Ari Emanuel: 21st century Hollywood mogul

In years to come, Ari Emanuel could go down as the first great Hollywood mogul of the 21st century: a colourful impresario who came to Los Angeles with a wonky smile and a suitcase full of dreams, then proceeded, through sheer force of his blistering personality, to reach the top of celebrity culture's greasiest pole.

With a following wind, he may also end up being one of the entertainment industry's great visionaries: a man who created, in his own tenacious image, a company which would change the way that films, the most powerful and lucrative storytelling medium of our times, are made, packaged, and sold.

Movie industry history is peppered with crazy stories. Plenty end in tears. But few have had as much promise as that of Emanuel, who not only founded the now-iconic Endeavour talent agency 15 years ago but has also just made an extraordinary public gamble on the future of showbusiness.

This latest move has turned him into the public face of Hollywood "reps," a compelling breed who have for years been seen as secretive fixers – who manage the careers, maximise the incomes, and act as creative sounding boards to the most famous men and women on the planet. It has also transformed Emanuel's profile. He was already the most famous talent agent in Hollywood, thanks to the hit TV show Entourage (which begins its latest series on ITV2 tomorrow night). Now, he is also being talked about as one of the town's most ambitious power players.

That gamble is WME Entertainment, a vast new firm that he created through an audacious merger just over two months ago, and which has already succeeded in shaking-up the pecking order in a sharp-elbowed industry.

The new company's story began in April, when Emanuel's firm, Endeavour, known for its fashionable image and upstart philosophy, agreed to combine forces with its venerable rival William Morris, an 111-year-old agency with a blue chip reputation. The move, swiftly approved by the Federal Trade Commission, created a new "super-agency," which boasted a client list containing more than 1,000 of the world's most famous and talented actors, writers, musicians, directors and producers.

It posed a threat to the market dominance of CAA, a corporate behemoth founded by the legendary Michael Ovitz in the mid 1970s, which has in recent times become so big, and so successful, that it swamped every other player in Hollywood.

Public intrigue was also heightened by the celebrity wattage attached to the merger. Endeavour boasted 80-odd agents and scores of major stars, including the likes of Danny Boyle, Keira Knightley and Shia LaBeouf, on its books.

William Morris was bigger, and represented hundreds of A-list musicians, and film stars. However, some of its big names, such as Denzel Washington and John Travolta, were considered to have passed their commercial peak.

Emanuel, who became the effective head of the new firm, was famously said to be the template for Ari Gold, the fictional agent who in Entourage is distinguished by his shouty demeanour and mobile phone-chewing misogyny.

In tomorrow night's season premiere, Gold, played by a splendidly highly-strung Jeremy Piven, delivers his characteristic range of hugely funny, yet appalling put-downs to colleagues, family members, and his homosexual personal assistant called Lloyd. That character's behaviour and manner are best described as a caricature rather than a carbon copy of the real Ari, who in his younger days was often described as volatile but is said to have mellowed substantially in recent years.

But it may have at least some factual basis. In 2002, an Endeavour employee called Sandra Epstein filed a sexual harassment lawsuit claiming that daily life at the company saw rampant pot-smoking, bullying, sexual frolics on desks, and one agent demanding that his assistants book prostitutes for him.

The lawsuit claimed that Emanuel once blocked her from sending a script about the Navy Seals to the actor Wesley Snipes, saying "That is the dumbest thing I've ever heard... Everyone knows that blacks don't swim." Though the case was settled on undisclosed terms, Emanuel has denied any allegations of racism. Indeed, as a prominent member of the Jewish community – who said Hollywood should "shun" and "refuse to work with" the anti-Semitic Mel Gibson – he boasts a track record of opposing stereotyping.

Another element of Ari's fascinating profile is his family background. One elder brother, Rahm Emanuel, is the hard-nosed political fixer nicknamed "Rahmbo," who once sent a dead fish to a rival, and now works as Barack Obama's Chief of Staff. Another is a famous oncologist called Ezekiel. Together, the three men have become a pre-eminent group of siblings in American public life – and share a drive that Ari once credited to the insanely competitive environment of the Chicago household where they grew up, sons of a left-leaning Jewish paediatrician.

A recent front-page profile in The New York Times described Ari, 48, as "the pre-eminent power player in a Hollywood that has often bemoaned the sunset of colourful moguls from an older generation, including Michael Ovitz and David Geffen," Describing Ari as a "restless achiever" and "hardball player of considerable skill," the lengthy piece summed up the mood in Hollywood by quoting a TV executive who said: "Nobody wants to be on the wrong side of Ari Emanuel, especially now that his brother is running the White House."

Emanuel worked his way up from the lowest rung of the showbusiness ladder after coming west to Los Angeles. Colleagues nowadays describe him as "tenacious and very, very loyal" – traits that helped turn Endeavour, founded in a cheap rented office in 1995, into a vibrant success story and gave him a $10m home in Brentwood, west LA, together with other trappings of Hollywood success.

