WGA, Talent Agents On Brink Of All-Out War: How We Got Here

A look back at how we got here:

The WGA’s current franchise agreement with the ATA – known as the Artists’ Managers Basic Agreement – hasn’t been renegotiated in 43 years. It allowed packaging, but the guild was never happy about it, even when it signed the deal in 1976.

The guild began holding a series of membership meetings in March of last year to lay the groundwork for the renegotiation of the agreement, saying that there was a growing concern among its members about the “conflict of interest inherent in production and packaging.” In interviews with numerous writers leaving those early meetings, it was clear that membership support for the guild’s goals was strong and growing stronger. “We are united” was the common refrain.

The guild took the first big step down this path on April 6, 2018, when it served the ATA with a 12-month notice of termination of their existing agreement, and then presented the ATA with its list of proposals, which it said were designed to “realign” the talent agency business.

A few weeks later, ATA executive director Karen Stuart slammed the guild’s proposals, saying “It’s hard to understand the WGA’s contention that it should be able to dictate what kinds of work talent agencies should be allowed to do and which agencies its members should be allowed to hire.”

“Given how well this agreement has worked over the years,” she said, “and the fact that never in all that time has the WGA formally contacted the ATA to object to any of its provisions – we found the announcement as puzzling as it was surprising. Attempting to take away from agents opportunities and the right to commission traditional services will not benefit the writers; rather, it will have the opposite effect.”

“The fact is that many of the practices that the WGA presents as problematic,” she said, “create exactly the opportunities its members have been demanding from their agents: access to other agency clients to help advance their projects, innovative deal strategies, aggressive negotiating tactics, and an expanded array of services for the writers and the talent community more generally.” Nevertheless, she said, “the ATA and its members are committed to bargaining in good faith, with the objective of ensuring that the interests of writers are served.”

Last August, Stuart reached out to the guild with an offer to sit down for informal talks in advance of formal negotiations, saying that “It is our desire to work together to find the right solutions so that we can most effectively face the collective threat posed by a changing industry. Such an initial discussion, she told the guild, “is appropriate before we sit on opposite sides of the bargaining table.”

WGA West executive director David Young, however, ignored and then rejected her offer nearly two months later, telling her that “the guild is prepared to meet with you in ample time to reach a new agreement.”

Then he blamed her for SAG’s failed attempt to renegotiate its own franchise agreement back in 2002, even though SAG’s own membership had voted down the deal that the union’s board had approved. “In 2002,” he told her, “the ATA agencies busted the SAG franchise agreement over your demand to be allowed to become producers. Given that similar concerns are part of our 2018 proposals, we do not assume that partnership rather than conflict will prevail, but we remain hopeful. In that spirit we look forward in due time to our formal discussions with you.”

The WGA’s formal talks with the ATA didn’t begin until Feb. 5, 2019, with the ATA floating a compromise in which packaging deals would be transparent structured in a way that agencies would never make more money than showrunners on back-end participation – a large profit source for really successful shows.

After the meeting, however, the ATA accused the guild of not responding to its counter-proposals and expressed “serious doubts about the sincerity of WGA leadership’s desire for a negotiated solution.” Young called that “misleading and pathetic.”

Prospects for a negotiated settlement dimmed further on Feb. 13, when WGA West president David A. Goodman said at a membership meeting that there was no room for compromise on the guild’s key demands. “There are negotiations where there is no middle ground, where there are basic principles that are not subject to compromise,” he said.

“Our collective power here is the power of divide and conquer,” he said, acknowledging that “We are making a power grab. A necessary, proper and fair power grab.”

“We have of course already been called unreasonable by the agencies, and this will continue,” Goodman said at the meeting. “Be prepared. As writers we are often filled with self-doubt and a desire to be seen as fair, reasonable and willing to compromise. But it is crucial for us to understand: there is no meaningful compromise where conflict of interest is concerned. It’s a binary choice. Either agencies put our interests first and make their money from our success or, like now, they will continue in the business of maximizing their own success while writers suffer. We hold the cards here – let’s not allow our own sense of fairness to be wielded against us in this agency campaign.”

