The price of beauty is getting beyond compare

Students of elementary economics, having learned that competition holds down prices, might well be confounded by recent events in the modeling industry, headquartered in the nation’s fashion capital, New York City. There an arrestingly rancorous competition, spurred by personal enmity among the four prestigious leading agencies, is driving prices up so fast that this $50-million business is more lucrative than at any time in its history. The battling agencies—Ford Models, Inc., Wilhelmina Models Inc., Elite Model Management, and Zoli—control 60 percent of the industry’s billings. They are bold and innovative merchandisers in a wildly free market that helps to generate billions of dollars in annual sales to consumers.

Underwhelmed by money

Advertisers complain that the cost of buying status in the form of pretty faces has become outrageous. But agency owners predict that in the near future, models, like free-agent athletes, will negotiate each job according to what the traffic can bear.

Consider this declaration by Jerry Ford, fifty-five, co-owner with his wife, Eileen, fifty-seven, of top-ranked Ford Models, Inc. He has just nailed down a $190,000-a-year contract for his model, Clotilde, to represent Shiseido’s flagship cosmetic line in Japan—and yet he says, “I’m underwhelmed by the money in modeling. A good model today should, with out any special contracts like this, earn herself $200,000 annually—hardly fabulous money for difficult work.”

Assertions of this sort, and the price hikes that have already been put through, indicate that the nature of the business has been up until now imperfectly understood, even by the people who pay for the pretty faces. The true competitors aren’t the models at all but the advertisers, who are bidding ever more generously for a limited supply of talent. “God makes models,” as Jerry Ford observes, and He doesn’t make many of them. The agencies compete for God’s children too, and have lately been doing so by offering them ever better deals, which of course pushes up prices. In other words, the agencies have only recently stopped underpricing their product.

Until three years ago, Eileen and Jerry Ford effectively controlled the worldwide modeling industry, and in earlier times they didn’t have to price so aggressively to do well. The symbols of a business whose shape, standards, and practices they largely invented, they run what remains the best-known and largest agency. Eileen Ford picks the “girls”—that’s still the word they use in this business—and Jerry markets them. The two are famous for their classy, well-bred, all-American blondes—Cheryl Tiegs, Lauren Hutton, and Candice Bergen. Now that their competitive instincts have been thoroughly aroused, they are feared and respected for their negotiating clout. But the Fords are also the snobbish, civilized gentry of what has become a bitchy, hurly-burly business.

Since 1946, when they sold their car and launched the private family company on $900, Ford Models, Inc. has grown from receipts of $250,000 on thirty-four models in 1948, to billings of $11.8 million last year for ninety-three male and 259 female models, the industry’s largest stable. Like the other agencies, they charge advertisers a 10 percent commission, and their models 15 to 20 percent. Their gross last year came to around $2.5 million. Of that sum, Fortune estimates that only $350,000 was brought down to the bottom line. That works out to a before-tax profit margin of 14 percent, about par for a business that requires heavy spending for stunning offices, lavish promotion, and around-theworld talent-scouting. Even in the last three very competitive years, the Ford billings, like the industry’s, increased by a total of about 30 percent. The Ford success has transformed modeling from an amateur pastime for idle society debs of the Twenties, who frequently forgot to bill their clients, into a highly paid, profitable, and disciplined profession guided by canny agents.

A beauty with brains

Jealous of their supremacy, the Fords loathe all rivalry. “Only liars like competition,” says Jerry Ford. In particular they rue the challenge to their laurels mounted by Wilhelmina Models Inc., the second largest agency. Wilhelmina Cooper, now forty, was the Fords’ top model in 1967, when she quit to found her own agency in partnership with her husband, Bruce, a former disc jockey and assistant producer of the Tonight Show.