"People stick with Ari, because he's not the sort of guy who will just dump someone who stops making money," says one colleague. "If you look at his client list, there are people he's been with for a very long time; from the start, really, through good and bad."

Others are struck by his colourful demeanour. "I spend my life dealing with agencies who say 'Please don't write about us, write about the client'," says a Hollywood journalist (who, like almost everyone in the industry, is reluctant to be identified when speaking about Ari for fear of upsetting him). "Well, Ari's different. He's the first agent I can think of who's been depicted on TV. He's the industry's first real celebrity for a generation. He's flashy, and sexy and comfortable with the limelight."

That's as may be. But it didn't prevent ill-feeling behind the scenes between staffers at the two merged firms. A slew of high-profile celebrity clients have come and gone in the ensuing weeks and months, including Kevin Spacey, who upped sticks for CAA, and Lost star Matthew Fox, who joined WME's stable. And Hollywood gossips have not stopped speculating about a clash of cultures between staff at the recently-combined firm, which will next year move to an eco-friendly new office in Beverly Hills.

"The culture of an agency is central to its identity, and WME is facing genuine difficulties merging two very disparate cultures, trying to reconcile the 'frat boy' environment of Endeavour with the conservative William Morris model," says an employee of one rival firm.

Perhaps the most intriguing element of the merger story, however, is the way it underlines a seismic shift in the way that Hollywood does business. Traditionally, actors, writers, and directors have employed their agent for one very important job: to trawl through scripts and movie proposals, advise them on the most appropriate future project, and then negotiate their fee. The agent gets 10 per cent of a client's salary for his or her pains.

For years this has represented a simple, if somewhat stressful way to make a living. But the new economics of Hollywood, which has been through an actor's strike, a slump in DVD sales and a recession, has upturned the agent's traditional business model. Fewer films and TV dramas are now being made (studio bosses are, after all, now answerable to shareholders). And those that do get green light tend to have smaller, carefully monitored budgets.

As a result, the actors that star in them (and their agents) are being paid less. While a tiny handful – the Johnny Depps, Brad Pitts, Tom Crusises, Will Smiths and Nicole Kidmans of this world – can still earn $20m a film, the excessive paydays of the 1980s and 1990s for "first division" talent have largely disappeared.

In the face of this decline, Ari Emanuel has made a bold calculation: in order to survive, talent firms are going to have to do more. They must stop being simple deal-makers, become "mega-agencies" – vast, multi-faceted companies with marketing departments, events divisions, and new media offshoots which help clients to leverage income from a wide variety of sources.

Agents will also have to take a more pro-active role in the actual creation of films, making them more likely to be called upon to "package" a production: attaching directors, producers, and actors from their own stable to a particular project, before selling it to the studios.

"The talent rep is essentially taking over much of the traditional role of the studio," says Steven Zeitchik, who writes about agencies for The Hollywood Reporter. "They've got more responsibility for actually getting projects off the ground. It's a symptom of the consolidation of Hollywood."

In such a business, larger firms boast a huge competitive advantage. CAA recently announced it will move into new territory financing new films. Taken to its natural conclusion, this could dramatically alter the sort of films that make it to cinemas.

"You're seeing more deals where agents are coming to studios with a director, the stars, the script, and now even finance," says one industry reporter, speaking on condition of anonymity. "It's compressing the time it takes to turn round projects, which has become absurd. For example, The Hangover, one of the summer's biggest hits, was stuck in development hell for five years. It may result in a far more diverse range of films being produced."

Optimists, which Hollywood is never short of, believe that this represents the potential to produce a new "golden age" of film-making, where power is returned to creatives, instead of being stifled by studios. "Ari created his new firm because he knew he had to be big to be at the level where he could successfully do that," says a former colleague of Emanuel's. "It's a gamble, frankly, but if anyone can pull it off, he can."

Yet the resulting landscape is confusing. Before Endeavour struck the merger deal with William Morris, it was one of Hollywood's "big five" agencies. Now the industry now revolves around a "big four" that includes CAA and WME, followed by two smaller players: ICM and UTA.

For the moment, the only way to gauge his success will be to keep track of the clients the agency wins and loses. After weeks of upheavals, WME last week announced the acquisition of two major stars, Charlize Theron and Justin Timberlake. That, say former employees of William Morris, represents more fresh talent than their new firm would have poached in six months. Crucially, both were signed by teams made up of staffers from both of WME's old firms.

Opinion is divided, however, as to whether the Emanuel actually has the ability to survive at the top table. "Endeavour was very good at maintaining a high profile, and getting written about, but it wasn't quite so accomplished at actually making money," says an employee of one rival. "He [Emanuel] was quoted shortly after the deal saying he wanted to 'fuck' CAA. [The alleged comment, in an off-the-record meeting with writers at Variety, was later denied]. It's the kind of promise that only someone like Ari would make. But that doesn't mean he'll keep it."

