AGENCY CATFIGHT OVER ALICIA KEYS: WME And Her People Say She Hasn’t Gone To CAA; But CAA Tells Hollywood She Has

Well, well, well… I don’t think I’ve ever seen this before. CAA believes tonight that it signed Alicia Keys away from her longtime agent, WME co-CEO Dave Wirtschafter. But WME and Alicia’s people say it ain’t so. I just got word that Keys’ manager Jeff Robinson, with Alicia sitting by his side, issued this statement: “No official decision has been made yet.”

Here’s what happened behind the scenes: Robinson has been “entertaining the notion”, in the words of one of my sources, of different representation for Keys. Meetings were taken, and CAA believed it had signed the superstar singer/musician as of today and began telling Hollywood. But Wirtschafter had been led to believe that no decision had yet been made by Keys or her manager who’d promised him one last meeting where he would be given the opportunity to save the client. So, now you can see why both agencies think they’ve got Alicia Keys on their client rosters.

No doubt this situation will sort itself out within a few days.

MGM Makes Phone Plea To Bondholders To Stay Alive; Both ‘Hobbit’ And James Bond In Peril; Bondholders Tell Studio To Go Bankrupt; MGM Calls That Worst Possible Outcome

I’ve collected several knowledgeable accounts of what happened during yesterday’s multi-hour contentious MGM conference call with bondholders who were “very loud and very upset”. Here’s why:

The call was for the benefit of the lenders, and MGM management made the presentation along with Stephen F Cooper, that Zolfo Cooper restructure specialist. MGM made a desperate plea for money because the studio had missed its numbers and was going to be out of funds very soon. “The implication was that it’s teetering on bankruptcy,” one source told me. MGM said it needed $20M in short-term cash flow to cover overhead, and an additional $150 million to get through the end of year and continue funding its projects, and to start Peter Jackson’s Hobbit.

Some say the call lasted 6 1/2 hours. Others said it lasted 2 1/2 hours with lenders, and then the lenders themselves had a conference call that lasted another 2 hours. After the MGM presentation, several bondholders spoke, “and they were irate”, an insider tells me. True, this regularly happens on bad news calls like this. But in this case the creditors who hold MGM’s term loan debt blame Harry Sloan for MGM overpromising and then missing its numbers, which was discussed during the summer and why he was removed as CEO. “They’re not happy that Sloan let the company go in this direction but they understand what’s going on. It’s unfortunate, but they get it that the company is in a distressed situation, and they have to figure out an action plan moving forward,” a source explains to me.

The conference call was planned to present the creditors with a request, or forebearance, to waive interest payments on MGM’s $3.5 billion killer debt until February 2010. Because if MGM doesn’t have to make those interest payments, then the studio can afford to use that money instead to fund the production slate. The bondholders couldn’t understand why the equity holders wouldn’t fork over the dough. But the equity holders aren’t interested in writing a check because they understand that their equity is way under water already, and there’s no upside for them. So, in essence, the equity holders have already written off their investment in MGM. But the bondholders have that $3.7 billion of nominal debt currently trading in the secondary market at about $.55–$.57 cents on the dollar. It’s been trading in this low $.50s range for a while, so the marketplace is saying that the company is not worth more than $.56 times $3.7 billion. (And that’s probably high.)

As a result, the bondholders are not in a great situation and therefore not feeling generous. On the other hand, if MGM were sold off today, most investment bankers don’t think it would fetch more than $1.5 billion to $1.75 billion at auction. This would mean that bondholders would recover less than $.50 on the dollar. This would be an even worse outcome.

So the bondhholders said to MGM, in essence, that they were going to let the studio go bankrupt and collect their money since they’d be first in line to get paid. But Cooper explained that this would be the worst possible outcome for the creditors and the company. Because if MGM were forced into bankruptcy, then it would lose James Bond and the studio doesn’t think it can stay alive without 007. Also, a lot of other issues would surface that would tremendously hurt MGM.

Also, if MGM goes through bankruptcy, that’s a very expensive prospect (where only the lawyers get rich), and extremely disruptive (since who would do business with MGM in the interim) and won’t get the creditors what they want which is their money back. It’s more than simply MGM losing Bond. The studio could lose a lot of other franchises.