After struggling against a cumulative $169,000 deficit the first five years, Wilhelmina rose rapidly by emphasizing areas the Fords had overlooked. Boosted by its reputation for developing superior black and brunette women models and for accepting less-than-flawless beauties who had commercial television talent, the agency last year billed $11 million. Television work produced nearly a third of the billings, the largest percentage of any agency. Unlike the Fords, who consider television only an adjunct of print and avoid all but fashion and cosmetics commercials, Wilhelmina has her models hawk everything from aspirins to floor wax. She is exultant about her success. “According to the Fords, we were always about to fold every minute until last year,” she says. “Now we have the same clients and together control 70 percent of the industry in New York, where three-quarters of the domestic business is booked.”

This was indeed true until 1977, when John Casablancas hit New York and precipitated the modeling wars. Casablancas, thirty-six, head of a principal Parisian agency called Elite, was once a trusted colleague of the Fords and Wilhelmina, with whom he used to exchange models. Eighteen months after invading his former business associates’ territories with Elite Model Management, Casablancas shook out billings of $4.1 million. Ford and Wilhelmina have retaliated with $11.5 million in as yet unsettled damage suits for breach of fiduciary trust and betrayal of verbal promises never to compete in New York.

Casablancas is undaunted by these legal actions. Elite is already the nation’s third largest agency and expects a $350,000 profit on anticipated billings of $6.6 million this year. This swift triumph, unprecedented in a business littered with the remains of failed agencies, has pushed the nine-year-old Zoli agency into fourth place. Owned by Hungarian-born Zoltan Rendessy, thirty-nine, Zoli this year expects to post $4 million in billings, some 40 percent of that sum to be derived from its esteemed men’s division.

The workhorses changed stables

Two unusual advantages gave Casablancas an instant head start in New York. From his four wealthy Parisian partners flowed an extensive line of credit to reinforce an initial capitalization of $500,000, including $20,000 for a public-relations campaign to put Casablancas in the gossip-column headlines, and $100,000 in legal fees to contest the Ford-Wilhelmina suits.

Additionally, Casablancas was helped by friendships with several of New York’s more powerful photographers, such as Patrick Demarchelier, Michael Reinhardt, and Alex Chatelain, and his reputation in Europe for representing international cover girls. He immediately attracted many of modeling’s biggest moneymakers to his fledgling venture. Five of Wilhelmina’s chief workhorses (worth an annual $400,000 in billings) and eight of Ford’s stars ($500,000 in billings) crossed to Elite. They were lured by promises of frequent European assignments and written guarantees for six-figure annual incomes. These prize acquisitions, and Casablancas’s knack for discovering hot new faces (his models were featured on nine of Vogue’s last twelve covers), have helped Elite achieve the industry’s highest income per female model. Elite’s 120 female models averaged $58,800 last year, compared with $32,800 at Ford and $42,500 at Wilhelmina. Casablancas himself attributes Elite’s ascent to its boutique size and relaxed, playful, European style of management. “I didn’t enter New York as an immigrant with a bag on my shoulder,” he shrugs. “I was well known and I knew enough to base my marketing goals on a negative—the deep dislike clients had for the de facto monopoly Ford and Wilhelmina had created.”

Since Casablancas hit town, rates for top female print models, those who are super stitiously regarded as having the indefinable mystique and mass appeal that make them “lucky sellers,” have doubled, from $750 to $1,500 a day. One or two have hit $2,000. Day rates for beginners shot up from $600 to $750, and those for male models, one of the fastest-growing segments of the industry, from $750 to $1,250. The only clients spared these high charges are the fashion magazines, which pay all models a miserly $90 to $150 a day to cavort in their editorial pages. Nevertheless, models rush to work for them because fashion magazines provide the showcase from which national marketers hire models.

A costly revelation

In what was, but was not yet generally perceived to be, a seller’s market, two events propelled rates upward. In May, 1977, Elite broke with tradition and eliminated all listed prices, making it possible to maneuver fees according to the client. Then Time magazine’s cover story on superstar Cheryl Tiegs, in March, 1978, reported that her basic daily rate was $2,000. Soon every New York model who considered herself Tiegs’s equal tried to move up toward that rate. While the agencies still quote standard fees for most of their models, the top models’ ego trips now keep the upper tiers of the industry’s rate structure in constant flux. Beauty, as Jean Cocteau once observed, has enormous privileges.

