Nearly 90% of all TV shows are packaged by talent agencies, and nearly 80% of those shows are packaged by WME and CAA, according to data collected by the Writers Guild of America West.
In a review of the 2016-2017 television season, WGA West found that 87% of the more than 300 series produced that year were packaged by the agencies, and that “packaging is dominated by WME and CAA,” which accounted for 79% of all the packaged series.
The guild has been holding a series of membership meetings to discuss updating its 42-year-old agreement with the Association of Talent Agents – called the Artists’ Manager Basic Agreement (AMBA) – which the guild says is so outdated it’s left the door open to the growing threat of conflicts of interests on the part of the agencies.
Deadline obtained a copy of the study, which is being distributed by WGAW to members at the meetings it has been holding with writers as the guild prepares to renegotiate its agreement with the ATA.
According to the WGAW’s data for 2016-2017:
- WME was the solo packager of 84 series and shared packaging on 59 others
- CAA was the solo packager of 64 series and shared packaging on 61 others
- UTA was the solo packager of 35 series and shared packaging on 53 others
- ICM Partners was the solo packager of 14 series and share packaging on 30 others
- Paradigm was the solo packager of three series and shared packaging on 10 others
- APA was the solo packager of two series and shared packaging of one other
- Rothman-Brecher was the solo packager of one series and shared packaging on two others
- Gersh shared packaging on two series.
The packets also say that the “conflict of interest” inherent in packaging includes:
- Agencies are paid by the studios instead of by commissioning their clients
- Agency compensation is taken out of both the show’s budget and its profits
- Agencies have little incentive to defend or improve quotes (writers’ previous pay) because their compensation is not tied to the well-being of their clients
- Agencies often make more on the back-end than most creators
AMBA has never prevented agencies from packaging or holding ownership stakes in productions that employ their clients. Rather, it doesn’t allow agents to take their 10% commissions on projects for which they are also receiving a packaging fee. Union leaders, however, believe the big agencies are getting so rich and conflicted over their packaging fees that representing their clients is no longer their primary concern.
Packaging, however, is not the only problem. Under a section called “Agency as Employer,” the guild’s packet says the agencies – and WME and CAA in particular – are also involved in a “conflict of interest” with respect to producing content. “WME and CAA are becoming active in content production, financing and distribution,” with “projects set up at Netflix, Apple, Hulu, Amazon and YouTube,” the guild told its members.
WME’s “related production entities,” the guild says, include Endeavor Content, IMG Productions, Media Res and Bloom. CAA’s “related production entities,” the guild says, include Tornado Productions and Platform One.
To add historical perspective, the packet notes that a 1962 “Department of Justice antitrust lawsuit forced MCA-Universal, the largest agency/producer, to exit agency business.”
The guild has yet to reach out to the Association of Talent Agents to renegotiate the AMBA, but it’s certainly setting the stage for those talks by making the case that talent agents have a fiduciary obligation to put the interests of its clients ahead of their own.
“Agencies are fiduciaries” under California and New York law, and in most other states as well, the guild says, “with full obligation to their clients, including the obligation to avoid any conflict of interest or to make any deals that benefit the agent at the client’s expense.”
The role of a fiduciary, the guild told its members, is “to represent the interest of a client, with a moral commitment to put the client first. A fiduciary is expected to refrain from acting for his private advantage or otherwise contrary to the interests of his client; the fiduciary should fully, without compromise, assert the complete and unmitigated interest of the client.”
As a showrunner leaving one of the WGA meetings told Deadline: “The issues are really simple and clear. If your employer is representing you, that’s not cool. I think every writer understands that.”
“The ATA will respond to the WGA’s renegotiation proposals if and when they come to us with a request,” ATA executive director Karen Stuart told Deadline.