Hollywood power brokers: The big four

Creative Artists Agency

Known to the world as CAA, this is the Tesco, or perhaps Goldman Sachs of Hollywood agencies: a firm so successful and influential that it bestrides the worlds of entertainment, sport, literature and music like a hungry corporate Colossus.

CAA was formed by five disenfranchised William Morris agents in the mid-1970s, and grew to pre-eminence through a (then) revolutionary philosophy: instead of managing talent through a single agent, clients are looked after by a team.

Advocates say this collegiate structure is more efficient, creative and lucrative that the traditional agency model, and makes stars less likely to jump ship if a "ten-percenter" leaves.

It certainly appears to have worked: today, CAA employs hundreds of agents, represents a staggering proportion of A-listers, and has a finger in the pie of lucrative industries like marketing, live events, and digital media.

Head Honcho: Richard Lovett

Clients include: Tom Cruise, David Beckham, Brad Pitt, Julia Roberts, Nicole Kidman, Miley Cyrus, George Clooney, Tom Hanks, Steven Spielberg, Keanu Reeves, Will Smith, Oprah Winfrey, Bon Jovi, Sting, Bruce Springsteen, Kate Winslet...

William Morris Endeavour

The newly-created 'super-agency' combines the old-school clout and blue-chip credentials of William Morris with the street-credibility of Endeavour, an upstart agency founded by Ari Emanuel in the mid-1990s which had grown into one of Hollywood's most fashionable talent stables.

On paper, April's merger makes sound sense: Endeavour had a strong TV division, together with several modish young actors, screenwriters, and directors. William Morris boasted the industry's best selection of musical talent, together with some established film stars and a strong literary division. Together, they hope to challenge the market dominance of CAA.

Time will tell if they succeed. More than 100 employees were fired or left during the merger, including several agents who took big "names" with them (including Kevin Spacey). In recent weeks, WME have scored some signal victories, though, announcing the signings of Charlize Theron, Justin Timberlake, and Renee Zellwegger.

Head Honcho: Ari Emanuel

Clients include :J.J. Abrams, Ridley Scott, Quentin Tarantino, Matt Damon, Ben Affleck, Jennifer Gardner, Charlize Theron, Eddie Murphy, John Travolta, Martin Scorsese, Kanye West, Britney Spears, The Killers, 50 Cent, Renee Zellwegger, Justin Timberlake, Sacha Baron Cohen...

United Talent Agency

A free-spirited firm that styles itself as the natural champion of independent-minded artists, UTA was formed in the early 1990s in the belief that Hollywood needed a counter-balance to the perceived corporatisation of the industry's two (then) juggernauts, William Morris and CAA.

The concept was so successful that UTA grew into a stable of over 100 agents, leading some to wonder if it was in danger of becoming the sort of company it was founded to compete with. However it today remains the natural home of comedians and quirkier major stars, such as Johnny Depp.

UTA is well-known for its independent film, screenwriting and reality TV divisions, and has packaged some of the most lucrative television drama franchises of the past two decades, including Law & Order, The Sopranos, Six Feet Under, some elements of C.S.I. and the most talked-about cable drama of the moment, True Blood.

Head Honcho: Jim Berkus

Clients include: Judd Apatow, the Coen Brothers, Johnny Depp, Harrison Ford, Seth Rogen, Gwyneth Paltrow, Jennifer Lopez, Owen Wilson, Rachel McAdams, James McAvoy, Steve Coogan, Celine Dion, Salman Rushdie and Peter Morgan...

International Creative Management

ICM has dined at Hollywood's top table since the mid 1970s, and was once the film-industry's second biggest firm. But in recent years, two seismic corporate changes have shattered its traditional standing in movie industry circles.

The first saw Ari Emanuel and three colleagues walk out in 1995 to found Endeavour, which rapidly became one of the most talked-about agencies in show-business. The second, in 1998, saw chairman Jim Wiatt leave for William Morris, taking A-listers like of Julia Roberts and Eddie Murphy with him.

Other defections have seriously hit the firm's star-wattage, and their list of ex-clients includes Mel Gibson, Denzel Washington, Steve Martin, Cameron Diaz, and Peter Jackson. Today, it boasts a relatively modest slate of major stars, many of an elder vintage.

Instead, it focuses mostly on TV and the odd bit of literature and music, employs roughly 150 agents, and collects packaging fees for such money-printing franchises as The Simpsons, House, Grey's Anatomy, and America's Next Top Model.

Head Honcho: Jeffrey Berg

Clients include: Halle Berry, Susan Sarandon Beyonce Knowles, Chris Rock, Laura Linney, Christopher Walken, Val Kilmer, Samuel L Jackson, Mickey Rourke.