Phil Gersh of Gersh Agency (2/8/99) (The Gersh Agency 50th Anniversary issue) The Gersh Agency is unique in the entertainment industry in that its founder, Phil Gersh, still runs the company he created some 50 years ago. Only now, Gersh has 100-plus co-workers at his side -- most notably his two sons and joint owners, Bob and David. The Hollywood Reporter's Stephen Galloway asked the Gershes about the changes that have taken place in the company and about the main challenges facing it today. THE HOLLYWOOD REPORTER: A few years ago, managers were almost invisible. Now they seem to dominate the business and are likely to do so even more with Michael Ovitz's new company. How is that affecting you? Phil Gersh: It's a very serious situation. But the important thing is that managers are not licensed like we are; they can charge more than 10%, and they can produce films and TV shows -- we can't do any of that. I believe our association of talent agents will discuss all of this with the DGA, SAG, etc., and if the guilds go along with the agents' association, there will be the same legislation for the managers as for the agents. David Gersh: Until (former UTA agent) Gavin Polone [became a manager], there weren't too many managers whose clients didn't also have agents. Now [that Ovitz has taken] some of these guys, are they going to have agents as well? Then there will be high-profile clients sitting out there with a manager who's not supposed to solicit [work] or negotiate. Bob Gersh: But in a lot of cases, probably the majority, [managers] are actually a positive. If you're working with a good manager that you're in sync with, it can be very productive. David: [Bob] works in talent. In talent, there have been managers for 25 years, and they have some wonderful relationships. It's only in the last two or three years that there have been managers for writers and directors. Three years ago, we had maybe 5% of our directors with managers; now it's probably 60%. With a few directors, if the manager is also involved in a company that has writers, it can generate material -- it's a way of growing the base of material for the client. THR: Have there been any other shifts in the industry that have had a major impact on you? Bob: Obviously, on the TV side of things, there's been a very big difference over the past four or five years, with managers adding another level in terms of negotiations. David: From an agency point of view, I think that the top guys at CAA [leaving] truly did have an effect. It wasn't overnight, but it did level the playing field. I think it opened up people so they felt free to go to any agency. But the biggest change I see from the perspective of representing directors is the [tendency of studios] to either get a proven, established, A-list director and pay millions of dollars for the fee, or [hire] totally new people from commercials and music videos. Directors who have had very good careers -- $2 million to $2.5 million directors -- are not the ones working. They either want to make a "Gladiator" at DreamWorks and get a Ridley Scott or a "Haunting of Hill House" with a Jan de Bont and pay the money -- or [get an unknown] and get some options on the director. THR: Is the same thing happening with actors? There's been a lot of talk about how the expense of hiring top stars has squeezed the money for mid-range performers. Bob: It's not necessarily [harder to get them] work. But sometimes it's definitely a struggle to get them the same salary. It's a little bit more of a struggle than three years ago. Phil: The business is out of control. It's fine for the $20 million actors to get that fee, but there's no front office anymore. [The top actors and directors] get whatever they want -- material, money. It's unfortunate that [if a studio head] wants an important $20 million actor, they [do whatever the actor wants]. Then the actor gets $5 million in perks. But it's good for the agents. The fact that the compensation has escalated so dramatically, it trickles down so that the writer gets more, the director gets more; all the below-the-line people have huge salaries. From an agent's point of view, it's great. But in the long term, I hope they modify it to some extent. THR: Do you package projects, or do you stay away from that? Bob: My feeling in terms of television is, if it makes sense, great. But one difference between us and some of our larger competitors is that [we want] to expose the talent to all the writers. If we happen to have something right for our client, great, but it's whoever is the best match for our client. David: We want to serve our clients' interests first. But because we have gotten much bigger and have more clients and resources, we have gotten more involved in packaging. [For instance], we got a book called "Like a Hole in the Head" and gave it to (Jan de Bont's) Blue Tulip Prods. to produce, then we gave it to Calista Flockhart and then we set it up at Fox with all three elements. Will we always do that? No. But where it makes sense we will, and we now have the ability more than ever to do that. THR: Actors and creative people tend to grouse about agents, saying they don't really understand them. Is that true? Phil: I don't believe so. I think the majority do appreciate what the agent does, particularly with this agency, where we developed [many of their careers] from scratch. David: I think they feel we are patrons of the arts, and we understand the artistic side of it. They see we care about their work, and we care about them as artists. We spend a lot of time helping them pick material. It's not just about the deal. THR: David, you and Bob have both gravitated to different sides of the business. Why? Bob: With me, it was sort of a fluke. When I started, the office wasn't really handling actors. We hired someone who was an agent in New York, and she moved out here, and I started working with her to build up that area. I enjoyed it. It's always been a challenge. David: My coming in was different because I went to law school, then I practiced law for a number of years. But then I saw [what] Bobby was doing and that he was having a lot of fun doing it. There was the idea of not being competitive with Bob and helping to rebuild the directing side of it. And I've enjoyed working with the filmmakers a lot -- Jan de Bont, Joe Dante, Amy Heckerling and any number of people. THR: Have you ever been tempted to merge with another agency? Phil: Just the opposite. Every big agency has approached us. They've tried to get us to merge, and [we] have always said no. We want to be an independent agency and control our own destiny. David: But we've drawn from within and changed internally. Yes, we've been around, but we've also modernized and made changes so that we feel very competitive today with the other companies. We've grown in staff and hired a lot of good agents in every department, so every department has grown. There has been no systematic plan, just whatever made sense. We now have a full-time CFO. Our coverage of information around town is absolutely competitive. Bob: We are extremely active in all facets of the business. Some of the big companies are so huge and have so many interests outside their clients. We feel there is a distinct difference [here]: personal representation where the client comes first and last. THR: How do you divide things among yourselves? David: We've never sat down to figure out how to divide it up. It's always been a natural thing. There are certain things I'm more interested in doing, and certain things Bob does and Dad does. Dad likes to do more of the day-to-day administration, overseeing expenses and things like that. When we did the whole remodeling here, Bob undertook that. We all tend to have our things that we get involved with. What's nice is that none of us feels threatened. Because we have grown up together, there is an inherent trust. THR: You have had all this expansion, but the company is still called the Gersh Agency. Do you plan to let others into the ownership of the agency? Bob: Leslie Siebert is a partner. We are absolutely open to do that, and as people contribute and become part of the company, [that will happen more]. Phil: The name is going to change [one day]. It will end up being a generic name as the other agents become more successful. THR: How would you feel about that? Phil: (laughs) I'd feel fine.