WME At 10: John Ferriter Recounts Behind-the-Scenes Drama At William Morris That Led To Endeavor Merger
June 1, 2019 marks the official 10-year anniversary of the William Morris Agency-Endeavor merger. As part of Deadline’s coverage of the milestone, we reached out to John Ferriter, former WMA EVP/Worldwide Head of Non-Scripted TV, who was the only board member in either company who voted against the merger. He was let go from WME, triggering a $25 million lawsuit against the agency, which was eventually settled. He now runs managing and production company The Alternative, which he launched in 2015.
Here is Ferriter’s first-person account in vivid detail — some of it never before revealed — of the events leading to and immediately following the merger, as well as his take on it 10 years later. He chronicles the internal discord at WMA and the maneuvering by the Endeavor leadership that allowed the storied, 111-year-old agency to be taken over by a scrappy and aggressive upstart. He also addresses his WME ouster and how the events 10 years ago may have foreshadowed some of the issues with which the industry grapples today.
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[Deadline also reached out to a couple of other former WMA board members who declined comment, as did a rep for WME on behalf of players on the Endeavor side because WME is in a quiet period amid plans for an IPO.]
WME At 10: The Merger That Made Endeavor A Power Player
“The following is based upon my personal observations and opinions developed at and since the times discussed in this column” – John Ferriter
To truly understand the reasons for the merger you have to go back to the discord that existed back in 2004 and 2005 at WMA when board members Sam Haskell, Richard Rosenberg and Steve Kram left the company after a power struggle, and to more discord in the summer of 2008. It was no secret that Chairman Jim Wiatt and Motion Picture Head John Fogelman were feuding, and it came to a head when Jim decided he wanted John out of the company. Lawyers intervened and a compromise was reached between the two. In both cases individuals outside of the agency intervened or this merger never would have happened. Suffice it to say, power vacuums get filled, and not always by the wise or thoughtful. But the Fogelman/Wiatt rift was going to be a problem for Jim down the road. It was all very “Game of Thrones” and ripe to be exploited.
It’s also important to go back and analyze the financial structures of where WMA was at the time of the merger (valued at about $230M) and Endeavor’s finances (valued at about $110M). WMA had money and heritage commissions, but Endeavor didn’t — and needed money.
Ten years ago on April 27th, 2009, I sat in the last official board meeting of The William Morris Agency as a member of the board. We were upstairs in a conference room at the Regent Beverly Wilshire as I watched my WMA board member colleagues vote 18 to 1 to merge with Endeavor and give the control of the company over to people who I knew were going to disrupt it. I predicted the WGA/ATA conflict then as it was clear to me that the Endeavor board members only cared about money and turning the company away from being a traditional talent agency and into an entertainment conglomerate as well as a studio. When I asked how they were going to be a studio and start producing as it was my understanding that could be a violation of the California Talent Agency Act, they laughed. It was glaringly obvious to me that an inside deal had already been agreed to (months before I as a board member even knew about any merger conversations) and members on both sides told me to go along with the merger pact because “it would be really good for me personally.” After meeting secretly at the Bel Air Hotel with Ariel Emanuel and Rick Rosen the week before we took the vote, I realized that a deal had already been agreed to in principle (even before the date of the merger vote) and that WMA was about to be shuttered in favor of a very different company. I learned then that many of my colleagues had already been designated for termination even though publicly everyone was told that their jobs were safe. I’ve never gotten over the fact that people were lied to about about such an important life-changing issue.
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I also realized the Endeavor guys had completely snookered the WMA heads who were supposedly looking after WMA’s interests and guiding the conversations. I thought, wow, their “bad guys” are better at being “bad” than our “bad guys.” A lot better at it. I also realized at the time that the Endeavor guys would have no reason to keep Jim Wiatt, Irv Weintraub and several others at the company after the vote, because we had so many guaranteed package positions on television shows at a higher percentage than Endeavor was charging and we had millions of dollars coming in each year in heritage commissions, that the cash flow and infusion from WMA into Endeavor would be a much needed boost and they didn’t need to keep the WMA personnel to get that money. WMA had a very standard package fee that the agency rarely if ever varied or compromised on. When I examined the breakdown of Endeavor packages and their definitions, I realized that they would negotiate just about anything and call it a package. There seemed to be no standard, no rhyme or reason to what they were doing. In the honor amongst thieves category, we at WMA were focused on “clientele” while they at Endeavor appeared to be solely focused on “commerce.”
