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The deal is designed to combine the Firm's roster of music clients, including Korn, Limp Bizkit and Dixie Chicks, with AMG clients such as Cameron Diaz, Samuel L. Jackson, Leonardo DiCaprio, Benicio Del Toro, Sarah Michelle Gellar, Natalie Portman, Milla Jovovich and Laura Linney.

FIRM, AMG MERGE

Kwatinetz, Yorn Become Co-Chairs,
Ovitz Retreats

The Firm has agreed to purchase Michael Ovitz's Artists Management Group, a move that many believe signals a changing of the guard from old Hollywood to new. The deal, which had been expected for some time, effectively indicates Ovitz’s withdrawal from the entertainment industry.

As part of the deal, the Firm will absorb AMG operations that manage film and television stars, screenwriters, authors and musicians. Two AMG partners—Rick Yorn and sister-in-law Julie Silverman-Yorn will join the Firm under long-term partnership agreements, with Rick Yorn becoming co-chairman of the combined unit alongside Jeff Kwatinetz, who will also serve as chief executive.

The Firm will buy out Ovitz's interests in AMG's talent-management divisions for an undisclosed sum. He will not be involved in the combined company, but will benefit from certain continuing projects and clients he was directly involved with.

Ovitz is hoping to spin AMG's remaining units, including its sports- and animation-management divisions and a film-production unit, into separate entities. Ovitz received undisclosed sums both for his stake in the operations sold and for allowing the Yorns to leave with 18 months left on their contracts.

The deal is designed to combine the Firm's roster of music clients, including Korn, Limp Bizkit, Rob Zombie, Staind, Enrique and Dixie Chicks, among others, with AMG clients such as Cameron Diaz, Samuel L. Jackson, Leonardo DiCaprio, Benicio Del Toro, Sarah Michelle Gellar, Natalie Portman, Milla Jovovich and Laura Linney. The Firm itself represents a smaller list of actors, with clients including Martin Lawrence and Vin Diesel. Martin Scorsese, who had been a client of Ovitz for more than 20 years, has already decided to follow the Yorns to the Firm.

At least 40 talent managers from Ovitz's company are expected to join the Firm, executives involved told the New York Times. But at least 100 other employees of AMG—perhaps far more—are expected to lose their jobs, as well as some from the Firm.

Ovitz's feature film unit, which lost its financial backer, Canal Plus, last month, will no longer exist in its current form, according to the New York Times. The head of the unit, Mark Canton, the former chairman of Columbia Pictures, who joined the company earlier this year in a lucrative, three-year contract, will not join the Firm. But some of the unit's 50 to 70 film projects, in various stages of development, may end up at other studios under Canton's oversight. Also excluded from the deal are AMG Animation and Family Entertainment; AMG Sports; and AMG's urban music shingle Violator, all of which will become separate entities unaffiliated with the Firm.

Kwatinetz said the expanded Firm aims to use the combined clout of its newly bulked-up talent roster to create more leverage for "the artists who create the content" as they negotiate with entertainment and advertising conglomerates. He added that the deal is "about being able to access a lot of information and having the best people in every area."

"Separately, the list of clients on both sides of the equation are very impressive," said Rick Yorn, "but together, matching strength with strength, it is awe-inspiring. We are excited by the possibilities for our clients and our new company and working with some of the most creative and experienced managers in the business."

According to the Wall Street Journal, for Ovitz, the deal suggests a near end to his attempt to make a sweeping return to the Hollywood stage he once ruled as a top agent at Creative Artists Agency. Since leaving CAA in 1995 to become president of Walt Disney Co., Ovitz has absorbed one hard knock after another. He lasted just 14 months at Disney, leaving in late 1996. After weighing his options for a while, he later made investments in Internet and live-theater companies that didn't pan out. An effort to lure a National Football League franchise to Los Angeles also fizzled. Undaunted, Ovitz in 1999 set up Artists Management Group with ambitions of combining talent-management services with the production of movies and TV shows in a company he thought would transform the entertainment business. He hoped to sign up a technology partner that would facilitate distribution of the content he would create via nontraditional means. But his efforts to become a producer in the TV and movie worlds have been costly and unsuccessful. The television unit was shut down last year. AMG has also failed to realize its ambitions in the film business.

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