I can’t tell you whether the bondholders will agree to the forebearance or not. It requires a 51% approval vote. But some of the smart people I’ve contacted do think the creditors will eventually realize that a restructuring of MGM outside of the bankruptcy process is probably the best course right now.

So what’s next? MGM now has to formally ask for forbearance, and the bondholders formally respond.

Tom Ortenberg Exits The Weinstein Co

The company and Tom Ortenberg say he asked to leave TWC for “personal reasons”. This news comes against a backdrop of financial drama at TWC including a new round of layoffs to get the company down to 90 people. But the president of theatrical films just told me, “I asked for and was granted a release from my contract with The Weinstein Co. My last day with the company will be September 30th. I want to thank Bob and Harvey fo the terrific opportunity they gave me this past year, and I am particularly proud of my collaboration with them and the incomparable Quentin Tarantino on Inglourious Basterds which has truly been one of the highlights of my career. I will have an announcement about my plans in the near future.”

Ortenberg came to TWC in January after he left Lionsgate as the president of theatrical films. He’d been Lionsgate’s first employee in Los Angeles, opening an office in Santa Monica in 1996 staffed only by himself and a part-time assistant. Based in LA, Ortenberg was in charge of TWC’s theatrical, marketing, distribution, the whole gamut, and reported directly to Harvey and Bob.

UTA Signs Oscar Winner Anthony Hopkins

Back in May, CAA signed Anthony Hopkins back from Endeavor, which only had him since November 2008. But Tony has been at every major agency, and more than once. Then he left CAA this month. Then he signed with UTA. Confused? So am I. But he’s still an Academy Award winner. So I heard Hopkins got a standing ovation when he made a surprise visit to the UTA staff meeting this morning. I’m told he will continue with his UK agent Duncan Heath and his lawyer Mitch Smelkinson.

Jay Leno Slips Into Last Place Against Real Competition, Not Just Repeats

Yeah, this was a GREAT idea, Jeff Zucker. Once again, just like last season, NBC ranked fourth in primetime Monday, dead last among all the broadcast networks, with a weak 2-hour Heroes premiere that fell 46% from last year’s opener. At 10 PM, The Jay Leno Show attracted only 5.7 million viewers, but most importantly fell to 1.8 (for 3rd position, since Fox doesn’t program at 10 PM). It had recorded a low of only 2.0 last week during its debut. Nor can NBC save face by boasting about Jay’s demographics since he skews older. As I noted at the time, it was ridiculous for NBC to be crowing about Leno’s “highest-rated” numbers last week when it was only up against repeats. Facing competition this week, the show folded like a house of cards. Which sums up Zucker’s running of the broadcast network, doesn’t it? I can’t imagine why any advertiser would choose Leno over CSI: Miami at 10 PM. The experiment failed.

As Rumors Swirl and GE Probes, Vivendi’s Levy Says IPO Possibility For 20% NBCU

In just the past week, I’ve heard rumor after rumor about what may happen to NBC Universal because of the Vivendi put option coming due. One crazy rumor claimed Viacom and GE would merge Paramount and Universal — just the movie studios — into one company of best assets. (That was denied by insiders at both conglomerates.) Another saner rumor had Comcast buying Vivendi’s 20% stake in NBC Universal. (That seems within the realm of possibility, but unlikely, too.) Yet I can tell you that GE recently has been asking Universal for more and deeper financial info than ever before. And it’s all related to the Vivendi put option. Every November, Vivendi can trigger a right to sell its 20% stake in NBCU, either in the market or to NBCU’s parent General Electric. The conventional wisdom, as yet unconfirmed, is that Vivendi may decide to sell this year because it’s more interested in expanding into telcom than hanging onto a non-core asset like media. So all eyes were on Vivendi CEO Jean-Bernard Levy today when he spoke at the Goldman Sachs Communicopia media conference. Levy made mention of the improving economic situation for media. “Last year there was turmoil and we didn’t know where the market was going, and the advertising market was not in our favor. The next window is in a little more than two months, you will know more at that time,” he said coyly. “An IPO is possible, if we do exercise the put option we go and prepare for an IPO.