The ATA fired back, accusing the guild of creating a “false narrative” about the negotiations and violating the terms of their existing agreement by attempting to peel agents away from the ATA through its “divide and conquer” strategy. To date, only one ATA’s smaller member agencies is known to have done so by signing the guild’s Code.

In a sternly worded letter to guild leaders, Stuart gave guild leaders an ultimatum: publicly confirm that they’re willing to return to the bargaining table in good faith, or future talks would be off. She also sent a message to her members that disputed, point-by-point, Goodman’s comments, saying that “The WGA’s proposed ‘Code’ is, in their own words, a ‘power grab.’ It is a sweeping attempt by the WGA to remake the entire industry, affecting not only writers and agents but also actors, directors, producers and even studios.”

A few days later, the guild threatened to sue the agencies, claiming that packaging fees “represent illegal kickbacks to an employee representative under federal labor law.”

The two sides returned to the bargaining table on Feb. 19. Those talks appeared to be more productive than the first, with a source telling Deadline that “There was more dialogue and more substantive discussion than in the first meeting, so that was a step in the right direction.”

Indeed, two days later, the WGA made three modifications to its original proposals, the most significant of which was the withdrawal of a proposal that would have prohibited agents from collecting their 10% commissions on writers’ scale – the minimums negotiated by the guild. “This was a difficult decision,” the guild said. “Protecting the full minimum for writers at scale remains a valid goal. Yet many smaller agencies argued persuasively that, without the ability to charge commission on scale, they could not afford to invest time and effort nurturing the careers of entry-level writers. And we heard from a significant number of anxious members concerned they and other newer or lower-level writers would simply be dropped by their agencies.”

This show of flexibility was an encouraging sign, but on March 4, Goodman told his members that “The parties are at impasse,” which he said “happens in every negotiation where there are differences so strong that they can only be resolved by action away from the bargaining table.”

Stuart fired back, saying that the talks were not at an impasse, that the “ATA has not withdrawn from negotiations and is committed to developing a new agreement,” and reaffirming “our willingness to negotiate in good faith on each and every WGA proposal.” This, she told guild leaders, requires “only the same good faith commitment from you.” Young responded by saying, “We are of course willing to meet. We hope to reach a new agreement.”

Talks resumed on March 12, just hours after the WGA released a report that accused the big agencies of operating like a “cartel.” Talent agencies, the guild said, “have represented Hollywood actors, writers, and directors for almost a century. But what began as a service to artists in their negotiations with film studios has become a cartel dominated by a few powerful agencies that use their control of talent primarily to enrich themselves.”

And in a phone-in press conference just before the negotiations were to resume, Chris Keyser, the co-chair of the guild’s negotiating committee, said that “Packaging fees and agents’ production arms make a mockery of the fiduciary duty we are owed by our representatives. Yes, we have taken too long to demand these practices end. But the persistence of a corrupt system does not make it right.”

Later that day, the ATA offered the guild a deal that would increase transparency and disclosure in agency dealings with writers but would not eliminate packaging fees and production deals with affiliates – the guild’s two main objectives in the negotiations.

“We come to you with a solution to make our industry function more effectively and fairly for all,” ATA president Jim Gosnell, who is president and CEO of the Agency for the Performing Arts, said at the beginning of the session. “One thing is certain. If we are to come up with a joint agreement, which I know our clients desperately want us to have, then we need to roll up our sleeves and get to work on a constructive process that will result in an agreement that works for everyone.

“We need to avoid the name calling and divisiveness that get us nowhere and will only set us back. Your agents are not your enemies, and they do not want to take advantage of you.”

