EXCLUSIVE UPDATE 10:30 AM: WME officially tell me that it has just canceled plans for its Phase Two attack on CAA. “We’re shutting it down. It’s not worth it. The fun we had is done,” the agency said. “It’s not worth it.” Phase Two was going to mock CAA’s lavish headquarters and company culture. WME also clarified that it gave orders to take down all of Phase One’s “CAAN’T” red-and-white slam ads, and by Tuesday night they were gone from the Century City Mall.

EXCLUSIVE PREVIOUS 8 AM: There has never been a single slam like this by one Hollywood agency against another that wasn’t behind closed doors. Now I’ve learned that WME isn’t done mocking CAA in public. Insiders tell me there’s an entire Phase Two attack planned that includes sentence-long “slogans” insulting the #1 Hollywood agency and thought up by the #2 agency. Oh, and it involves way more T-shirts. Maybe someone will talk WME out of going forward with it. Like this studio mogul who opined to me this morning: “Once, it’s a funny joke. Twice, it looks silly. And I predict it will backfire. Ari likes going to war with people. It gives him a certain street cred. If he asks my advice, I’ll tell him, ‘You did it. Now forget it.’” For anyone who didn’t read about Tuesday’s stealthy prank, WME was responsible for the “CAAN’T” ads poking fun at rival CAA posted in LA’s Century City Mall and La Brea as well as Santa Monica. WME also arranged for a busty brunette to wear a “CAAN’T” red T-shirt in the outdoor crowd televised on yesterday’s Today Show. “We thought it was funny. So we put it up. Someone did a logo here and arranged for the ads,” an insider told me at the time. “Everyone takes themselves too seriously. Have some humor.” The ads were placards with CAA’s signature red-with-white lettering and first noticed in 78 outdoor ads at the mall which is two blocks away from the talent agency’s headquarters. A website, CAANT.com, also went up online showing a recent Page Six item from the NY Post about a “recently nominated Oscar director” who “loudly groused in a high-level meeting about being frustrated with his Hollywood agency by yelling: ‘They should be called Caan’t! Caan’t, Caan’t, Caanttttttt!?’”