Unless GE uses a pre-emption right and buys us out at a price. It can go that GE buys us out or at the end of several months the company goes public, assuming we do exercise. But you understand a decision has not been made.” Broadcasting and Cable at noon quoted one senior level executive at the Goldman conference as saying that the wide expectation is that Vivendi wants to “turn the paper into cash”. Last year, Levy also teased investors about its intentions, and did nothing. So why does Vivendi hang on? Because the dividend flow it receives from NBCU is “very good”. Vivendi’s option to sell a max $4 billion of NBCU shares runs from November 15th to the Friday of the first week of December. But GE can preempt it by buying back the stake which GE chief Jeff Immelt last year said he “would do in a heartbeat”. Vivendi obtained the stake in 2004 when it sold its Universal Studios, USA and SciFi Networks, and other media assets, to GE. Meanwhile, I hear GE is talking to analysts tomorrow. At least NBCU parent company’s stock price is rising dramatically this week.

EXCLUSIVE! Dick Cook Fired From Disney; Hollywood Registering Shock At News; “Never Saw It Coming” vs “Had A Choice”

Here’s what I’m hearing now from deep inside Disney. That today’s date to announce his exit was chosen by Dick Cook. That Bob Iger was at Wal-Mart all day so there wasn’t an 11th-hour meeting with Cook. Disney insiders continue to insist Dick wasn’t fired. Instead, as one of the sources stresses, “He had a choice, He just didn’t see eye to eye with Bob on how to run the studio. Dick wanted to run the studio his way.” But it didn’t come as a surprise to toppers that Cook chose to step down rather than change the way he ran the studio. “In the last 5 years since Bob’s been CEO, the biggest resistance to change has came from the studio as an institution. They were the last ones who realized that things needed to change. Even when Bob cited the performance of the motion picture division to analysts last May as one reason for Disney’s poor results. (Specifically, Iger said “studio performance was disappointing, something they would be the first to admit.”) The insiders also confirm that Dick called the staff meeting, but claim he only said he’s stepping down and then read his resignation statement (see below). The insiders also maintain Cook didn’t tear up but, yes, he got emotional. And that Dick never characterized his relationship with Iger. “Dick is very likeable, and he and Bob have a very cordial and very good relationship on a personal level,” one of the sources just told me. There is also confirmation that the people who work inside Walt Disney studios are upset about Cook’s abrupt departure.

I hear that Steven Spielberg is devastated by the news of Dick Cook’s ouster. Dick was a major reason why Spielberg and Stacey Snider brought the new DreamWorks to Disney. “Steven worships Dick,” an insider told me tonight.

And now Cook’s ouster may imperil a 4th Pirates Of The Caribbean movie. Noting that Cook first enticed him with the Pirates movie idea and there’s no firm deal in place for No. 4, Johnny Depp said in a phone interview from London with Claudia Eller: “There’s a fissure, a crack in my enthusiasm at the moment,” Depp said. “It was all born in that office.”

Depp used words like “shocked… very sad” to describe his reaction when Cook called him a few hours ago to break the news. “He is the utmost gentleman, so he made the call himself. He said, ‘I’d like you to hear it from me before you hear it from someone else or read it. He said today was my last day. He didn’t give me a reason… I didn’t see this coming. There was no reason to see this coming.” Depp said “I consider Dick a friend inside an insane system. He’s instantly trustworthy. And you generally don’t meet people at the studios you trust,” Depp said. “He’s a rare beast.”

Sources are telling me that, after his meeting with Bob Iger, Dick Cook called a staff meeting — “a big, big room full of people” — and told them that he’d been fired after 38 years at Disney. Then Dick teared up. He explained his ouster by saying that he and Iger had never had a close relationship where they’d been on the same wave length. (However, Disney sources, including one of Cook’s still-in-place aides who was at the meeting as well, dispute this account.)

But Dick is freely telling his account around town tonight. And one thing that can’t be denied is that Cook’s firing is “playing very badly” on the Disney lot as well as around Hollywood. I’ve been deluged with calls and emails by prominent biz people expressing disbelief.

