Chasin' Chevy By Alison Fahe

Michael Ovitz's Creative Artists Agency continues to try to write its own rules for client/agency relationships. CAA is close to inking what is believed to be its first major talent de

The move illustrates how CAA, by creating an in-house “ad agency” to service Coca-Cola, appears to be dodging the rules imposed on traditional Madison Avenue shops, when it comes to issues like confidentiality and client conflicts. That end-run is now going to be tested as CAA prepares to close a deal with PepsiCo unit Frito-Lay to sign Chevy Chase to appear in its ads later this year, according to one Hollywood source.
CAA has long provided talent for competing studios and companies, including Coke and Pepsi. But its relationship with Coke has evolved beyond that of a traditional talent supplier into that of a quasi-ad agency, giving it access to strategy and tactical plans of Coca-Cola. CAA and Coke have insisted this arrangement neither threatened Coke’s relationship with its agency, McCann-Erickson, nor compromised CAA’s ability to service Coke’s rivals as a talent rep.
A CAA spokesperson said, “Pepsico is not a client. Chevy Chase and Coca-Cola are clients. Our job is to do the very best we can for our clients.”
But some have their doubts. “If (CAA) was just representing talent to both sides, the ethical issue wouldn’t be. that pressing,” said one high-level ad agency executive who asked not to be identified. “One question it raises is what information Ovitz could share with either Coke or Pepsi. He is the creative source for Coca-Cola and he is now negotiating talent with their main competitor. So how is it that he is trustworthy enough to do those things and agencies aren’t?”
However, one source familiar with CAA said the company assures its corporate clients, which include Coke, Apple and Nike, that there is an autonomous group devoted solely to such accounts, a group which is kept separate from its talent agents.
“As it’s told to me, there is a ‘church and state’ agreement between the talent agents and the people in the marketing services group,” said one source, acknowledging that ad agencies wouldn’t be permitted the same leniency. “(CAA) doesn’t play by Madison Avenue rules,” he said.
Frito-Lay’s willingness to approach CAA indicates that it is comfortable with the arrangement. Without confirming the talks, Tod Mackenzie, a Frito-lay spokesman, said Frito-Lay does not perceive a conflict.
“There are a finite number of opportunities. There will be occasions where both roads meet,” he said, noting that both Coke and Frito-Lay were major NFL sponsors.
Another example of CAA’s links to both Coke and Pepsi is with Earvin “Magic” Johnson. CAA represents Johnson, who not only appeared in a Pepsi commercial last summer, but also is a Pepsi bottler.
But Pepsi isn’t worried about conflicts either. In fact, Andrew Giangola, a Pepsi spokesman said, “If anyone should be concerned, it should be (Coke).”
A Coke spokesperson said, “Our work is totally separate from the talent side of (CAA’s) business.”
It is not known which of FritoLay’s two main agencies, DDB Needham/Chicago or BBDO/New York, would be involved with Chase. DDB handles Fritos, but BBDO is the likeliest bet since it handles several brands including Doritos and Lays and frequently uses celebrities in PepsiCo ads.
One industry observer noted that the situation is stickier if Chase is to appear in ads produced by BBDO, since it’s Pepsi-Cola’s main shop.
Since CAA is negotiating with an autonomous unit of PepsiCo, rather than with its soft-drink division, all parties appear to be comfortable with the deal.
Copyright Adweek L.P. (1993)