'Bruno' Agency Shocker: Did Endeavor Do Some Shady Things To Generate A Big, Fat Commission?

If your memory extends all the way back to last October, you may recall a little multistudio bidding war that resulted in Universal shelling out $42.5 million for the rights to Sacha Baron Cohen's Bruno, a shocking price considering that at the time, there was at a fair amount of pants-soiling going on about some potentially scary tracking data for Borat, which was yet to prove that naked wrestling and the throwing of wadded up bills at bed-and-breakfast operating roach-Jews would be embraced on a worldwide basis. So how did Baron's people pull off such a great deal in the pre-Kazakhmania era? Slate's Kim Masters reports on speculation that Endeavor is running a puppet regime whose sole mission is to screw the studios while enriching its clients (yeah, that sounds exactly like an "agency," but stick with it):

Before the bidding frenzy started, Endeavor sold Bruno to a financing entity called Media Rights Capital. MRC didn't take much of a risk, since the studios were fighting to buy the project before the proverbial ink was dry. In fact, MRC sold the package to Universal at such lightning speed that some at the studios have wondered aloud (if not on the record): Why did Endeavor need to bring MRC into the deal?
And that raises the question: Is MRC a separate company, or is it Endeavor in different clothing? It is against California state law for agencies to produce films, and Endeavor has said that MRC is a separate entity. But some in Hollywood perceive MRC as a unit of Endeavor—a unit positioned to cherry-pick projects. Former Endeavor agent Modi Wiczyk is co-CEO of MRC.

One executive who passed on Bruno said MRC seems to be an "internal production machine" for the agency. An executive at another company also expressed doubts about the deal. "None of the math made sense," this executive said. Estimating high, the film seemed to require a budget of only about $30 million, "even if you give Sacha the $15 million that he wanted" for starring. And if that were true, then whose pocket would be lined with the markup?

An Endeavor source says all this is the bitter cavil of the defeated. "MRC is its own company," he says. After all, Endeavor would hardly risk its business by breaking the law.

If fear of illegality stops Endeavor from fully exploiting this lucrative strategy, maybe a certain bolder rival will seek an advantage by taking things to the next logical level. When negotiating for the services of CAA clients in the near future, executives should be wary of high competing bids from Century City's new Death Star Pictures, even if the agency insists that the apparently deep-pocketed upstart is "totally independent from Creative Arists" amidst damning evidence that the shadowy studio's only output is a series of culinary training videos on proper baby-preparation techniques.