Disney is adamantly telling people tonight that Dick Cook was not fired. But that’s not what Cook himself is telling Hollywood. I’m told that he was called in to see Bob Iger and given the news that “it was over”. “He got blindsided by Iger. He never saw it coming,” one source who just now spoke to Cook tells me. However, several months ago, rumors were floating that Iger was going to fire Cook because of the motion picture division’s recent record of failures (along with some big successes) at the box office. When I asked top execs about this, I was given firm denials. (Then rumors began that Oren Aviv would be axed. Again, denials.) Iger himself talked to analysts about the motion picture division problems which pulled down Disney’s earnings of late. “Iger has no reason to be happy with the label,” a Disney insider tells me. “Choices have been made that not only are unspectacular, but even poor. Not only have the movies lost money, which can happen to anybody, but they’ve also diminished the live action brand.”

There can be no doubt that Cook was one of the most popular executives ever to work in showbiz. Tonight, Hollywood can’t believe this has happened, especially on the eve of Rosh Hashanah. “I’m shocked by Dick’s ouster. I love him more than life,” one Disney insider told me, adding, “I walked out of a meeting and heard this. And, 4 minutes later, you post it.” It’s reminding old Disney hands of the day when Michael Eisner blindsided Jeffrey Katzenberg by firing him. “If your mandate if is to up the Disney brand, then how do you fire somebody who has 38 years of institutional brand knowledge of Disney?”

Naturally, the guessing game of who would replace Cook began immediately. “I don’t know who Iger thinks he can find who’ll be able to come in there and already have relations with Spielberg, and Zemeckis, and Bruckheimer, and Lasseter, and Burton, like this guy had.” And then there is the fact that so many divisions report to Cook that his replacement also must be an experienced administrator as well as have deep talent relations. And that ain’t easy.

There’s been a lot of talk that Marvel Studios President Kevin Feige spent a lot of time with Disney CEO Bob Iger during the dealmaking to buy the company, and Feige impressed the hell out of Iger. Of course, there’s also the new DreamWorks CEO Stacey Snider whose resume includes running Universal, after all, and who could further cement Steven Spielberg’s control at his new moviemaking home. (“But she can’t. She’s a long-term partner with Steven and Reliance in DreamWorks. She not available,” said a DreamWorks spokesperson.)

Sunny No. 1 For Family Film ‘Meatballs’; Foul Friday For Hollywood Stars’ Flops

Mamma Mia! Talk about a spicy meatball: now that’s one fair weather 3-D toon! By comparison, all the big Hollywood stars of the moment flopped in their 2-D films despite allowances for middling releases. Although you wouldn’t know that by the spin every studio has given me this morning. Do they think I fell off the turnip truck? So let’s get down to the numbers.

1. The beloved children’s book turned Sony Pictures Animation’s movie Cloudy With A Chance Of Meatballs scored an easy No. 1 by attracting not just kids but also tweens, teens, and twentysomethings as well as parents to Friday’s North American screenings at a record 1,828 3-D sites, including 127 Imax locations. That’s why four-quadrant family films like this are such a favorite of Hollywood. All day and night, Sony kept upping its box office predictions as the money just kept rolling in. By Saturday morning, sources told me the studio was looking at $8.1 million for Friday’s opening in 3,119 theaters, which bodes well for a $30M debut weekend. It all depends on the West Coast tonight and the Saturday matinee family bump (+60%?). No matter, the movie really works. Cloudy scored a CinemaScore of “A-”, and “A” for the under-24 set. Plus, the marketing campaign for it was sassy (not stupid like too many other family films).

2. Warner Bros’ R-rated caper comedy The Informant! featuring Matt Damon playing against type (bumbling vs Bourne), and directed by Steven Soderbergh (who can’t direct a cash cow anymore) was a distant No. 2. With a CinemaScore of only “C-”, it opened to $3.6M Friday in 2,505 runs for a paltry estimated $11M weekend.

3. Tyler Perry’s holdover I Can Do Bad By Myself for Lionsgate placed 4th with a $3.1M Friday (-65% from a week ago) and should get to $9.5M and 3rd by weekend’s end.

3. Relativity’s and Universal’s 50/50 mawkish romance Love Happens showcasing Jennifer Aniston and Aaron Eckhart placed 3rd with a weak debut of $3M in 1,898 venues. With a CinemaScore of “B”, it could be just a $9M weekend.

