ATA Lashes Out At WGA Over Its “False Narrative” About Negotiations For New Agency Deal

The Association of Talent Agents lashed out at the WGA today, claiming the guild has created a “false narrative” about their ongoing negotiations for a new franchise agreement. It also accused the WGA of violating the terms of their existing agreement by trying to peel agents away from the ATA.

In a sternly worded letter to guild leaders, ATA executive director Karen Stuart also gave guild leaders an ultimatum: publicly confirm that they’re willing to return to the bargaining table in good faith, or future talks are off.

Stuart, meanwhile, also sent a message to her members today that disputed, point-by-point, comments made by WGA West president David A. Goodman at a WGA membership meeting prior to the start of the negotiations.

The WGA, she said, “had already prepared a script and released a video of its President David Goodman publicly declaring that WGA and ATA were ‘at war.’ Mr. Goodman pledged that there is ‘no room for compromise’ with the ATA. David Goodman’s speech runs completely afoul of the value and respect that ATA members have long held for the Guild – it also included a number of misleading or factually inaccurate statements that need to be corrected.

See her response to Goodman’s comments here.

The WGA, which has said it is not willing to compromise on its key demands – to end packaging deal and get the agencies out of the production business – says it will implement its Code of Conduct for agencies if a deal can’t be reached by April 6, when the existing pact, known as the Artists’ Managers Basic Agreement, is set to expire.

The guild meanwhile sent its own volley in the ongoing dispute Monday, sharing stories of its members’ dealings with agents and agencies regarding packaging deals, the issue at the heart of the contentious renegotiations.

The ATA’s Stuart on Monday charged that immediately after last Tuesday’s meeting, the guild, “in violation” of the current agreement, “attempted to directly solicit members of the ATA to break away from our association. You sent formal demands, not just to our member agencies, but to each of the individual agents employed by our member agencies.”

The guild, she wrote, then “followed that by withdrawing the meeting dates you suggested in order to set meetings with managers, lawyers, and others – essentially, everyone but the agents who have been asking for a year to engage with you on these issues. Furthermore, you then publicly asserted that your intention is not to reach a meaningful compromise and a new long-term agreement, but to divide the ATA and induce agents to breach their contracts with their ATA member employers.

“Finally – despite our providing ATA’s position on all your proposals last Tuesday and our committing to meet with you multiple times a week, you accused us of failing to respond to you or tell you our positions. And, now, you’re publicly threatening to sue us – on a made-up legal theory –for something you agreed, for the past 43 years, was fine for us to do.

“These actions – coupled with your own rhetoric – transparently demonstrate that you are not intending to negotiate in good faith. As such, before we meet again and spend the time and effort to mend the relationship between your guild and our association that you seem desperately to be trying to break, we need to know that you are actually willing to do so.”

ATA member agencies, she wrote, “Will not be divided. And we will not play games with our clients’ livelihoods. Writers – our clients, your members – deserve much better than this. We thus remain ready and willing to meet with you – as often and for however long it takes to reach common ground – but both sides must come in good faith. We are committing to do so. Are you? If so, we need you to confirm, in writing and publicly, that you are prepared to negotiate on all issues in good faith with us.”

“We have seen all your tactics at work,” she told guild leaders. “There are many different ways to achieve a successful deal for ATA and the guild. But not being open to negotiate in good faith, and instead “going to war” will not work. It will hurt your members, and it will hurt others in the industry. We remain ready, willing, and able to negotiate an agreement in good faith. Is the same true for you? Because if it’s not, we don’t see any reason to keep meeting. We await your response.”

Goodman, however, said Stuart is putting words into his mouth.

“The WGA never said we were ‘at war’,” he said. “Deadline put that in a headline. The fundamental problem here is that when the major agencies hear their clients are collectively upset they refuse to accept there’s a problem. But these anecdotes from writers tell the truth. The ATA has not made ONE concrete counter proposal in negotiations, only vague promises that they will help.  We’ve been hearing these promises for a while, and the writers of the WGA are demanding action.”