But day rates tell only part of the story. In the last few years, the “beauty bonus,” or “nation-al-advertising use charge,” introduced by Jerry Ford, has become standard in the industry. Its acceptance has increased models’ income from the print media by 40 percent, and print has traditionally been the bulk of their and their agencies’ earnings (three-quarters of the leading agencies’ billings derive from print assignments). Whereas advertisers once paid models the basic rate to own and use their pictures forever, they now pay a use charge, usually equivalent to the day rate, for each three months one picture runs in one type of medium (billboard, point-of-purchase, magazine, or newspaper advertising). Models who formerly earned $600 for a day’s posing can today earn from $6,000 to $15,000 for that one day’s work.

In television advertising, agents are negotiating contracts far more generous than the scale rates of the Screen Actors Guild ($250 a day and a guarantee of thirteen weeks’ residuals). Lucrative deals have been won by top models such as Shelley Smith (the Ford agency) and Connie Sellecca (Wilhelmina) who can talk like “real people,” TV-land’s jargon to differentiate actresses from so-called “pretty people,” who don’t talk on camera. Top models who can make it as “real people” receive their high daily rate, which with residuals averages $7,000 to $10,000 per commercial and can approach $30,000 for one day’s work. Television contracts, unlike print work, give marketers exclusive rights to a model in their product category as long as the ad is on the air. But television, despite these new attractions, represents just a fifth of the model agencies’ billings. For one thing, the agencies’ commission is limited by the Guild to 10 percent. For another, few print models can act.

By and large, advertisers have been routinely howling highway robbery at these staggering price hikes while privately acknowledging that they have nowhere else to turn. How much models contribute to advertising’s effectiveness is of course unquantifiable, but their cost is still insignificant compared with the profits that successful campaigns centered on their winning looks can generate.

Sears caves in

Most vociferous in their complaints are the cosmetic and fragrance manufacturers and the mass-order catalogue houses that rely heavily on models to move products. Sears boycotted Ford male models for two years because they were too expensive, but has recently capitulated and returned to the fold. Among the cosmetics houses, only Revlon gets away without paying usage fees, arguing that Revlon ads, like photographs in the fashion magazines, are prestige-building showcases for models. The rest of the companies pay the full price, if grudgingly, because as Stewart Brown, Max Factor’s advertising director, puts it, “We kid ourselves into thinking there are only twenty to thirty girls with perfect skin that our advertising can consistently use, and we all compete for the same girls. A cosmetic company’s management can’t be persuaded to risk an unknown for their image.”

These recent rate changes mean that models who two years ago garnered the industry’s maximum of $100,000 annually now could make $200,000 or more. But most cannot endure the punishing schedule required to join that league. New York’s top three agencies each list fifteen to twenty models grossing over $100,000 a year—a not implausible claim, considering that twenty weeks of catalogue work for Sears, Montgomery Ward, or high-class retailers like Saks Fifth Avenue would put a $1,000-a-day model in that bracket. (Catalogues remain the income backbone of modeling, representing nearly half of Ford’s and Wilhelmina’s billings last year, and a quarter of Elite’s.)

For the world’s highest day rates, fashion models have been flocking in the last five years to Japan. While Paris breaks in new models with easily obtainable and prestigious assignments, and Germany’s modeling industry offers Europe’s best paid work, Japan is unmatched for quick profit. It is the world’s second-largest cosmetics market, and one avid for all things Western, including faces that add an exotic touch to advertising campaigns also featuring local models. American models are paid $1,000 to $5,000 a day. Travel time to and from Japan is munificently compensated as well.

With the first Tokyo office of any American agent, Casablancas has got the jump on his competitors. Elite’s Japanese franchise serves less as an outpost to solicit business than as a way station to help models cope with the bizarre contrast of lonely work in an entirely foreign culture and star treatment in other matters, such as limousines and deluxe lodging. Now that he appreciates the size of the Japanese market, Casablancas expects to expand his stake into a full-service agency billing $1 million next year.