As I read through the documents I learned that a number of board members had already negotiated new deals for themselves guaranteeing $4 million annual salaries with a $70,000-a-month draw on top of it for a total of $4.84 million a year. Those deals were guaranteed for five years for each of the nine board members (at the time of the vote Jim Wiatt, Irv Weintraub, David Wirtschafter, John Fogelman and Jennifer Rudolph Walsh from WMA, and Ariel Emanuel, Rick Rosen, Patrick Whitesell and Adam Venit from Endeavor). You can do the math. It’s significant. Also if any of them left before the end of their term they were paid out at 150% of their salary with the exception of Jim Wiatt, who would be paid out at 200% of his salary.
In addition for the purposes of voting on the board the WMA members received one vote per person and the Endeavor reps were weighed at 1.25 vote per each vote. So if the five WMA board members voted in a block that would count as five votes. If the four Endeavor board members voted in a block, their votes would count as five votes. This was asinine and I couldn’t believe that had been agreed to without the knowledge of the other board members.
There was also a provision to vote members out with seven votes. I knew in that moment if the merger passed they would throw Jim and Irv out the first chance they got because Fogelman and Rudolph Walsh had been having back-channel conversations with Endeavor for months and I was privy to the blowout that had happened with Fogelman months before and I knew he had an ax to grind. All of this was confirmed to me in conversations I had in the two years after this when I sued the company for unlawful termination. Prior to the merger vote I went to Jim and told him what I knew was about to happen and he didn’t believe that Ariel or Rick or Patrick Whitesell would ever double-cross him. I remember saying that we are partnering with someone you threw out of ICM who had allegedly been stealing documents in the middle of the night when he was starting a rival agency, and you don’t think there’s a chance that he might double-cross you? I had read reports in the New York Post and other publications, and that story of betrayal had become urban legend. Jim and I have since spoken about all of this in detail. He has publicly told me that we never needed to do the merger.
I was also concerned when I learned that Craig Jacobson was in some capacity “helping both sides in the merger and that he was being paid $1 million or something like that. I as a board member would never have voted to approve him or hire him to work for both sides because it smelled of a legal conflict, and to my knowledge we never discussed it or waived any conflict. I certainly was not made privy to this until after the fact. I was told “he’s being a friend to the agency.” It just all seemed like a fait accompli and some form of agency insider trading.
In spite of all of this I worked hard with a couple other guys to build a coalition to block the merger and we were at 9 for 9 against with one abstention about six days before the vote. I then learned that another back-channel deal was made to have Peter Grosslight, the head of the music department, replace Irv on the board, in exchange for Peter guaranteeing that he would deliver the votes from his music board member colleagues. Irv would still get his “deal,” but now it took Peter and three other colleagues from the “against” category into the “for” category. The votes shifted from 9/9/1 to 12/6/1. One by one, six other people flipped and voted their self interests and voted for the pact, even though several of them told me privately that they didn’t like the deal but weren’t willing to risk their futures over it. I had even begged Aaron Kaplan to vote against the merger and that we could make changes from within, but he refused informing me that he had no mitigation in his contract so that he was going to get paid out no matter which way the vote turned out. I thought it was selfish, but to his credit, and for Aaron’s agenda, he was right and he’s benefited greatly from this.
One of my colleagues called me the night before the merger and urged me to just go along. He said, “John, these are really bad guys and they will try to hurt you. Just play along, how bad can it really be?” During that final board meeting someone called for a show-of-hands vote. I objected and said if you are going to vote to give away an 111-year-old company founded in 1898 I want a roll call vote and I want to look everyone in the eye as they vote. Let people say their piece. We did the roll call and the vote as widely reported was 18 votes for the merger and one against. I made a very long “You’re out of order”-type “And Justice For All” speech, but it fell on deaf ears. After the vote was completed, there were no high fives, no cheers, no handshakes. It was solemn and had the air of a Neville Chamberlain peace plan or a Theresa May-backed Brexit plan.