“At the end of the day,” he told the WGA team, “the industry is looking to us to find common ground and to develop fair and reasonable solutions to these issues. They couldn’t care less about our bickering and unproductive rhetoric from either side.”

The WGA called the bargaining session “a small step forward for the parties,” but said “all major issues are still on the table.”

The two sides met again two days later – their fourth trip to the bargaining table – and the guild presented the ATA with its counterproposals. Goodman opened the session by making conciliatory remarks.

“I want to take a few minutes to share with you how the WGA views this franchise agreement negotiation,” he said. “And I want to thank you by acknowledging the unusual difficulty of this situation. The chief difficulty being that no one in this room has any experience with negotiating this agreement. We recognize that our analysis of the problems is something many of you have taken personally, and we genuinely appreciate your willingness to listen and to try to address the issues.”

“There is time to make a deal,” Goodman said, “and we commit, as you have, to making every effort to do so.”

The WGA West president then he went back on the offensive, saying that “We disagree with most of your proposed solutions,” adding that “we are still speaking different languages on the crucial issue of the role of the union in protecting the wellbeing of writers.”

Goodman then compared the ATA to union-busting employers. “It might sound harsh,” he said, “but your proposals remind us of those normally received from anti-union employers, who often attempt to remove the union from the power dynamic while paying homage to individual choice.”

After the bargaining session, an agency source told Deadline: “The WGA presented a counter-proposal that they knew wasn’t acceptable. It almost wasn’t different at all from their original proposals, but they have a new title for it. It’s like putting lipstick on a pig.”

Stuart said afterwards that “Unfortunately, it appears at this time that the WGA really doesn’t want to make a deal. While we appreciate their overtures in tone, they didn’t present any meaningful counter proposals today.” And once again, there was no movement on the key issues.

On March 20, the guild announced that it had made a “significant move” toward a deal by modifying one of its original proposals so that agents could still receive compensation – a type of packaging fee – when they provide financing and sales services for feature films, so long as writers were informed and gave permission. This was significant because the ATA had said that the guild’s original proposal would have devastated independent filmmaking.

The two sides returned to the bargaining table for the sixth time on March 21, with the ATA making more counterproposals aimed at resolving their feud over packaging and agency affiliations. “We had an extensive dialogue with the guild today,” Stuart said after the meeting. “We presented its leadership with our formal counterproposals in a draft agreement, and we hope they will follow up in good faith to move this process forward.”

A spokesman for the guild declined comment, but unlike each of the previous five bargaining sessions, neither side took part in any postmortem rancor.

But last Tuesday’s talks ended on yet another sour note, with the ATA accusing the guild of threatening to throw “our industry into chaos.” Claiming that Young is still stuck in the “threatening stage” of his negotiating strategy, the ATA said that “It is unfortunate that they have not moved past this phase and that they are continuing to keep to their long-term strategy of not having any meaningful negotiations until after the vote.”

“The agencies ignored everything we presented,” the guild countered, “including our offer on independent film packaging, and instead issued an ultimatum – essentially the same ultimatum that they first stated on February 26th – namely that, as a precondition to any further negotiation, we must first compromise on their demand to continue with conflicted practices. That we cannot and will not do.”

Commenting Saturday about the current state of the negotiations, Goodman said at a membership meeting that “The agency arguments about their conflicts of interest are completely unconvincing.”

“And when we have insisted on serious conversation,” he said, “they have resorted to threats and fearmongering. So, although we made a set of proposals a year ago, and though we’ve had negotiations, we have not made significant progress on the key issues. We have two fundamental demands, and the agency response to them is not serious.”

“Like every union struggle,” he said, “this one involves the exercise of collective power, and there is no way around the risk and the uncertainty. Fundamentally, a union is a fighting organization when it needs to be. Historically that is how we’ve made the gains we’ve made.”

And now, with both sides eyeing the margin of the yes and no votes on the guild’s Code of Conduct, the final phase of negotiations is about to begin, with April 6 looming ever larger.