The consecration of a model’s career, and the business’s only secure income, is the exclusive contract to represent cosmetic products. Being the Avis Rent A Car or Burlington hosiery girl is not only less remunerative but is considered far less prestigious. The coveted cosmetics contracts range from $50,000 to $300,000 annually and last up to five years. They require only fifteen to thirty days of work a year. Ford has corralled the great majority of the existing fifteen or so such contracts. Lancôme has signed Nancy Dutiel; Revlon has Shelly Hack for Charlie cosmetics and Lauren Hutton for Ultima II.

The notion of long-term exclu-sivity, Jerry Ford’s inspiration, takes into account beauty’s perishable nature, easily depleted by time and overexposure. The Fords’ operating motto is that a girl’s face is her fortune and that its brief bloom should be lavishly compensated. Models’ careers average only six years (except for male models and those female models who specialize in showing clothes for couturiers). The Fords argue that even this brief life span can be endangered if advertisers use a girl so frequently as to make it impossible for her to work for their competitors. On their part, advertisers agree that an exclusive image builds sales, and they are increasingly willing to compensate the model. When the twain meet in a contract, it can easily quadruple a model’s income.

The closer the camera zooms in to a face, the more exclusivity costs the manufacturer. To own Cheryl Tiegs’s lips, eyes, and face as the worldwide image of Cover Girl makeup, Noxell Corp. is paying a grand total of $1.5 million over five years—the Fords’ biggest contract. Howeyer, Noxell doesn’t own the rights to Tiegs’s legs or her hair; the latter belongs exclusively to Bristol-Myers’s Clairesse hair coloring. Her legs are currently up for grabs.

Why Cheryl is worth her price

F. Stone Roberts, a senior vice president at SSC&B, which has the Cover Girl account, points out some hard-headed financial reasons for having a contract with the likes of Tiegs: “Eventually it becomes more efficient to contract a girl as insurance against her upscale mobility. It prohibits her agency from holding us up for a great deal more money after she’s done three movie parts. We pay more for models than any industry because their faces represent our end product: how she’s presented in ads is what we tell the public our makeup looks like. And that’s not the same thing as how a customer looks after eating a cheeseburger.”

Even without major contracts, a top model is an extremely valuable commodity from the agent’s point of view. If she attains a ten-year career, she will gross from $2.5 million to $3 million and create $500,000 to $750,000 in income for her agency—roughly half from her commission and half from the client. So the secret of the business of model management is not so much merchandising the girls—demand follows the winners—but finding them in the first place and then keeping them from defecting to competing agencies. Two things make this an arduous art: models switch agencies on whim (“A full moon will do it,” sighs Wilhelmina), and only maybe one in 1,000 girls has the potential to model at all. Not only must they stand over five feet seven inches, and look more marvelous than the next girl after long, hectic hours of uncreative labor, but the unforgiving eye of the camera has to agree.

To locate modeling’s next celebrity, agency owners scour such places as California, Arizona, Ohio, Texas, South Africa, Scandinavia, and Germany, all renowned for breeding the great bones and long limbs that make outstanding models. The agents spend a quarter of their time stalking girls at beauty pageants, obscure modeling schools, and, most important, among the rosters of regional agencies here and abroad. Scouts around the world on retainer or commission redouble the owners’ efforts. And the models themselves and the agency staff also constantly recruit.

The agency owners’ social connections multiply, Argus-like, the number of watchers. For instance, such international jet-setters as Opel heir Gunther Sachs and Princess Caroline’s husband, Philippe Junot, look out for Casablancas, as do his old school chums from Le Rosey in Switzer land. Eileen Ford has a lock on the American upper-echelon WASP possibilities. The magic of the Ford name had for many years also given Mrs. Ford first choice not only of the 5,000 American girls who annually haunt her office seeking to become rich and famous, but of European models as well. For the foreign agencies, remaining in her good graces is still important. When a model from their stables succeeds in New York, the Fords pay them 3 to 5 percent of her first year’s income.