I looked at David Kekst and Mike Dates who were in the meeting and both looked as if they had just been witnesses to the crime of the century. Ironically Jim Wiatt and Irv Weintraub exited the company almost immediately after the June 1st official merger date, and they were replaced by Peter Grosslight and Mark Itkin — both of whom I was told received the same lucrative salaries. A couple of days after the vote, I had fallen ill with a blood clot and a deadly staph infection and I flatlined, spending most of May 2009 in a medically induced coma at Cedars while false rumors were spread by the agency about my health. When I was awakened from the coma, there was a message that I needed to throw my vote behind Itkin to replace the open board seat. The illness was so bad that I couldn’t walk or put weight on one of my legs for months and I could barely speak for another month, but yet my vote was needed so I nodded silently and that was relayed to the agency.
When I came out of the hospital I learned that most of my clients had left me. Ryan Seacrest, Chelsea Handler and several others departed when I was in a coma. You see, your value is greatly diminished when you die, or when you are left for dead. And I experienced both. You learn about loyalty and I can never repay the loyalty of a Piers Morgan, a Glenn Weiss, a Nancy O’Dell or a Mark Walberg for supporting me even when logic would have told them to jump ship. I returned to work in July on crutches unable to walk or put weight on my damaged leg to find a very different company, where I was immediately called into Ariel’s office and read the riot act. “Row in the same direction as everybody or else.” Here I couldn’t walk, and I was being told to “row.” It was clear that I had already been shot, but that my body had not hit the ground yet. As has been reported I was locked out of WME on October 17th, 2009, and stories were leaked to Nikki Finke and published in Deadline Hollywood that I had resigned from WME when I had not and never did resign. Those rumors were never true. Come to think of it, I don’t think a retraction or correction was ever printed. A long legal battle ensued between me and the agency that was resolved right before Christmas in 2011. In that battle and in subsequent conversations my worst suspicions were confirmed.
The two portraits of William Morris and Abe Lastfogel that hung in the lobby of the William Morris Agency were tossed into a dumpster along with the WMA logo from the building. Someone fished them out and gave them to me a couple of months later. They hang proudly in my office. Ten years. By in a blink. I wonder how many of those William Morris board members realize how badly they got played when they gave the company away in a merger that didn’t need to be done that was also the worst deal in the history of the company. William Morris survived planned trips on the Titanic and the RMS Lusitania. The William Morris Agency survived two world wars, several smaller wars, the Great Depression, a couple recessions and several strikes, but it couldn’t survive the greed of a few people who drove it into the ground like a new Boeing 737.
I don’t claim to be Nostradamus, but 10 years later almost everything I predicted would happen has happened. In my opinion, the greed and avarice that were driving the deal and those conversations were so obvious that you could have been blind and you still could have picked them out of a lineup. I predicted there would be union and guild issues over packaging once the agency started producing and that no one would challenge them until it was too late. Bam. I predicted they would either flip the company or go public within 10 years so that Ariel could become a billionaire. Bam. Predicted that they would throw out as many of the WMA old guard as they could. Bam. Only a handful of the original WMA board members from that meeting remain at the company. I believe three in New York and three in Los Angeles. Wiatt, Weintraub, Jim Griffin, Cara Stein, John Mass, John Fogelman, Rick Shipp, Aaron Kaplan, Paul Bricault, Mark Itkin, Norman Brokaw and Peter Grosslight are no longer with the company.
Peter passed away a few years ago. I visited him in the hospital before he passed and we made our peace. We were co-workers who respected each other for years. He told me that even though he knew it wasn’t a great deal, he had to make the deal to protect his people and that he would never have agreed to it if he wasn’t guaranteed a board seat in the new company where he had some real say. Norman Brokaw passed away as well. After the merger the new heads of the company relegated him into the shadows. To me, that was heartbreaking. I also found it interesting that Lou Weiss, chairman emeritus of the company and one of the people who invented the television packaging business, passed away about three hours before the WGA/ATA conflict reached full fury. You can’t make this stuff up. The main guy who invents television packaging dies and then the biggest issue that everyone is talking about is the system he created.
Many lives and relationships that were destroyed can never be repaired. In 10 years I’ve had maybe two meals with WME agents, both of whom were former assistants of mine and both meals initiated by me. I kept copious notes during this time period because it all felt so sinister and I wanted to make sure that I had a record of it and I wanted to make sure that no one could ever do something like this again. It was a shame and it never needed to happen.
Ironically, without that merger I don’t think I would have ever left the William Morris Agency. Thank God I’ve found a better Alternative.
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