4. And not even Megan Fox’s body could tempt moviegoers into Twentieth’s R-rated feminist horror flick Jennifer’s Body, DOA with $2.8M Friday from 2,707 dates and a CinemaScore of “C-”. It probably will do a pathetic $7M weekend for No. 5. As a 20th exec emailed me, “Jennifer’s Body only cost $16M and is the last of the Fox Atomic films.” Thank gawd. Worse, it shows that screenwriter Diablo Cody may be a one-hit wonder.

The rest of the Top 10 for Friday were holdovers.

6. 9 (Focus) Week 2 [2,060] $1.5M Friday (-52%), Est Wkd $5.5M
7. Inglorious Basterds (Wein/Uni) $1.2M Fri, Est Wkd $4.5M
8. All About Steve (Fox) Week 3 [2,159] $1.1M Fri, Est Wkd $3.5M
9. The Final Destination (Warner) Week 3 [1,805] $1.1M Fri, Est Wkd $3.5M
10. Sorority Row (Summit) Week 2 [2,591] $925K (-53%), Est Wkd $2.8M

WME Go Hard At Fired Agents: Agents Go Hard At WME Right Back For Salaries

This is a case of “Don’t get mad, get even” Hollywood-style. Last month I had the exclusive news that WME sent bad news letters to certain laid-off William Morris agents who found work at CAA, UTA, ICM and Paradigm. The point of the missives was to cut off these agents from receiving whole or part of their William Morris salaries because they’d signed contracts calling for mitigation. (This meant that if the tenpercenters had time left on their deals and could find work as agents elsewhere, then WME would be on the hook for paying them the salary difference between their new jobs and their old ones.) WME claimed those letters went out to “only” those agents playing fast and loose with the mitigation terms. (For instance, if an agent making $250K at Morris went to work at a rival agency for a new salary of $25K, WME had to pay $225K for the life of the Morris contract. That’s not how mitigation is supposed to work.) But rival agencies suspected that WME was using economic duress to cut deals only worth $.70 on the dollar with those agents lucky enough to find jobs in this tough market.

Understandably, the agents receiving these WME letters first began freaking out. Then four of them fought back. Their attorney, Century City pitbull litigator Bryan Freedman of Freedman and Taitelman, filed and immediate demand for arbitration. This time, it was former Endeavor, and now WME, business affairs exec Tom McGuire’s turn to freak out. I hear he called Freedman to express shock and complain that the attorney was asking for arbitration so quickly without trying to negotiate first. To which Freedman reportedly responded, “Your WME letters didn’t say, ‘Hey, give me a call.” They said, “We’re not paying you starting immediately.’”

In fact, WME didn’t stop paying the agents. And the agency now has backed off its threat and will continue to compensate the agents according to the contracts. (Unless WME can prove later the tenpercenters were gaming the mitigation system. An investigation will continue). Oh, and did I mention that Freedman’s hiring was approved by WME’s competitors, UTA and ICM? “WME acted like bullies — and they got bullied right back,” one rival agent gloated to me. “Ari made a big thuggy threat. But he had to cave when he realized the downside was too great. Now everybody’s getting paid fully.”

Game, set, match.

Big Morris Earners Jim Griffin And Paul Bricault Pushed Out By WME; Layoffs Coming In China, Miami, Sports

There may be 15 to 18 agents laid off in coming weeks at WME. The Morris China office is closing. Miami will be kept open but with a miniscule staff. Sports will be gutted if not shut down.

I hear that WME co-CEO Ari Emanuel flew to NYC to personally have that wrenching “you’re out” conversation with 30-year Morris veteran Jim Griffin who’s under contract until January. The agency has promised to find him a gig. “No one is enjoying the process, but you can’t be afraid of tough decisions in these economic times,” an insider tells me. This layoff was a big deal internally because Griffin is a former WMA board member with big clients like Regis Philbin and Emeril who made gobs of money over the years for the Morris agency and transformed Griffin into one of the highest grossing tenpercenters there. But WME showed him zero loyalty and figured that all the money that needs to be made off packages like Regis & Kelly is already coming in.

Paul Bricault was the former William Morris board member, EVP, and head of Morris Worldwide Consulting, working over the years with MySpace, General Motors, Anheuser-Busch and others. Now Endeavor’s Mark Dowley will run the department.