The battle for Swedish blondes

Casablancas’s vendetta with Ford has turned Scandinavia, after America the world’s largest breeding ground for models, into a battlefield. As the first agent to scout abroad, Mrs. Ford is if anything better known in Scandinavia than here. She shares with advertisers a passion for blondes whose inoffensive, wholesome elegance always sells more of anything. As Casablancas tells it, three years back Mrs. Ford swept through Scandinavia asking their shared sources to work only with Ford. Several desperate trips later, Casablancas won the major agent in Lund, Sweden, to his cause and replaced his Stockholm scout, whom Mrs. Ford had hired away. But he lost other Swedish agencies to his rival. Casablancas counts as some compensation being married to the celebrated Danish model, Jeanette Christiansen. His wife’s fame in her home country brings many Danish teenagers to Elite first. Here and abroad Casablancas offers finder’s fees of $100 to $1,000 to any one who discovers a model he accepts, a practice denounced in the industry as smacking of a flesh market.

Unclaimed new talent is fair game for strenuous wooing. Last spring eighteen-year-old Joy Turman received a fusil- lade of letters, visits, and calls in her Tyler, Texas, home from Casablancas, Ford, and Wilhelmina’s French connection, Paris Planning agency. Casablancas spotted Joy first in a Texas photographer’s portfolio, but Eileen Ford followed close behind with a contract in the mail. Next in line was a Paris Planning scout with a much appreciated ticket to Paris. Joy intended to use the ticket after graduating from high school, but then three hours of phone conversations with Casablancas convinced her that she should visit the New York agencies before promising anything. Casablancas flew her and her mother to a New York hotel for an inter view. Seeing Joy for the first time in New York, Casablancas ardently delivered his sales pitch, but later gamely turned her over to the Fords, who took her to dinner at the 21 Club. Joy signed the next day with Elite, attracted by its small size and Casablancas’s enthusiasm. “We played the game fairly,” says Casablancas, who lists Joy at $750 to $1,000 a day. “She’ll be a big star.”

The first two years are tough

For all the trouble agencies take to locate new talent (even paying boyfriends to deliver girls from one agency to another), they don’t create stars. Rather, they open doors to those who do: the photographers who take test shots for the models’ portLfolios and the editors of the fashion magazines who give them their first big break. This process, the blooding of a model, may take a year, if only to allow time for a girl’s eyebrows to grow out or to send her abroad for photographs and on-the-job training. After that, getting work depends on a beginning model’s initiative and stamina for making the rounds of the advertising agencies and magazines and selling herself to prospective clients. Not until a girl has established herself are the agencies able to help much to increase her bookings. Cold-blooded cornmon sense requires this procedure, for in modeling many are called but few are chosen. Only 1 percent rocket to instant recognition; one in two newcomers quits; the rest slog through two or three years of erratic earnings and then may or may not break through into big money. Few plan for the future when they will no longer be salable products, and most, once successful, have a year where they blow all their earnings on clothes, boyfriends, or week end trips to Europe. Agencies drop a model who after a year and a half doesn’t seem likely to repay the $25,000 in staff time and overhead expended to promote her.

For their part, the models need agencies to insulate them against the business’s grueling physical and psychological pressures. As it is, many models end up emotional basket cases. “Girls come and go,” says Francesco Scavullo, the fashion photographer. “This business eats them up and spits them out. If they’re lucky, they can be spit out as an actress, singer, or wife.” Agents must coddle and flatter models’ fragile egos because clients won’t pay for photographs of their insecurities. For this, each agency has its own unique style. Tartar Eileen Ford mothers models with efficient intimidation. Wilhel mina provides a distant symbol of beauty and success to emulate. Zoli is everyone’s kindly brother, and Casablancas the flirtatious older admirer.

