors, and lucrative television packages.

* Major weakness: Lack of agencywide unity and threat of losses as Jim Wiatt moves to William Morris.

*

No. 3: William Morris Agency

* Agents: 235 worldwide; clients: 4,000

* Co-CEOs: Jim Wiatt and Walt Zifkin

* Biggest clients: John Travolta, Clint Eastwood, Bruce Willis, Arnold Schwarzenegger, director Gus Van Sant, Bill Cosby

* Major strength: Television and music.

* Major weakness: Motion picture division suffers from shortage of top stars and directors as well as strong leadership.