Talent agencies amping up digital deals.

The venerable William Morris Agency was founded in 1898 and provided representation for Elvis Presley and Marilyn Monroe. Today, MySpace.com and Amp'd Mobile are among its clients.

Likewise, United Talent Agency, home to Jim Carrey and Johnny Depp, is representing Kuma Reality Games, which put out a reality video game based on the capture of former Iraqi dictator Saddam Hussein within three days of the event.

It's all part of the new digital world for Hollywood's talent agencies. They have represented actors, directors and writers and taken their 10 percent cut for decades. Now, their clients are rapidly morphing into video game creators, Web site founders and Internet auteurs.

To maintain their cut--no longer guaranteed in the wide-open new media world--the agencies are beginning to redefine themselves by creating digital media divisions. These new units are looking for talented individuals and cutting-edge technologies unique to the digital realm.

"Many of them have been creating digital media before digital media was hot," said Brent Weinstein, 31, who heads United Talent Agency's digital division.

Weinstein recently brokered a deal with Amazon.com to stream live "Fishbowl with Bill Maher," a weekly talk show for writers, filmmakers, actors and musicians.

The head of digital at the William Morris Agency, Lewis Henderson, recently forged a deal for one of the firm's clients, actor-comic Tom Green, to host a live call-in show aimed at young hipsters, podcast on the ManiaTV Web site.

"I've always considered myself a media pioneer, and live television over the Internet is the next frontier for me," Green said. "Of course, ManiaTV didn't know what they were doing when they agreed to give me complete creative control over my show and they'll no doubt regret it five minutes after the first airing."

He was kidding, of course, but his comments point up a reality for the agencies: the digital realm is often uncharted territory for their clients and the distribution and production companies with whom they deal, and the agencies are being counted on to bridge the two worlds.

When online book vendor Amazon.com wanted to move into film production, for example, it looked to UTA. The agency guided Amazon as it optioned the rights to Keith Donohue's best-selling novel, 'The Stolen Child." The terms of the deal were typically non-traditional: the online retailer was not required to put money up front. Instead, Amazon will put its online marketing clout behind the theatrical and DVD debut of the film.

The dynamics of the digital deals can be unusual, too.

UTA's Weinstein points to a trio of what he calls the "new breed of content creators" that call themselves Lonely Island. They created a parody video short last year called Lazy Sunday that used some digital images from NBC's "Saturday Night Live." When more than 5 million viewers clicked on the short via YouTube.com, NBC threatened legal action and demanded that the video be removed from the site. The viral video firm complied, but UTA and the short's creators were flooded with offers.

Game for video

Henderson admits he was no technophile when he started at William Morris in 1993, where he was charged with creating a new technologies division. Video games drew his attention.

"We did the first celebrity-driven video game with Bruce Willis," Henderson said. "We also helped Tom Clancy ("Hunt for Red October") set up his video business."

William Morris built a video game clientele spearheaded by skateboarder Tony Hawk with Activision Inc.

When "Pro Skater 2" became the best selling game ever in 2001, it was the equivalent of a $100 million film opening. In the past five years, with revenues of more than $6 billion, the video game industry has become an integral part of the Hollywood landscape.

That success spurred William Morris to move full speed ahead on digital. In May, Henderson was given a unit of seven agents charged with working with clients to create opportunities across all digital platforms, including video-on-demand, broadband and mobile. The team would look to represent tech companies to create partnerships with the media and entertainment industry. The division has offices in New York, Miami Beach, Nashville, London and Shanghai.

"We represent creative people who can come up with great ideas for video content," Henderson said. "We represent the creators of video games. We also represent actors who can do the voiceovers for video games."

William Morris has acted as a consultant and an advisor on a number of recent deals, including News Corp.'s $560 million purchase of MySpace.com. Among other corporate clients of WMA Digital are Gold Pocket Interactive, United Online and Amp'd Mobile.

Where's the money?

Prior to the formal launch of the digital unit, William Morris has worked with EBay, Sportsline (which became CBS Sportsline) and short film production company Atom Films.

William Morris brokered deals between Atom and "South Park" creators Trey Parker and Matt Stone and "Nightmare Before Christmas" director Tim Burton, and insisted that the talent all receive stock. When Viacom Inc.'s MTV recently shelled out $200 million to buy Atom--which had morphed into AtomShockwave--it meant a payday for William Morris' clients.

Both Weinstein and Henderson said that their agencies could be compensated for new media and digital deals in a number of ways. It can be a retainer fee or even minimal percentage of any sale they client might be involved with. In some cases, it can be an equity stake in the company.

In its deal with Kuma Reality Games, UTA receives a percentage payment rather than a retainer. The percentage would be based on the budget of certain games, which can range from $6 million to $15 million.

"Every deal is different," said WMA's Henderson. "We get compensated."