But when the commodity being managed is an impressionable teenage girl prone to tantrums, doldrums, illness, and manipulation by Svengali-like boy friends, complete control is impossible. Contracts, once merely handshakes for new recruits, are now binding, self-re-newing, and across-the-board at Ford. (Wilhelmina and Elite have looser ties with their models, and that looks like the new trend.) At Ford, even the “bookers,” who man phones and arrange schedules, are under contract not to steal models if the booker changes agencies. To the top booker and other staffers she lost to Elite, Mrs. Ford sent Bibles marked to open at Mark 14:18: “And as they sat and did eat, Jesus said, ‘Verily I say unto you, One of you which eateth with me shall betray me.”

A more benevolent and less tight-fisted deterrent than threats and breach-of-con-tract suits is the agencies’ intense cultivation of their models’ loyalties, a process one agent likens to “taking our brand.” Casablancas explains: “New girls before they leave the office to make their rounds are offered everything they need to ensure they don’t succumb to other agencies’ offers.” “Everything” includes plenty of counseling, help in finding an apartment, and generous loans of rent and food money. These encourage in greenhorns a compliancy and gratitude already immense for being admitted to the agency in the first place.

They saw the Pope

In such matters, Eileen Ford excels. She puts new girls up for several months in her East Side town house so they won’t be prey to other agents on off-hours. On weekends, she whisks them to her Connecticut country home for exercise, good air, and controlled society. The boarders’ early bedtime freshens them for the next day’s photography and reassures mothers that their daughters aren’t becoming as sophisticated as the must photograph.

“When I took my sixteen-year-olds to Rome for work,” declares “the Godmother” of modeling, “they not only saw the Pope, they heard the Vatican choir and learned by heart every figure on the Sistine Chapel. If that’s managerial, then I’m managerial. They weren’t out till 3:00 A.m. at Jackie O’s with fast crowds, like girls from other agencies. Who’s to teach these children values if we don’t?”

What contracts and cultivated loyalties can’t do, bookers do. They walk the fine line between ensuring that top models work continually and that fast-rising models earn enough to stay encouraged. When clients request a certain look rather than a certain girl, or when the requested model is busy, bookers have some freedom to hand out the jobs, and fees, in morale building ways. For their star earners, agencies bend over backwards, encouraging them to determine their own rates and their availability. Finally, frequent and lavish parties ensure that models don’t leave in a huff believing they’ve been ignored. “Agents act as madames—it’s one way to control the girls,” says a veteran model. She claims that her engagement was almost torpedoed by Mrs. Ford, who, she says, was afraid of losing influence.

But no agent can stop a model from curtailing her career by becoming an actress. Exasperation at losing major stars to film and TV bookings led Wilhelmina last year to invest $300,000 in a new Los Angeles office specializing in such things. In a sense, Wilhelmina’s move closed the barn door after the horse had escaped—she’d already given up many models, including Pam Dawber, of Mork & Mindy, to other theatrical agents. Wilhelmina predicts the new venture will turn a profit next year, but her California competitors say she has a long way to go before Hollywood will take her seriously as a theatrical agent.

Tomorrow the world

Alone among the top agents, Casablancas has ambitions that encompass an eventual international network of agencies backed by modeling schools. This year, in quick succession, he started a modeling school in San Francisco, opened a Los Angeles office for print assignments, and bought minority shares in a rival Paris agency and in Models One of London. “I aim to be autonomous,” he explains. “I no longer want to deal with two-faced agents who promise me a model they also promise to six of my competitors.”

To maintain their leadership, the Fords are betting on their reputation as the Cadillac of the industry. They refuse to expand either domestically or internationally, much less follow Wilhelmina into the entertainment business. They don’t try to represent their models in television and film careers after their first bookings. “We’re going to stay in New York and not try to run the world,” says Jerry Ford. Eileen Ford’s final word is even more direct. She comes down on her competitors’ expansive plans this way: “They’re all bonkers. Why should we vie with some of our best friends on the Coast and abroad for the little bit of business in Los Angeles or Europe? We have all we can do to run our business in New York.”