Over a May 15 lunch at the Beverly Wilshire hotel, William Morris Agency Chairman Jim Wiatt received sobering advice from his close friends, entertainment attorney Skip Brittenham and former Viacom Inc. executive Tom Freston.
The more than century-old talent agency was on the cusp of merging with hotshot rival Endeavor, and it was becoming clear that there would be no place at the table for Wiatt.
The best course, Wiatt's intimates diplomatically suggested, would be for him to quietly step aside.
Wiatt was taken aback, according to friends and associates who asked not to be identified because the lunch was a private matter. He had initiated the merger -- and spent the last five months fighting for it -- overcoming some fierce internal opposition. When the deal was formally announced April 27, Wiatt was named chairman of the new William Morris Endeavor Entertainment.
Merging the two agencies, which would allow the new firm to challenge the dominance of Creative Artists Agency, was the capstone of Wiatt's three-decade-long career. The deal is expected to close as early as Tuesday, at which point Wiatt will step into a role to help with the transition through the end of the year.
Wiatt had been telling people that he planned to remain at the helm for at least a couple years. But it wasn't to be.
"At the end of the day, he wasn't going to have a real operating role," Freston said. "It's sometimes hard to pull yourself away from the day to day."
It was hardly the Hollywood ending that Wiatt, 62, had envisioned. He saw the merger as the best way to secure a future for the 111-year-old William Morris at a time when Hollywood is making fewer films and television shows, ad revenue is shrinking along with DVD sales, and technology is upending the way consumers watch entertainment. Talent agencies are at the nexus of connecting talent with producers, and the only way to stay competitive, Wiatt has argued, would be to make a bold stroke at getting bigger.
Uniting the rival firms would also reinvigorate William Morris by bringing in Endeavor's young, dynamic managing partners, Ari Emanuel and Patrick Whitesell, Wiatt has maintained.
But a transformative deal would not come without a heavy cost to Wiatt, including alienating several of his closest colleagues, triggering more than a hundred employee layoffs -- and ultimately accelerating his own exit. Agency executives say Wiatt believed the benefits outweighed any risks and bad publicity.
"It would have been easy not to do this. It would have been easy to glide along -- it wasn't as if the company was doing poorly," said William Morris President Dave Wirtschafter, who will serve as co-chief executive of the new firm, along with Endeavor's Emanuel and Whitesell. "To his credit, he was the one who pushed to get this done, knowing it would be turned over to others. That's a pretty significant thing."
The closely scrutinized Hollywood hook-up, however, eroded support for Wiatt within his own firm.
William Morris partners and agents complained they were kept in the dark about discussions, to the point of being misled about the status of talks with Endeavor in a meeting led by Wiatt earlier this year. Others felt slighted that Wiatt sought leadership from outside the agency. Some were bruised by what they felt was a ham-fisted manner in which the layoffs were handled.
Perhaps most damaging for William Morris was how the merger was perceived by image-obsessed Hollywood. In the eyes of the hyper-competitive and gossip-fueled agency world, Wiatt had been out-maneuvered and out-agented by Endeavor's Emanuel, who had unceremoniously ushered the original deal maker out the door within three weeks of the merger's announcement. According to those running the new agency, the reality is more nuanced than the speculation.
As months of talks dragged on, it grew evident that even though Wiatt would assume an elevated title, he nonetheless would have no role in day-to-day operations.
Though neat on paper, the structure in practice would be untenable. It would be difficult for Wiatt, accustomed to running a company, to have to take a back seat. And it would be no less difficult for the new managing triumvirate to assert authority, with the former William Morris chief looming above them on the organizational chart.
In order to avoid that conflict, Wiatt elected to step aside so the new leadership could forge a unified culture, said Whitesell, the Endeavor managing partner who will serve as co-chief executive of WME Entertainment.
"Jim was not voted out of the company. That rumor out there -- it's completely false," Whitesell said. "He made the decision to move on. We're grateful for what Jimmy's done."