This is Hollywood calling...

This is a phone town. Always was, always will be. Nobody moves without going person-to-person. And at the end of the line are the agents, doing the deals, smoothing the brows, calling the shots. Now the wires in area code 90210 are melting. The talk is of Dustin, Meg and Russell? Did you hear they dumped the biggest agents in town? And that stars are leaving ICM in droves? And that things will never be the same again? David Thomson listens in on a classic Hollywood tale of greed, ambition and retribution

Once upon a time, there were no agents in the motion picture business. An agent may admit this to you, and shudder: because, if for 25 years or so the actors, the directors and the writers found a way to do business with the studios, without coughing up 10 per cent, it could happen again.

Once upon a time, there were no agents in the motion picture business. An agent may admit this to you, and shudder: because, if for 25 years or so the actors, the directors and the writers found a way to do business with the studios, without coughing up 10 per cent, it could happen again.

So agents have always worked according to certain set principles, one of which is that thinking is all very well, thinking can be terrific. But learn to think while you're on the phone. Because one of the fundamental skills that an agent has to develop is giving good phone. He keeps in touch; he knows your numbers by heart; he knows what time of day you're at the gym or the shrink; he knows the rise and fall of your feelings well enough to know the small talk you want to hear. So he calls to say: terrific Red Sox result last night, or how did your kid do on the sleep-over ski-trip? Whatever. It's not always business. It's phone contact. The first great agent in Hollywood was Myron Selznick, and he set the pattern and intimidated his rivals around 1930 not by saying that Mr Selznick has just made this or that fabulous deal. No, he had it announced that the employees of the Myron Selznick Agency placed upwards of 3,000 telephone calls a day.

Technology led the way - which may only lead you to wondering what might happen in the age of e-mail?

Then, in the spring and early summer of this year, ICM (or International Creative Management), which is one of the outstanding agencies in Hollywood, begins to lose a number of its stars. The word gets around that ICM is "leaking" clients? Who are these clients? Well, the household names include Meg Ryan, Eddie Murphy, Russell Crowe, Tim Allen and Dustin Hoffman. But the sum total is getting on for 15. And the e-mails are flagging all over Hollywood with the early word of the defections. It gets to be like a game, wondering who will go next and is this a serious problem at ICM?

Within days, the spin comes into play. For over two decades now, the movie operation at ICM has been led by Jeff Berg, who is now chairman of the enterprise. For several years, his chief agent and - eventually - president of the company had been Jim Wiatt. Earlier this year, it is said, Wiatt went to Berg and said that, considering his importance to the agency, he didn't reckon he had enough money.

Berg considered the matter and asked if Jim didn't have a contract. Sure Jeff, said Jim. And you signed that contract? asked Jeff. Of course I did. Well, Jim, a deal is a deal until it's renewal time, isn't it? Sure, Jeff, but I'm kinda broke. None of this need be what was said, but it was the beginning of a split between two men of very different personalities.

Berg is a commander in chief. He likes to come on tough, direct, belligerent even, while Wiatt is famous as a schmoozer, a soft talker, master at picking up on your mood and going with it. Wiatt had been known as a terrific phone man and as the warm, sensitive figure at ICM. The one the clients liked to talk to.

The debate between Berg and Wiatt occupied a little time. It is just possible that Wiatt let slip his feelings and his predicament to others. Like the William Morris Agency. Which offered him their top film position. So Wiatt was out of ICM, and several other, more junior agents elected to make the crossover with him. That was the start of the leaking - and there's no sign that it's over yet. A city guided by e-mail is always vulnerable to rumours; and sometimes if the story is passed around enough then a guy has little choice but to change his agency or risk looking as if he can't make up his mind.

There are ICM stalwarts who see no mortal danger - yet. Berg has always been in overall, fiscal control at the agency. He remains there and he has few rivals at that job. If he lacked the patience, over the phone, to follow every twist and turn in Dustin Hoffman's soliloquies, there are plenty of people in town cheering. And Hoffman is no one's bet to make big money films again. Eddie Murphy is no longer anywhere near as hot as he was. As for Meg Ryan, she has marital troubles (splitting from Dennis Quaid), and she's 40 next year. The real treasury at ICM is Mel Gibson, Julia Roberts and Rosie O'Donnell. The time to worry is if they go. Meanwhile, while displaying a rugged, no-fuss attitude in public, Berg has hired Eddie Yablans (the son of Frank Yablans, president at Paramount in the early 1970s and a famously terrific mouth) to fill Wiatt's telephone seat.

What's really most interesting, I think, is how all of this reflects on the changing status of agents. The aforementioned Myron Selznick was a genius of a kind. He saw that a shrewd, quick, eloquent operator could talk up his clients, and play one studio off against the others, to get more money for his clients. Scornful of most studio executives, Selznick saw in the late 1930s that a big agency could package its own productions and effectively serve as a studio. He tried it, and the studios ganged up against him. By then, he was exhausted from phone calls and drinking so much that he gave up. He died in his mid-40s.

In the next 20 years, the agency business became dominated by MCA, a talent agency led by Lew Wassermann and Jules Stein, which actually broke federal law by operating as agent and producer. They were obliged to go one way or the other, and they moved into production, buying Universal. Their agency became the basis of ICM in the mid 1970s, and that's where Jeff Berg made his name. At that time, he was offered the chance to run several studios, but Berg stuck with ICM, in part because he is the son of a great agent and because he believes in the constructive management of talented people (because they're too stupid to look after themselves).

Young, tough, punchy, quotable and very ambitious, Berg was for a moment at least the perfect agent. But the moment didn't last. In 1975, a band of junior agents, with only about $100,00 between them, broke away from the William Morris Agency (do you begin to get a sense of swings and roundabouts?) because it was old-fashioned. They set up their own new company, Creative Artists Agency, or CAA, under the leadership of Michael Ovitz.

Ovitz was the new breed (though he and Berg are about the same age). He was brilliant - familial, even - with his clients on the phone; and he was lethal with the studios in negotiation. He built CAA up to being the biggest agency in town, with new premises at Wilshire and Santa Monica, designed by IM Pei. He had the insight that even very big stars might be anxious, desperate, to be Mike Ovitz's clients, because he was so superhuman in his attention to detail, so superbly analytical in his explanation of why clients should be paid so much, and so ahead of the game. Berg was passed by, and he didn't much enjoy the feeling.

The era of Ovitz lasted until the early Nineties, and as his power grew it's fair to say that the Hollywood product became more nightmarish. But then he tried to go higher. He took the number two position at Disney: it seemed he was on the brink of testing his genius in real production. But Michael Eisner, the number one at Disney, was so intrigued by power, glamour and status that he humiliated and trashed Ovitz and then accepted his resignation. All of a sudden, the great agent had no power base and no constituency, and much of his agenting prowess was reassessed as moonshine.

What I am trying to describe for you is nothing less than the power struggle that shapes the imagination of the world. People wonder whether Berg can survive. I'm sure he can. But they ask where Ovitz has gone. That question was answered last week with the report that Michael Ovitz's Artists Production Group has just entered into a deal with Canal Plus of France that will give Ovitz $900m over three years to produce films. The monster is back, and blood will be spilt.