Stuart also took the guild to task for numerous “misleading,” “misguided” and “factually wrong” statements she said the guild has been making about the negotiations, packaging and the agencies’ production interests.

“We also want to take the opportunity to address some specific – and factually wrong – claims you have made to your members and the public, in the hopes that this gamesmanship can end and we can start the serious work of coming together to reach a new agreement,” she told guild leaders.

“You assert that the guild has authority to make a ‘power grab,’ remake Hollywood, and impose sweeping changes affecting not only writers and agents but also actors, directors, producers and even studios. What you are calling a ‘Code of Conduct’ is not, in fact, about agents’ conduct. Rather, as you have candidly acknowledged, your proposals are a sweeping attempt by the WGA to remake the entire industry, affecting the livelihoods and businesses of all who earn their living in Hollywood.

“As we told you last week, in telling your members that the guild has unfettered legal authority to unilaterally impose such restrictions, you are sorely misleading them. Equally misguided is your claim that agents and agencies will flock to your ‘Code.’ Our agencies – in their diversity of size, client base, and operations – represent a tremendous range of choice available to your members, our clients. We strongly believe that our clients deserve that choice, and that your proposed ‘Code’ would take it away from them.

“Notwithstanding your attempt to divide ATA members by attempting to sign them to your ‘Code’ directly – in violation of section 4(a) of the AMBA – rest assured that all ATA members will continue to advocate for all our clients, including writers, and will reject your self-described ‘power grab,’ which we believe would harm not only writers but also countless others throughout the entire industry for decades to come.

“And your timing could not be worse, as you have chosen to do so right at the moment that the creative community is more challenged and threatened than ever before by global corporations armed with billions of dollars and new technology being quickly adopted worldwide. ATA members will stand together on this, and accept only a negotiated agreement that we believe is in our clients’ best interests.”

With respect to packaging, in which agencies bring together the creative and financial elements of a project, Stuart told the guild’s leaders that “You publicly claim that, for packaging services, agencies are paid ‘3% of the network license fee,’ ‘3% deferred until net profits,’ and ‘10% of the show’s gross profits for the life of the show.’ You further assert that this backend is ‘often far more than the show’s creator earns.’ Again, as you know, these assertions are simply not true.”

The first “3%” of a package is, in reality, a smaller amount – generally 1.5% or less of a license fee, she said. “This fee enables agencies to relieve their clients of the burden of paying commission on packaged shows. Even on a successful series, this upfront fee is often less than the agency would make from simply commissioning the talent on the show. Package fees are capped. And fees are often split between agencies, reducing this fee to 0.5% or 0.75%. Shows that go four seasons or less virtually never hit backend, and these front-end fees are all the money the agency makes on the show. The clients keep their full salary and pay no commission to the agents.”

The second “3%,” she wrote, “is illusory. It is formally eliminated in most streaming contracts, and generally is not paid in most other situations, either, because very, very few television programs – even those that run for many seasons – reach the ‘net profits’ stage that would provide such a payment.”

And as for the final 10%, agencies “are never paid 10% of gross profits. We have explained this to you. Rather, they are paid a percentage – sometimes 10%, sometimes 7.5%, and frequently half that or less due to splits between agencies – of modified adjusted gross profits based on the highest-participating client’s definition. What does that mean? It means that agencies don’t participate in profits until their client does. And it is not true that agencies ‘often’ earn ‘far more than their show’s creator.”’ In those instances where a show hits backend, the agency’s clients who created the show typically make far more than the agency does – and they take home the same backend amount they would have had the show been simply commissioned.

“Similarly, you claim that the money paid by the studios in package fees ‘could be used to hire more writers and pay writers more money.’ What is that claim possibly based on? This claim defies history and fact – just ask any studio. In fact, writers’ salaries on packaged shows and non-packaged (commissioned) shows are not different.

“You also claim that the agency’s packaging work “is normally finished before the pilot is shot.” This too is not true. Packaging agencies provide services to shows throughout their entire life cycle. They continue to help the show find talent, they support the show in network negotiations, and they find new homes for cancelled shows. They also regularly negotiate new and better compensation packages for the writer clients – who are typically on two-year deals – over the life of the series, while the package fee remains exactly the same.

“Finally, you claim that agencies force writers into working on packages against their wishes. This is not true. Our clients often ask for – no, demand – packages, because they understand when agencies package shows, clients benefit. The work we do alongside and in alignment with our clients gives the written word the best chance of being seen. And, in the rare circumstance our clients don’t want a package, we accommodate that. Indeed, the current AMBA, to which we voluntarily agreed 43 years ago, requires the same.”

The guild, she wrote, also has it all wrong about the agencies’ forays into production. “You also claim that agencies are ‘moving to become our employers by becoming producers and owning content,’” she wrote. “Again, that is flatly false. No ATA member agency employs writers. None. Rather, some agencies have affiliates – legally separate businesses with separate management and separate operations, housed in separate offices and with separate employees – who perform content-related services. These entities are legally and operationally separate businesses from agencies.

“Controls are strictly in place to ensure that all transactions are arms’ length and no agency client is ever coerced into working with an affiliate. That said, as we have told you, we are willing to listen to your concerns and discuss formalizing some rules of the road to assure clients that their interests never will be compromised. hile you claim that ‘a few writers will get a great deal’ from these affiliate companies but ‘most writers will get screwed,’ that claim is baseless. Endeavor Content, WIIP, and Civic Center Media offer better deals to talent than the major studios and in fact were launched to provide writers with more opportunities, better terms, and more creative control. Indeed, one of your own board members has described his ‘terrific’ experience working with one of these separate companies. They are simply another important creative option – in a climate of ever-shrinking options – available to writers – one of the many choices offered to them through our diverse agencies.”

“And you know these things,” she told guild leaders. “We’ve discussed them. Yet you continue to misstate the facts and confuse the issues. Misinformation serves no one, and it makes it harder for all of us to work together to create a meaningful new agreement. Hard work, not rhetoric, is what is needed.”

And in the area of film financing, she wrote: “You claim several unnamed ‘independent – mostly film – producers’ believe that agencies helping find financing or distribution for films somehow hurts the independent film business. We don’t know with whom you spoke, but as we explained to you in our meeting last Tuesday, we strongly disagree. So do most in independent film. Just ask them. In fact, agencies helped secure financing and distribution of more than 1,000 independent films over the past five years – films like La La Land; Manchester by the Sea; Book Club; Whiplash; I, Tonya; Call Me by Your Name; Hidden Figures; Room; I Feel Pretty; Loving; Brooklyn; Nocturnal Animals; Ben is Back; Three Billboards Outside Ebbing, Missouri; I Am Not Your Negro; Destroyer; and Foxtrot.

“The agencies’ work in financing and distributing these films didn’t hurt them – it made those films a reality,” she wrote. “Our agencies have departments with dozens of people working to make these projects happen. Assisting in film financing generally is not a highly profitable area for agencies – rather, it is more often a loss leader service we provide for our clients. We do it because our clients value these projects, because independent producers generally do not do this type of work, and because studios largely have abandoned producing these types of film and are not willing to invest in these kinds of passion projects. These films are the vehicles that oftentimes move artists’ careers forward and enabling their agents to negotiate better terms and more controls on subsequent work. Whatever your unnamed sources might be telling you, the truth is that, had agencies not stepped into this gap, many of these important, diverse, and groundbreaking works simply would not have been made and released. Simply commissioning these low-budget passion projects does not come close to covering even a small percentage of the investment agencies make in these departments, nor the additional resources needed to find independent financing for our clients’ films. If you don’t want agencies to perform these services for your members, who do you expect to step into the gap?”